Time Warner and Comcast Merger Essay Example | Topics and Well Written Essays - 1000 words

Time Warner and Comcast Merger - Essay Example This paper highlights that the main impediment of this merger according to the U.S regulators is the fear that the company would create a business that is well aware that clients have no other choices than to the poor provision of customer service as well as increased rates knowing there are no options out there. In any case, this is one of the fundamental concerns with any establishment of a monopoly where the US regulators will carry the ultimate decision.   This research study outlines that the strategy taken is a well conceived strategy which creates a moat or what is known as barriers to entry. The reason for their opinion are based   on barriers to entry which entail competitive advantages such as economies to scale and the net network effects, captivity of customers, proprietary technology as well as government advocacy. This situation is not an accident as some people may explain but a strategic step created to achieve economies of scale and achieve customer captivity. Si nce the merger has the objective of saving on costs for the customers of both firms, this will make the barriers to entry very high.  The situation cannot be termed as being created to destroy value through acquisitions. The value of the companies or competition cannot be destroyed.   If the internet providers were to be left on their own, they would charge high prices given that they experience no oversight or face competition. The merger has the intentions of providing the customers with more efficient services.