Netflix, Inc. (NASDAQ:NFLX) revealed in a press release yesterday that they filed a formal petition with the Federal Communications Commission on August 25 protesting the proposed merger between Time Warner Cable Inc (NYSE:TWC) and Comcast Corporation (NASDAQ:CMCSA), with the latter purchasing the former for $45 billion.
Netflix, Inc. (NASDAQ:NFLX) CEO Reed Hastings has been a vocal critic of the proposed merger since it was announced, and that position in made clear in the 256-page Petition to Deny filed with the FCC. Netflix, Inc. (NASDAQ:NFLX)’s position is that the merger of the two companies would create a monopolistic giant with too much control over the internet.
Netflix, Inc. (NASDAQ:NFLX) already has deals with both Comcast, and more recently, Time Warner Cable, which allow them to have direct access to their bandwidth, resulting in faster streams of Netflix’s video content to their subscribers. Netflix, Inc. (NASDAQ:NFLX) undoubtedly feels these agreements could be jeopardized and that the merged company could exert undue influence over online video streaming companies like theirs, forcing them to pay more to allow their content to be sent across their networks.
Nor is Netflix the only company protesting the proposed merger. DISH Network Corp (NASDAQ:DISH) also filed a similar Petition to Deny on the same day, citing some of the same concerns. For their part, both Time Warner Cable and Comcast believe that because they don’t overlap geographically, that their merger would do little to create a monopoly in any one area, but that they’d simply have a larger company with a wider reach.
It was reported that the FCC was already looking into whether or not Comcast intentionally degrades signals from companies like Netflix, as they consider the merger, which Comcast expects approval of sometime in 2015.
Activist investor Carl Icahn is one of Netflix, Inc. (NASDAQ:NFLX)’s largest shareholders. His hedge fund Icahn Capital Lp has over 1.7 million shares in the video streaming service. Icahn is not a shareholder of Comcast or Time Warner Cable.