Comcast Will Look for Another Big Deal, but Not Domestic Consumer Access Assets

The Comcast decision to abandon its pursuit of Time Warner Cable might be viewed through the lens of competition policy, industry structure or product lifecycles.

One might speculate about whether the abandoned deal ultimately promotes investment, competition or innovation.

One can debate the impact on industry structure or future strategy choices. Some might see an impact on the linear video product itself.

But the deal actually might have very little impact in any of those domains.

Comcast might have a little less scale, and still lack a footprint in the New York market. But consolidation in the cable industry will continue, and no combination of mergers is likely to change the fact that the owner of Time Warner Cable assets will be the second-biggest operator, as presently is the case.

Comcast would not, in any case, had gained much share in video, though its leadership in the Internet access space would have increased significantly. As with other firms such as AT&T that have had big scale acquisitions blocked, Comcast will look elsewhere for growth.

That might include international, non-access assets or non-fixed access assets.

But the need to transform revenue sources and packaging does not change. Investment might be affected by regulatory uncertainty, but the degree of competition is increasing, so investment as a defensive measure will be necessary.

Nor will the continuing evolution of media be affected. The trend, for decades, has been in the direction of consumers watching “what they want, when they want to and where they want to.”

As AT&T pivoted elsewhere, so will Comcast. There will be consequences for Comcast, Time Warner, Charter Communications and others who would have been affected by a successful acquisition. But the dynamics of the market will not change.

It has been rather clear for some time that Comcast would not be allowed to gain more access market share (a general rule is that no single access provider is allowed to gain more than 30 percent share).

Comcast will look for another big deal. LIke AT&T, that is the way the firm has grown.

One simple observation: it is inconceivable that Comcast does not have a major mobile capability within a decade; likely within five years.