While Comcast’s attempted acquisition of Time Warner Cable may be dead in the water, information revealed during the company’s ugly but often entertaining merger sales pitch may come back to haunt it. When Comcast started selling regulators on the idea of the Time Warner Cable merger, you’ll recall it highlighted repeatedly how Comcast should be trusted because it had done such a bang up job adhering to the conditions placed on its acquisition of NBC Universal. Except when regulators tried to verify this M&A claim (which is already rare enough in telecom), they discovered that not only did Comcast write most of the conditions itself, it still somehow managed to repeatedly fail to adhere to them.
For example Comcast had to be fined $800 million by the FCC for failing to offer and clearly advertise a relatively paltry 5 Mbps, $50 per month broadband tier. Similarly, the company’s Internet Essentials program, which promised 5 Mbps, $10 broadband for low income communities and was a phenomenal PR boon for Comcast — at one point resulted in Philadelphia street protests for being hard to find, qualify, and sign up for. It was also revealed that Comcast ignored conditions intended to keep the company from hamstringing Internet video competitor Hulu, which it acquired as part of the NBC deal.
So yes, Comcast, you’re really great at adhering to merger conditions, just as long as nobody actually bothers to look at how well you adhere to merger conditions. Given how closely the FCC had looked at whether companies adhered to merger conditions in the past (as in: not at all), Comcast’s hubris here was understandable.
The FCC’s net neutrality rules don’t even go into effect until June 12, but they’re already benefiting consumers. You’ll recall that the last year or so has been filled with ugly squabbling over interconnection issues, with Level 3 accusing ISPs like Verizon of letting peering points congest to kill settlement-free peering and drive Netflix toward paying for direct interconnection. But with Level 3 and Cogent hinting they’d be using the FCC’s new complaint process to file grievances about anti-competitive behavior, magically Verizon has now quickly struck deals with Level 3 and Cogent that everybody on board appears to be happy with.
And it’s not just Verizon; Level 3 also quickly managed to strike a new interconnection deal with AT&T, and Cogent CEO Dave Schaeffer recently proclaimed Comcast has also become suddenly more amicable of late, turning on ports for capacity quickly and when needed. Comcast, like AT&T and Verizon, has also suddenly announced a new interconnection deal with Level 3 Comcast says it was “delighted” to sign.
That players in the transit and ISP space are suddenly getting along so wonderfully when ISPs insisted net neutrality rules would result in the destruction of the Internet is nothing short of miraculous. It’s almost as if the FCC’s new net neutrality rules are already benefiting consumers, companies and a healthy internet alike!
The revolving door in Washington, DC, allows lobbyists to become regulators and vice versa, and there may be no better example than the Federal Communications Commission.
FCC Chairman Tom Wheeler (a Democrat) is the former CEO of the cable industry’s top lobbying group, while the current head of the cable lobby—Republican Michael Powell—used to be the FCC chairman. Though they have held the same jobs, Wheeler and Powell are at odds over how to regulate Internet service, with Powell, as CEO of the National Cable & Telecommunications Association (NCTA), leading the charge against his former agency.
More than a decade ago, Powell as FCC chairman ensured that broadband providers would not be regulated as common carriers, a decision that Wheeler essentially reversed this year when the FCC reclassified broadband as common carriage in order to impose net neutrality rules.
Republicans in Congress yesterday unveiled a new plan to fast track repeal of the Federal Communications Commission’s net neutrality rules.
Introduced by Rep. Doug Collins (R-Ga.) and 14 Republican co-sponsors, the “Resolution of Disapproval” would use Congress’ fast track powers under the Congressional Review Act to cancel the FCC’s new rules.
Internet providers are now common carriers, and they’re ready to sue.
Saying the resolution “would require only a simple Senate majority to pass under special procedural rules of the Congressional Review Act,” Collins’ announcement called it “the quickest way to stop heavy-handed agency regulations that would slow Internet speeds, increase consumer prices and hamper infrastructure development, especially in his Northeast Georgia district.”
Republicans can use this method to bypass Democratic opposition in the Senate by requiring just a simple majority rather than 60 votes to overcome a filibuster, but “it would still face an almost certain veto from President Obama,” National Journal wrote. “Other attempts to fast-track repeals of regulations in the past have largely been unsuccessful.”
This isn’t the only Republican effort to overturn the FCC’s net neutrality rules. Another, titled the “Internet Freedom Act,” would wipe out the new net neutrality regime. Other Republican proposals would enforce some form of net neutrality rules while limiting the FCC’s power to regulate broadband.
The FCC’s rules also face lawsuits from industry consortiums that represent broadband providers. USTelecom filed suit yesterday just after the publication of the rules in the Federal Register. Today, the CTIA Wireless Association, National Cable & Telecommunications Association (NCTA), and American Cable Association (ACA) all filed lawsuits to overturn the FCC’s Open Internet Order.
The CTIA and NCTA are the most prominent trade groups representing the cable and wireless industries. The ACA, which represents smaller providers, said it supports net neutrality rules but opposes the FCC’s decision to reclassify broadband as a common carrier service. However, a previous court decision ruled that the FCC could not impose the rules without reclassifying broadband.
Like so many other incumbent ISPs, Time Warner Cable has grown all-too comfortable with the lack of broadband competition it enjoys across most of its territory. Some markets are worse than others, usually not-coincidentally directly tied to the level of regulatory capture in a region. In the Carolinas, the company has worked tirelessly to protect its regional monopoly and duopoly, passing a bill in North Carolina (on the fourth try) preventing towns and cities from improving regional broadband. Company execs have also downplayed the rise of gigabit broadband, proudly informing users they don’t really want faster, cheaper services.
Now Time Warner Cable is facing the worst-case scenario for a government-pampered duopolist. One, the FCC has moved to pre-empt Time Warner Cable’s protectionist law in North Carolina, arguing it hinders the deployment of broadband services in a reasonable and timely basis. Two, Google Fiber recently announced it will be expanding $70, gigabit services (you know, the ones users don’t need or want) into Raleigh, Durham and Charlotte sometime in the next year. The one-two punch of regulators thinking independently and increased competition has to be a nightmarish hellscape for company executives.
Time Warner Cable has of course responded by announcing it is increasing speeds in Charlotte and Raleigh six fold (to 300 Mbps) at no additional charge sometime this summer
During the first round of the FCC’s net neutrality comment period, the agency was absolutely swamped by public input (including ours), the vast majority of it supporting net neutrality. After the agency released a database of the comments, analysis of the comments showed that while around half were generated via “outrage-o-matic” forms from various consumer advocacy groups, once you got into the other half of the comments — almost all were in support of net neutrality. After the volume of pro-neutrality comments received ample media coverage, anti-neutrality organizations — like the Phil Kerpen’s Koch-Funded “American Commitment” — dramaticallyramped up their automated form comment efforts to try and balance the comment scales.
As we noted at the time, Kerpen and American Commitment’s efforts were jam packed with some absurd, alarmist dreck. Similarly, claims that net neutrality opponents then “won” the comment period because they purchased some wingnut e-mail lists to pad the petition were misleading as well. Perusing the FCC comments and analysis of the data, there’s really no way to conclude anything other than the fact the FCC’s efforts have broad, bipartisan public support. Like countless similar groups, American Commitment obscures its funding sources, making its ties to the broadband industry impossible to prove.
That brings us to this week, when American Commitment proudly crowed it had managed to urge 540,538 citizens to send 1,621,614 letters to Congress opposing net neutrality and basically asking for the FCC to be defunded. Except some new analysis of the latest wave of comments suggests there was some serious skulduggery afoot. As in, some of the constituent names used to sign these letters — either don’t exist or never sent letters opposing net neutrality:
“The flood of traffic seemed to raise some lawmakers’ eyebrows, including Democratic Rep. Jackie Speier of California, whose office soon determined some of the messages had come from constituents who didn’t recall sending them. Her aides pointed to a memo sent to members’ staff last week by Lockheed Martin, which manages the technology behind some lawmakers’ “contact me” Web pages. Lockheed initially said it had “some concerns regarding the messages,” including the fact that “a vast majority of the emails do not appear to have a valid in-district address.” In some cases, Lockheed also questioned the “legitimacy of the email address contact associated with the incoming message[s].”
When asked about this, Kerpen suggested that the actions are that of unspecified third party rogue agents, and that his organization knew nothing about the ploy:
“Asked about the matter, Kerpen told POLITICO that American Commitment hadn’t impersonated members’ constituents. But he said that other groups had mounted similar campaigns, and borrowed the pre-written text available on his website. “We’re aware that other groups used identical language in their campaigns and we cannot speak to those efforts,” Kerpen said. “We verified our data through postal address verification and follow up phone calls. We stand by our campaign and Congress should work to stop President [Barack] Obama’s plan to regulate the Internet at the request of these constituents.”
Whoever is to blame (and I’d imagine this entire affair is quickly forgotten in the annals of muddy neutrality lore), it certainly speaks to the quality of your argument when you need to either buy — or just outright fabricate — your support.