NEW YORK (TheStreet) - Netflix (NFLX) continued to criticize Comcast's (CMCSA) proposed $45 billion takeover of Time Warner Cable (TWC), calling the merger anti-competitive in a letter appended to the company's better-than-expected first quarter earnings.
In a manner characteristic of Netflix's iconic character, Frank Underwood of House of Cards fame, CEO Reed Hastings may smell an opportunity in the merger to solve a long-running risk for the steaming video service. Netflix has successfully used Comcast's merger with Time Warner Cable to strike fear in Washington that broadband providers will soon set up a prohibitively expensive toll road between shows such as House of Cards and TV sets across the U.S.
Undue power through mergers and acquisitions or cartel pricing could force Netflix and its streaming video competitors to pay up for their broadband usage, Hastings & Co. have argued. Those costs, of course, would be borne by consumers.
It doesn't appear Netflix is going to back down anytime soon. Ultimately, however, Netflix may see that it currently wields the leverage to solve a standoff between streaming video firms and broadband providers.
After all, Netflix already solved its issues with Comcast through an interconnection agreement. Other than a rejection of the Comcast and Time Warner Cable merger, similar deals may prove its desired outcome.
What Netflix Said
Netflix didn't mince words when addressing the Comcast and Time Warner Cable merger on Monday.
"Comcast is already dominant enough to be able to capture unprecedented fees from transit providers and services such as Netflix. The combined company would possess even more anti-competitive leverage to charge arbitrary interconnection tolls for access to their customers. For this reason, Netflix opposes this merger," Netflix said.