Few expect lower monthly bills

If Comcast Corp. succeeds in acquiring Walt Disney Co., it's going to have a hard time blaming its annual cable TV rate increases on the high cost of programming.

Yesterday's $54.1 billion hostile offer for Disney would give Comcast ownership of ESPN, the most expensive network on cable, as well as the Disney Channel, Toon Disney, SoapNet, ABC Family, and shares in a host of other channels, including A&E, the History Channel, and Lifetime. Comcast already is owner or part owner of the Golf Channel, Outdoor Life, and E! Entertainment.

Comcast trumpeted its proposed acquisition of Disney as the ultimate marriage of media content and distribution, but few analysts seemed to think the merger would lead to lower monthly bills for Comcast's 21 million cable customers, of which 2.2 million are in New England and more than 1.8 million in Massachusetts.

"It's a deal that is clearly beneficial to the two companies. You're marrying distribution with programming and that makes sense for them, but for consumers it doesn't do anything. It's inevitably going to lead to higher rates, not lower rates," said Paul Trane of the Somerville-based Telecommunications Insight Group, which advises local communities on cable matters.

Bruce Leichtman, principal analyst with Leichtman Research Group in Durham, N.H., said customer bills won't change all that much if Comcast buys Disney, except that Comcast won't be able to blame its rate increases on the high cost of ESPN.

"Cable bills will continue to go up, as will satellite bills," Leichtman said. "It's unlikely that they will stop going up by the customary 5 or 6 percent every year."

S.P. Kothari, an accounting professor at the Massachusetts Institute of Technology who specializes in investment analysis, said he didn't think Comcast customers would benefit greatly from the merger. He said ESPN charges high fees for its network now and that won't change if Comcast acquires it.

"Comcast shareholders are going to be just as desirous of collecting that money from consumers as Disney shareholders were," he said.

Officials at the Federal Communications Commission and Comcast said existing FCC rules would require a combined Comcast-Disney company to make all of its cable networks available to other cable operators on a nonexclusive, nondiscriminatory basis. An FCC spokeswoman said the rules are not explicit, but they would appear to bar Comcast from charging itself a low price for ESPN while charging other operators a much higher price.

Comcast officials talked about potential customer service benefits from a merger yesterday, but had little to say about rates. Stephen B. Burke, the president of Comcast Cable, who formerly worked at Disney, stressed the benefits for shareholders from a merger. "I am confident that when we put those great brands and programming assets together with our distribution, there will be significant opportunities to produce compelling returns for shareholders," he said in a statement.

Interestingly, Comcast didn't complain about the high cost of programming when it raised cable rates in November, perhaps because it was already contemplating the purchase of Disney at the time. The company raised the average cost of its standard service package in Massachusetts 6.5 percent in November to $44.07 a month.

By contrast, Cox Communications, the nation's fourth-largest cable company, is engaged in an all-out war with ESPN over programming costs. Cox says ESPN charges it $2.61 per subscriber, more than the combined cost for the seven top ad-supported cable networks, channels such as Nickelodeon, TNT, Lifetime, and Fox News. ESPN regularly asks for a 20 percent increase in its fees each year.

Cox has demanded that ESPN lower its request for a rate increase into the single digits so the cost of Cox's standard cable service could remain affordable. If not, Cox has indicated it would like to shift ESPN and certain other sports channels to a separate digital tier so that those who want them can pay for them.

ESPN has balked at being relegated to a sports tier, arguing that its actual cost to Cox is about $1.50 per subscriber once revenues that Cox makes on the sale of its own advertising on ESPN programs are included. ESPN says cable company complaints about the high cost of programming are a smoke screen to cover up rate increases needed to cover the cost of investments in phone and Internet service.

Bruce Mohl can be reached at mohl@globe.com.