Comcast has made many arguments in support of its proposed acquisition of Time Warner Cable (TWC), but it keeps circling back to one: since the two cable companies don’t compete head-to-head in any city or town, there would be no harm in approving the deal.

But why don’t Comcast and TWC, the two largest cable companies in the US, compete against each other? And if the merger was denied, would they invade each other’s territory? Ars asked Comcast Executive VP David Cohen those questions today on a press call held to discuss Comcast’s latest filing with the FCC.

In short, Cohen said it’s too expensive to compete against other cable companies—even though Comcast is spending $45.2 billion to purchase Time Warner Cable. Comcast and TWC aren’t likely to start competing against each other even if they remain separate, Cohen explained:

A lot of this comes from the history of cable and the extensive capital investment in cable, which is that the cable part of this industry has never competed against each other. We were granted franchises—although they were initially exclusive, they’re not exclusive anymore. But given the expense to build in any particular community, I think no cable company, or only rarely would a cable company choose to compete against another cable company. The [Federal Communications] Commission and Justice Department have addressed this question of what they would call potential competition on multiple occasions before and have concluded on multiple occasions that not only do cable companies like Comcast and Time Warner Cable not compete against each other but that they are also not potential competitors to each other. In the unlikely event that this transaction is not approved, I think it’s very clear we’re not going to overbuild Los Angeles or New York [where Time Warner Cable provides service and Comcast does not].

Comcast also discussed this point in its FCC filing.

“Despite claims by certain commenters, Comcast and TWC have never had plans to expand into each other’s territory and overbuild each other. Indeed, no incumbent cable operator ever has,” Comcast wrote.

While no “incumbents”—companies that were first to a particular market—are likely to compete against other incumbents in other territories, Comcast does face competition from overbuilders. These are generally smaller cable companies that build in Comcast territory and attempt to attract enough customers to make the venture profitable. Comcast also competes against broadband and TV providers who deliver services over copper, fiber, or satellite. One of these, DSL provider CenturyLink, accused Comcast of trying to block it from entering its territory.

Comcast pointed to competition from overbuilders and others as evidence that it faces robust competition. “Although Comcast and TWC do not compete with each other, they both face robust competition in their respective markets from DirecTV and Dish (the nation’s second and third largest [multichannel video programming distributors]), telcos (e.g., AT&T, Verizon, CenturyLink), overbuilders (e.g., RCN, WOW!, and Google Fiber), and, increasingly, online video distributors (e.g., Netflix, Amazon),” Comcast wrote.

Comcast quoted one of its hired experts, economist Mark Israel, as writing that “the relevant potential competitors are fiber-based broadband providers like Google and municipalities, as well as the growth of wireless broadband providers, all of which have established plans to expand into the merging parties’ territories and thus which place actual constraints on the merging parties’ behavior.”

Comcast also said it would not compete against Time Warner Cable in online video distribution (OVD), a market where cable companies are offering streaming video that competes against Internet-based services like Netflix. Instead, the cable companies stick to their own territory.

“Some commenters alternatively claim that the Transaction will eliminate potential competition between Comcast and TWC to offer their own nationwide OVD services that compete with each other,” Comcast wrote. “But the notion that Comcast and TWC might have launched competing nationwide OVD services—or that even one would—is entirely speculative. Significant real-world factors have hindered out-of-footprint OTT [over-the-top] deployment to date, including high subscriber acquisition costs for out-of-footprint customers, and the fact that there already has been significant entry into the OVD market by national brands (e.g., Netflix, Amazon, Apple, Hulu, and Google).”

Cable companies have examined the possibility of launching online video products outside their cable territories "but have not been able to find a viable business model, in part driven by the difficulty of obtaining national programming rights," Cohen said.

Onerous conditions could make Comcast walk away from the deal

Cohen was asked whether Comcast would walk away from the Time Warner Cable merger if regulators impose onerous conditions upon it. The answer is that Comcast would drop the deal in such a circumstance, but the company doesn't think it is likely.

"It is certainly possible that the agencies could pile on enough conditions that we would walk away from the deal, but I have no evidence, no instinct, no message that we are remotely in that situation," Cohen said.

Cohen said he experienced "more uncertainty" about regulatory conditions for Comcast's previous purchase of NBCUniversal. In this case, "this is not a transaction that I think you’re going to see accompanied by burdensome conditions," he said.

Comcast's filing accused programmers who oppose the merger of "extortion." Programmers have argued that a larger Comcast will have greater power to demand discounts.

"Discovery, like many other programmers, is improperly using this proceeding to promote its own financial interests. In fact, Discovery demanded unwarranted business concessions from Comcast as a condition of Discovery’s non-opposition to the Transaction. Such extortionate demands are patently improper," Comcast wrote.

If Comcast met all the programmers' demands, it "would cost Comcast upwards of $5 billion above any reasonable projection of its programming costs over the next few years—and could result in per-customer rate increases above $4 per month," the company wrote.

Discovery issued a statement in response, saying, "it is very unfortunate that Comcast is trying to divert attention away from the real issue. Comcast chooses to not talk about the substantial program discounts they currently get, or what they would do post-merger to demand extreme discounts from cable programmers or block the launch of new networks and brands."

One reporter asked Cohen, "are you actually accusing them of criminal acts? Extortion is quite a serious word to throw around, especially in a filing to the FCC."

Cohen responded, "We are absolutely not accusing anyone of criminal activity in connection with the transaction. You’re right that extortion can be a crime, but extortion can also be an attempt to leverage a transaction for individual business interests, and that’s the kind of extortion I’m referring to."

There's nothing illegal about taking advantage of the merger to get a better deal, Cohen continued, but he said the business negotiations with Discovery and other companies are not relevant to the FCC's review of whether the merger is in the public's interest.

"The only thing that’s wrong with it is to cloak the claim in some theory that you’re trying to promote the public interest and trying to do something good for consumers," he said. "That’s just demonstrably not the case."