Comcast and NBCUniversal announced a merger on Wednesday that will likely be seen by most as a net positive for consumers.
The deal would give Comcast a 21% stake in NBCUniversal and 21% in Comcast, the two largest cable companies in the United States, to help pay for TV and other infrastructure upgrades.
But the deal is likely to make it difficult for Comcast and the other two major cable companies to compete for consumers who have historically relied on cable for their TV service.
Comcast has been a net loser on television, where the cable network has suffered from overcapacity, slow speeds and low pay-TV rates.
Its net loss from Comcast has been $4.9 billion for the past 12 months, compared with a net loss of $2.8 billion for NBCUniversal.
But NBCUniversal has said it would invest in its networks and invest in content to compete against Comcast.
This deal could help Comcast’s ability to pay for infrastructure upgrades, but it could also make it more difficult for NBCU and Comcast to compete on TV.
The deal is good news for Comcast but bad news for the rest of the cable industry, which relies on TV as the dominant way to deliver broadband and other services.
“The merger is good for consumers and for the industry as a whole, but Comcast will benefit from it and the impact on competition and innovation will be significant,” said Michael Powell, president of the American Cable Association, a trade group for cable operators.
“This deal is bad news, because it would create a concentration of power in the hands of the largest companies.”
“I think the deal would be a net benefit to Comcast and would give it a better position to compete,” said Sam Pomerantz, president and CEO of Cablevision Systems.
“However, it’s going to hurt consumers, because we’re going to see fewer choices and fewer choices of what you can get from a single provider.”
Compton’s merger with NBCU would give the company a 21.5% stake, or about $6 billion, in NBCU, according to Comcast’s website.
NBCU already owns an additional 1.9% stake.
The merger will also give Comcast about $7 billion to buy up other assets and buy back Comcast stock, according the company.
NBCU’s acquisition of Comcast would give NBCU more money to invest in programming, especially new series, including The Newsroom, which is expected to be a hit with young adults.
On Thursday, the companies said the merger would not create any new jobs or raise the wages of workers.
But it would allow Comcast to cut costs and raise its prices for broadband, cable TV, phone and other devices, including the new PlayStation.
But many analysts say the deal will create significant competition for consumers because the new companies will be able to offer cheaper services and more advanced technology, especially if they are able to acquire rival cable companies.
Analysts at Morgan Stanley said that while Comcast will have a more powerful position in the cable market, the company may be forced to take tougher decisions about what it delivers to customers.
It will also create a lot of uncertainty for consumers, which could hurt them in the long run, said Jim Cramer, an analyst with the online investment firm Institutional Shareholder Services.
In its announcement of the merger, Comcast said the new company would bring to the cable marketplace “the next generation of the world’s most advanced and most advanced video and broadband services.”
“As a result, we expect to deliver competitive services to our customers across a range of markets and services,” the company said.
Critics of the deal say it will give Comcast too much control over the market and will increase the concentration of market power in its hands.
A Comcast spokesperson said in a statement that the deal does not “create a new competitor for Comcast,” but will help to protect the company from the competition it faces.
Earlier this week, the Federal Communications Commission said it was considering allowing Comcast to sell its TV services and to buy and sell its broadband.