Tag: "comcast"

Posted April 3, 2014 by lgonzalez

The proposed Comcast/Time Warner Cable deal will be on everyone's mind for many months to come. Thanks to Harold Feld, it is now possible to follow the process as it moves forward. Feld began a series of posts earlier this month that map out the review as it moves from the Department of Justice Antitrust Division to the Federal Communications, and finally to Congress. As Feld notes, the entire process will last six months at least and could run for more than a year. 

In addition to drawing a process map, Feld provides insightful subtleties on the purpose behind each step in the review. He also offers political analysis that may influence the outcome. Feld gets into the unique review process, burdens of proof, and relevant definitions at each stop along the way. Highly recommended, especially for law students.

Part I - Introduction

Part II - Antitrust Review at the DOJ

Part III - Federal Communications Commission analyzes public interest

Part IV - The proposal moves through the committee process and the public has a chance to express themselves to their elected officials (including lobbyists)

 

Posted March 13, 2014 by lgonzalez

Community leaders in Lexington are the latest to stand at a fork in the broadband road. In September, the franchise agreement between the Lexington-Fayette Urban County Government (LFUCG) and Time Warner Cable expired, resulting in a month-to-month agreement continuation. As they negotiate a new contract, local citizens have called for consideration of a municipal network.

When the contract was originally negotiated in the 1990s, the community was primarily interested in cable TV servce. As broadband has become critical infrastructure for residents, businesses, and government, the community's focus shifted. Lexington customers have complained repeatedly about Internet and cable TV service from Time Warner Cable. A February Kentucky.com article noted that local consumers complained over 300 times to Lexington's Urban County Government, the entity responsible for contract negotiations. According to the article:

The biggest single category of complaints was about price and the volatility of monthly rates. Other complaints were that the cable TV service "repeatedly fails, resets or freezes"; that there was an extended wait time and/or "unhelpful responses" in customer service; and that email and Internet "had declined in service" and showed "significantly slower service."

The City Council considered the situation bad enough to debate whether or not to appoint an ombudsman to advocate for Lexington consumers.

The community wonders how the proposed merger between Time Warner Cable and Comcast will impact their current service. While the Vice Mayor seems to think it is an "almost golden opportunity" to deal with a different provider, local citizen Roy M. Cornett has a different perspective. He wrote for Business Lexington.com:

We can choose to maintain the status quo and allow out-of-state corporations to continue to control our access to the Internet, or we can rescind the franchise agreements to the copper and fiber lying in the ground around our community and treat the Internet as the piece of infrastructure essential for our future economic growth that...

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Posted March 10, 2014 by lgonzalez

The possible merger between Comcast and Time Warner Cable and the FCC's recent announcement to review state barriers have created a significant buzz in the world of telecommunications. Two recent NPR interviews with Susan Crawford and Jim Baller provide insight into how the merger may affect consumers and why a new light is shining on municipal networks.

Crawford spoke with Brooke Gladstone for a recent interview for On the Media. The two addressed some of the consequences of the potential merger. Crawford also discussed the option of municipal broadband investment is an alternative gaining traction. As our readers know, Crawford authored Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age. Crawford joined us in a past episode of the Communiy Broadband Bits podcast.

Jim Baller, President of the Baller Herbst Law Group, also joined On the Media when he spoke with Bob Garfield. Baller and Garfield talked about the cable and telecom lobby's efforts to block municipal authority to build networks. Baller supplied a few of the many examples of successful communities that have blossomed as a result of their investment. We have interviewed Baller three times for our podcast.

 

Each interview is a little over six minutes.

Posted March 2, 2014 by christopher

We should probably be thanking Comcast for its attempt to take over Time Warner Cable. It has inspired a shocking amount of vitriol against the cable monopolies, including an entertaining but NSFW video with strong language from Funny or Die.

Whereas people were largely content to mostly silently hate Comcast and Time Warner Cable separately, the idea of them officially tying the knot to screw consumers even more has apparently hit a tipping point. As I noted a few days ago, we are seeing a more communities considering their own networks to avoid being stuck with a Wall Street monopoly forever.

Paul Krugman was inspired to write "Barons of Broadband," which accurately reflects the modern dynamic:

The point is that Comcast perfectly fits the old notion of monopolists as robber barons, so-called by analogy with medieval warlords who perched in their castles overlooking the Rhine, extracting tolls from all who passed. The Time Warner deal would in effect let Comcast strengthen its fortifications, which has to be a bad idea.

Krugman talks about monopoly as well, reminding me of one of our most important podcasts - Barry Lynn, Monopoly Expert.

And the same phenomenon may be playing an important role in holding back the economy as a whole. One puzzle about recent U.S. experience has been the disconnect between profits and investment. Profits are at a record high as a share of G.D.P., yet corporations aren’t reinvesting their returns in their businesses. Instead, they’re buying back shares, or accumulating huge piles of cash. This is exactly what you’d expect to see if a lot of those record profits represent monopoly rents.

It’s time, in other words, to go back to worrying about monopoly power, which we should have been doing all along. And the first step on the road back from our grand detour on this issue is obvious: Say no to Comcast.

There is no public benefit to this merger - none. Meanwhile it will give even more power to a corporation already slowing our economy by refusing to invest in...

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Posted February 13, 2014 by christopher

It is hard to say just how bad of an idea it is for us to allow Comcast to buy Time Warner Cable. This is not just about consumers having to pay more, which they do every time we allow massive consolidation, but about access to information.

I can't help but think back to our conversation with Barry Lynn on monopoly a few weeks ago. People get so focused on consumer prices and a narrow view of competition that they miss important impacts of consolidation.

One impact is moving Comcast from the seventh biggest DC lobbyist to the fourth.

This consolidation is a recognition that the private sector simply will not provide meaningful competition for Internet access. Communities need to recognize what a do-nothing approach means: relying on a distant cable monopoly for the most important services of the 21st century.

If I had to guess what will happen - Comcast will buy Time Warner Cable but have to sell off some pieces to get approval. Comcast will grow larger and more powerful, making future mergers even more difficult to stop despite more and more evidence that these firms are strangling our economy. We can stop it - but will we? Specifically, will we force our representatives in DC to stop it?

Stay tuned to the organizations that are covering it well - Free Press, Karl Bode, Public Knowledge, Common Cause, and many others.

Posted January 21, 2014 by christopher

About six months ago, I was quite bullish on advances in over-the-top (OTT) video making it easier for communities to build fiber networks because they would no longer have to deal with the challenges of securing and delivering traditional cable television channels. I explored these challenges in a recent post.

OTT video includes Hulu, Netflix, Apple TV, and similar services that deliver video content over your broadband connection, ideally to your television. Last summer, we were anticipating more devices and services that would expand OTT options.

In the time since, I have been disappointed. There have been advances - the Google Chromecast dongle works well (if you have a good Wi-Fi signal near your TV - no ethernet option unfortunately). But Chromecast works with a limited suite of video services.

Hulu works well enough, but seems to have fewer shows that I want to watch available on Hulu plus. Also, Comcast owns it and won't always be shackled by the temporary conditions it agreed to in order to secure permission to buy NBC Universal.

Aereo continues to be a very interesting model but will be fighting in the courts for awhile yet, creating an air of uncertainty over its future. Additionally, its business model hurts public access media (locally produced content), which often depends on franchise fees that Aereo and broadband providers don't have to pay. On the other hand, Aereo solves the problem of getting sports programming over the top and that is a big deal.

We had high hopes for an announcement from Intel that it would begin marketing a service offering television channels over the top but it ran into the steep barriers to entry we have previously noted. Now the Intel effort is dead to us: Verizon has purchased it.

Maybe Sony or Samsung or some other manufacturer will suddenly come out with a breakthrough, but given my experience with their user interfaces, I would be shocked if it were usable, to say nothing of...

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Posted January 14, 2014 by christopher

In a decision announced a few hours ago, the DC Circuit of Appeals has largely ruled against the Open Internet, or network neutrality. These are rules established by the Federal Communications Commission to prevent massive ISPs like Comcast and AT&T from degrading or blocking access to certain sites on the Internet. Decision here [pdf].

The goal is to prevent these big firms from being able to discriminate - to pick winners and losers. For instance, Comcast could charge subscribers an extra $10 per month to access Netflix while not charging to visit similar sites that it owns. The rules were intended to prevent that.

However, the FCC has a history of decisions that have benefited big telecom corporations more than citizens and local businesses. Those decisions limited how it can protect the public interest on matters of Internet access.

This court decision decided that the way the FCC was attempting to enforce network neutrality was not allowed because of how it has decided to (de)regulate the Internet generally. In essence, the FCC said that it didn't want to regulate the Internet except for the ways it wanted to regulate the Internet. And the Court said, somewhat predictably, that approach was too arbitrary. Moving forward, the FCC has the power to enforce this regulation, but it will have to change the way the Internet is "classified," in FCC lingo - which means changing those historic decisions that benefited the big corporations.

Groups like Free Press are pushing to make this change because it will ensure the FCC has the authority it needs to ensure everyone has access to the open Internet.

The lesson for us is that communities cannot trust Washington, DC, to ensure that residents and local businesses have universal, fast, affordable, and reliable access to the Internet. Communities should be investing in themselves to build networks that are accountable to the public and will not engage in anti-consumer practices merely to maximize their profits. Such behavior is inappropriate on matters of essential infrastructure.

Even if the FCC now gets this right and protects the public interest, that may last only as long as this FCC is in power. Communities that trust the FCC to protect them in this...

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Posted January 9, 2014 by christopher

This the second in a series of posts exploring lessons learned from the Seattle Gigabit Squared project, which now appears unlikely to be built. The first post is available here and focuses on the benefits massive cable companies already have as well as the limits of conduit and fiber in spurring new competition.

This post focuses on business challenges an entity like Gigabit Squared would face in building the network it envisioned. I am not representing that this is what Gigabit Squared faced but these issues arise with any new provider in that circumstance. I aim to explain why the private sector has not and generally will not provide competition to companies Comcast and Time Warner Cable.

Gigabit Squared planned to deliver voice, television, and Internet access to subscribers. Voice can be a bit of hassle due to the many regulatory requirements and Internet access is comparatively simple. But television, that is a headache. I've been told by some munis that 90% of the problems and difficulties they experience is with television services.

Before you can deliver ESPN, the Family Channel, or Comedy Central, you have to come to agreement with big channel owners like Disney, Viacom, and others. Even massive companies like Comcast have to pay the channel owners more each year despite its over 10 million subscribers, so you can imagine how difficult it can be for a small firm to negotiate these contracts. Some channel owners may only negotiate with a provider after it has a few thousand subscribers - but getting a few thousand subscribers without good content is a challenge.

Many small firms (including most munis) join a buyer cooperative called the National Cable Television Cooperative (NCTC) that has many of the contracts available. But even with that substantial help, building a channel lineup is incredibly difficult and the new competitor will almost certainly be paying more for the same channels as a competitor like Comcast or Time Warner Cable. And some munis, like Lafayette, faced steep barriers in just joining the coop.

FCC Logo

(An...

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Posted January 6, 2014 by christopher

A few weeks ago, a Geekwire interview with outgoing Seattle Mayor Mike McGinn announced that the Gigabit Squared project there was in jeopardy. Gigabit Squared has had difficulty raising all the necessary capital for its project, building Fiber-to-the-Home to several neighborhoods in part by using City owned fiber to reduce the cost of building its trunk lines.

There are a number of important lessons, none of them new, that we should take away from this disappointing news. This is the first of a series of posts on the subject.

But first, some facts. Gigabit Squared is continuing to work on projects in Chicago and Gainsville, Florida. There has been a shake-up at the company among founders and it is not clear what it will do next. Gigabit Squared was not the only vendor responding to Seattle's RFP, just the highest profile one.

Gigabit Squared hoped to raise some $20 million for its Seattle project (for which the website is still live). The original announcement suggested twelve neighborhoods with at least 50,000 households and businesses would be connected. The project is not officially dead, but few have high hopes for it given the change in mayor and many challenges thus far.

The first lesson to draw from this is what we say repeatedly: the broadband market is seriously broken and there is no panacea to fix it. The big cable firms, while beating up on DSL, refuse to compete with each other. They are protected by a moat made up of advantages over potential competitors that includes vast economies of scale allowing them to pay less for advertising, content, and equipment; large existing networks already amortized; vast capacity for predatory pricing by cross-subsidizing from non-competitive areas; and much more.

So if you are an investor with $20 million in cash lying around, why would you ever want to bet against Comcast - especially by investing in an unknown entity that cannot withstand a multi-year price war? You wouldn't and they generally don't. The private sector invests for a return and overbuilding Comcast with fiber almost...

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Posted December 26, 2013 by christopher

The show was published over a year ago, but it holds up as a good explanation for both network neutrality and the danger of Comcast and other massive cable companies becoming too powerful. The popular podcast 99% Invisible interviewed Susan Crawford on the subject last November.

It is worth listening to and keeping as a reference for those who do not understand the threat. That said, I think the show oversimplifies the dynamic of high speed access -- the big phone companies are not totally irrelevant, just mostly irrelevant when it comes to delivering faster, more reliable services. And this is not technological determinism so much as poor management choices and the pressure Wall Street puts on firms to harvest profits rather than investing for the future.

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