December 8th Update: WOW! The latest campaign report discloses that Priorities First spent a total of $901,000 during this campaign. Congrats on overcoming that Goliath, Fort Collins!
Fort Collins Update: On November 3rd, Comcast's front group Priorities First filed their most recent campaign report. The report showed that the group spent and additional $256,326 on the Fort Collins campaign between October 23rd and November 1st. This brings big incumbent spending to stop compeition to almost half a million dollars.
As the company with one of the largest ISPs in the nation, Comcast Corporation makes daily investment decisions. They choose to put company funds into a variety of ventures, from theme parks to hair color; all that matters is that the investment pays off. This election season, Comcast is once again devoting funds to an investment it considers necessary - influencing elections in Seattle and Fort Collins, Colorado. We've prepared a policy brief to look deeper into Comcast's investment into the elections.
Download the brief here: Comcast Spends Big on Local Elections: Would Lose Millions in Revenue from Real Broadband Competition.
We’ve written about lobbying dollars from big national incumbents so many times we can do it in our sleep. Comcast doesn’t want competition from any other provider. We know that subscribers complain year after year in surveys about the ISP and each year Comcast makes it at or near the top of the list of most hated companies. It’s reasonable to expect residents and businesses to switch to some other ISP if given the opportunity. If the new entrant happens to be managed by a utility they know and trust, the chances of them switching are even greater.
How many subscribers could Comcast lose in Seattle or Fort Collins? What sort of revenue would they lose if faced with competition from a municipal Internet network? We made some conservative projections and discovered that their contributions to local political races were small compared to potential losses they face if the results don’t go their way.
In Seattle, Comcast and CenturyLink have donated $50,000 to a political action committee that supports a candidate opposed to publicly owned Internet infrastructure. This is only the latest attempt of the two national ISPs to influence the city’s mayoral elections; in 2013, they contributed similarly to Ed Murray, who went on to win the election. Murray was also opposed to the publicly owned option.
In our analysis, we’ve run a range of possible scenarios and offered both a conservative Comcast loss estimate and figures based on higher loss of subscribership. For example, if 20 percent of the city’s 138,000 current Comcast Internet access subscribers choose to switch to some other ISP, the company could lose $1.38 million per month based on monthly rates of $50 per month.
This is just one example of the losses that we calculated. We've also accounted for rate adjustments due to the effects of competition and considered the losses Comcast would face when subscribers abandoned video services. Check out the policy brief for more results and details on our methodology.
While the election in Seattle is to fill a position of power, the Fort Collins, Colorado, vote has a more direct impact on Comcast’s potential position in the community. Voters in the north central town of about 59,000 households will decide whether or not to change the city charter to allow the municipal utility to offer broadband service. The community has unsuccessfully searched for a private sector partner to improve connectivity via Fiber-to-the-Home (FTTH) in order to establish themselves as a competitive city with high-quality Internet access. City leaders feel economic development, education, and the city’s future depend on the fiber that Comcast can’t or won't supply.
In order to fight off measure 2B, which if passed would amend the city charter, Comcast and the political action committee that the company contributes handsomely to have already shoveled more than $200,000 into the Fort Collins race. All of their money was invested into an intense misinformation campaign.
Using a similar approach that we used in Seattle, we calculated a loss of $373,000 per month to Comcast if 20 percent of their Fort Collins subscribers decided to abandon the company. We applied a similar methodology as in the case of Seattle and discovered that Comcast's investment in Fort Collins is small compared to what they have to lose.
Download the policy brief for more estimates on Comcast revenue loss in Fort Collins.
A Great Investment For Big Cable
We won’t know the results of Comcast’s investments until after November 7th. The company’s revenue in 2016 was more than $80 billion and their investments in Seattle and Fort Collins barely move the scale. If we look beyond this one election, however, we see the logic in Comcast's investment. From our policy brief conclusion:
Spending a few hundreds of thousands of dollars once or twice to stop a referendum is a smart investment to stop competition that would cost millions of dollars in lost revenue year after year.
Read more about the elections in Seattle and Fort Collins, what's at stake for Comcast, and our analysis by downloading the policy brief, Comcast Spends Big on Local Elections: Would Lose Millions in Revenue From Real Broadband Competition.
Image of the Comcast Center by Mredden in the public domain and available on Wikimedia.