And while this is generally an idea that would benefit all broadband providers, it would benefit new providers like Google Fiber the most. That’s why companies like AT&T, Comcast and Time Warner Cable have been blocking this pole-attachment reform, in some cases trying to claim such policies violate their Constitutional rights. The ISPs figure that if they can’t block Google Fiber from coming to town, their lawyers can at least slow Google Fiber’s progress while they try to lock customers down in long-term contracts.
But our merger with DirecTV was totally fine, AT&T says.
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.
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
Comcast has consistently crowed about the volume of individuals and organizations that support the company’s $45 billion merger with Time Warner Cable. Of course the company has just as consistently failed to mention how much of this “support” is from people paid to regurgitate pretty much any Comcast dreck-filled missive that comes stumbling down the road. Want funding for a new events center or a “closing the digital divide” photo op? Just leave independent thought at the door and send lawmakers a pre-written form letter with your name or organization’s logo on it.
It doesn’t take much sleuthing to uncover the money trail, because Comcast (and the politicians and groups beholden to it) usually (with some think tank exceptions) don’t bother hiding it. They just outright deny that the money impacts policy positions whatsoever. For example, take reports this week that clearly highlight how Comcast can effectively buy a media sound wall of merger support, then pretend there’s nothing untoward about an army of “consultants,” minority groups, and fauxcademics all paid to effectively be glorified parrots:
“Increased Concentration Does Not Equal Anticompetitive Effect,” Mr. Manne wrote last August, summarizing his submission. He separately wrote pieces in Wired magazine, extolling the virtues of the deal, and through a separate advocacy organization he helps run, called TechFreedom, wrote a blog post that appeared the same day that the deal was announced early last year. Each time, he praised the transaction. But nowhere in these statements does Mr. Manne directly disclose that Comcast is among a small group of donors that finances his nonprofit group, a fact that Mr. Manne confirmed in response to a question late last week. “We are no value to our donors or ourselves unless we maintain our independence and academic rigor,” he said, before adding that “maybe there is some subconscious thing there.”
Yes, surely Comcast’s cash comes associated not with an expectation that you’ll give automated and artificial justification to what’s frequently very anti-consumer and anti-competitive policies, but that you’ll exercise your “independence and academic rigor” and tell Comcast to piss off when you’re approached to help “correct perceptions” about the latest Comcast PR campaign. You see there’s nothing untoward going on here — because we say there’s nothing untoward going on here. We’re all just healthy American patriots busy expressing our First Amendment rights, after all.
That logic was mirrored by Comcast’s top lobbyist David Cohen — who calls himself the company’s “Chief Diversity Officer” to help skirt lobbying rules (I bring that up every time I write about Cohen because to me it just never gets old). Cohen says he’s “offended” by the very idea that Comcast has to pay for its policy support:
“He did not dispute that many of the voices supporting the deal received donations from Comcast. But he said he was offended by the suggestion that their endorsements had been made in return for the financial help. “We have never provided financial support to an organization in exchange for support in a transaction,” he said. “Our support is based on the quality of the work they do in the community.”
Now I’m sure that somewhere there exists a person that actually believes that, but I’d recommend not putting them in charge of your finances (or even lawn care). In Mr. Cohen’s head, this is just another conspiracy contributing to the unfair overall “atmospherics” of anti-Comcast sentiment:
“The atmospherics around our customer service clearly stir some antipathy among some consumers,” Mr. Cohen said. “And it does provide a basis for opponents of the transaction to gin up three-sentence, nonsubstantive communications to the F.C.C. saying that they don’t like Comcast or they don’t like Time Warner Cable.”
That’s a company with arguably the worst customer satisfaction ratings in any industry — one that manufactures support for bad policies out of thin air — trying to claim its horrible reputation is somehow manufactured. It’s still not clear if regulators plan to deny the merger (or approve it with something vaguely-resembling meaningful conditions), but whatever happens it will spell the end of some fantastic entertainment that easily tops anything in Comcast’s channel lineup.
I think DoomHamster sums it up nicely:
So is merging with TWC the only way they can enter that market? And if TWC is already in that market, how would Comcast merging with them increase the competition?
Seems to me that the better option for increasing competition would be for Comcast to enter the market along side TWC and all the other that are there.
What am I missing?
From Ars Technica:
When Comcast announced its proposed acquisition of Time Warner Cable, Executive VP David Cohen bluntly said that Comcast is “not promising that customer bills are going to go down or even increase less rapidly.”
But while residential customers shouldn’t expect any financial relief from the nation’s largest cable company, Comcast now says the merger will create new competition in the business market, lowering prices, especially for large, multi-city businesses. In areas including San Francisco, Seattle, Chicago, Houston, Miami, Boston, and Philadelphia, “we expect to generate almost $8 billion in price reductions due to our competitive entry in the enterprise business segment through the TWC transaction,” Comcast Business President Bill Stemper wrote in a blog post yesterday.
Comcast provided some details on how it calculated the expected price reductions in a filing last month with the Federal Communications Commission, though the numbers in that document are redacted. Comcast calculated cost savings over a 10-year period for enterprise customers, meaning multi-location businesses with at least 500 employees, the filing said. There will be “various cost savings and other benefits” for small businesses too, the filing said.
Poor Comcast. Despite throwing millions of dollars at think tanks, consultants, PR reps, editorial writers, various front groups and a myriad of other policy tendrils, genuine, meaningful support for the company’s $45 billion Time Warner Cable acquisition is still apparently hard to come by. You might recall that last year top Comcast lobbyist “Chief Diversity Officer” David Cohen proudly crowed that support for the company’s merger was “pouring in” — though he failed to mention that Comcast was paying people for that support, and that said support largely consisted of regurgitated form letters.
Despite the money spent however, it appears that actual support in Congress for the deal is tepid to non-existent. Comcast’s hometown paper the Philadelphia Inquirer points out that whereas the NBC deal saw major support efforts by members of Congress, politicians appear to want nothing to do with this latest merger attempt
About a year ago we noted how Comcast has a weird tendency to prevent its broadband users from being able to use HBO Go on some fairly standard technology, including incredibly common Roku hardware. For several years Roku users couldn’t use HBO Go if they had a Comcast connection, and for just as long Comcast refused to explain why. Every other broadband provider had no problem ensuring the back-end authentication (needed to confirm you have a traditional cable connection) worked, but not Comcast. When pressed, Comcast would only offer a generic statement saying yeah, it would try and get right on that:
“With every new website, device or player we authenticate, we need to work through technical integration and customer service which takes time and resources. Moving forward, we will continue to prioritize as we partner with various players.”
And the problem wasn’t just with Roku. When HBO Go on the Playstation 3 was released, it worked with every other TV-Everywhere compatible provider, but not Comcast. When customers complained in the Comcast forums, they were greeted with total silence. When customers called in to try and figure out why HBO Go wouldn’t work, they received a rotating crop of weird half answers or outright incorrect statements (it should arrive in 48 hours, don’t worry!).
Fast forward nearly a year since the HBO Go Playstation 3 launch, and Sony has now announced an HBO Go app for the Playstation 4 console. And guess what — when you go toactivate the app you’ll find it works with every major broadband ISP — except Comcast. Why? Comcast appears to have backed away from claims that the delay is due to technical or customer support issues, and is now telling forum visitors the hangup is related to an ambiguous business impasse:
“HBO Go availability on PS3 (and some other devices) are business decisions and deal with business terms that have not yet been agreed to between the parties. Thanks for your continued patience.”
Since every other ISP (including AT&T, Verizon, and Time Warner Cable) didn’t have a problem supporting the app, you have to assume Comcast specifically isn’t getting something from Sony or HBO it would like (read: enough money to make them feel comfortable about potentially cannibalizing traditional TV/HBO viewers). It’s a good example of how crafting net neutrality rules is only part of the conversation. It’s great to have rules, but they don’t mean much if bad or outright anti-competitive behavior can just be hidden behind half-answers and faux-technical nonsense for years on end without repercussion.