Tag: "competition"

Posted November 27, 2012 by christopher

One hundred years after Teddy Roosevelt and AT&T agreed to the Kingsbury Commitment, Harold Feld joins us on Community Broadband Bits podcast to explain what the Kingsbury Commitment was and why it matters. In short, AT&T wants to change the way telecommunications networks are regulated and Harold is one of our best allies on this subject.

AT&T is leaning on the FCC and passing laws in state after state that deregulate telecommunications. Whether we want to deal with it or not, these policies are being discussed and consumer protections thus far have taken a beating. This interview is the first of many that will help us to make sense of how things are changing and what we can do about it.

We also discuss the ways in which the Federal Communications Commission and Federal Trade Commission spurred investment in next-generation networks by blocking the AT&T-T-Mobile Merger on anti-trust grounds.

Harold is senior Vice President of Public Knowledge and writes the Tales of the Sausage Factory blog.

Read the transcript from this episode here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 22 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can download the Mp3 file directly from here.

Find more episodes in our podcast index.

Thanks to mojo monkeys for the music, licensed using Creative Commons.

Posted November 13, 2012 by christopher

For this week's Community Broadband Bits, we venture outside the U.S. to interview Benoit Felten of Diffraction Analysis about the Stokab muni fiber network in Stockholm, Sweden. Stokab appears to be the most successful open access fiber network in the world.

Benoit has just published a case study of Stokab and is an expert on broadband networks around the planet. Our discussion covers how Stokab was built and what lessons it has for other cities. Because Stokab was started so long ago, other local governments will find they cannot simply duplicate it -- times have changed.

Benoit also writes regularly at Fiberevolution and can be found on twitter @fiberguy. Benoit and I last appeared together in a roundtable discussion about bandwidth caps.

Read the transcript from this episode here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 30 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can download the Mp3 file directly from here.

Find more episodes in our podcast index.

Thanks to Fit and the Conniptions for the music, licensed using Creative Commons.

Posted November 8, 2012 by lgonzalez

MI-Connection, the North Carolina community-owned network serving Davidson, Cornelius, and Mooresville, is upgrading network speeds and unveiling a new marketing campaign. MI-Connection was formed when a few towns north of Charlotte purchased the old, dilapidated Adelphia cable network out of bankruptcy and began rehabbing it.

According to David Boraks of the DavidsonNews.net:

The company on Dec. 10 will begin selling a new top speed internet service tentatively called “Warp Speed Broadband,” though the name could change. It will offer 60 mbps downloads and 10 mbps uploads. Customers can get it for $80 to $100, depending on whether they bundle it with TV and telephone.

Existing customers also will get faster speeds Dec. 10, at no extra charge (Download speed x upload speed): 8×4 becomes 10×5, 12×4 becomes 15×5, 16×4 becomes 20×5 and 20×4 becomes 30×10.

Notice that this community network offers faster upstream speeds than most privately owned cable networks -- because they recognize the importance of empowering subscribers rather than hoping they will just consumer video and do little else.

The DavidsonNews.net article also covered MI-Connection's last quarter financial audit report. The network has faced chronic financial problems but things continue to improve. From the article:

The financial report for the quarter that ended Sept. 30 showed that the company grew revenues in all three of its businesses – cable TV, telephone and internet. Altogether, revenues were up 6.5 percent from the first quarter a year ago, to $4,114,992. Expenses fell 8.7 percent, in part because of savings on what the company pays its high-speed internet providers.

The company’s earnings from day-to-day operations continued to grow.

A new marketing plan, dubbed "Straight Talk," will appeal to local ownership and include slogans like "If you owned a grocery store, wouldn't you shop there?" "Can you create jobs just by watching TV?" and "When your boss is everyone in town, your customer service had better be good." It will be interesting to see...

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Posted September 7, 2012 by lgonzalez

Back in 2010, we reported on the merger between Comcast and NBC, which was in the works at the time. One of the issues that came up was how programming is chosen.

At the time, the Tennis Channel had filed a suit against Comcast, alleging that Comcast did not make Tennis Channel programming available to as many subscribers as the Golf Channel and NBC Sports (both belong to Comcast). Comcast, under the Communications Act and Commission rules, is required to place channels owned by others on tiers equal to its own similar types of channels and can't play favorites.

The FCC had reviewed the case at various levels for two years (there was an appeal) and finally, in July of this year, issued a decision in favor of the Tennis Channel. The Tennis Channel alleged discrimination, Comcast argued the Tennis Channel was using the FCC to get out of a contract it wanted to escape. According to a Meg James LA Times article:

The FCC ordered Comcast to provide the Tennis Channel with distribution comparable to the two sports channels, which would effectively increase its coverage by about 18 million homes, and force Comcast to pay Tennis Channel millions of dollars more each year in programming fees.

It was the first time that a major cable operator has been found in violation of federal anti-discrimination program carriage rules that were established in 1993.

Comcast was ordered to remedy the situation within 45 days, a window that would make the Tennis Channel available in more homes during one of the biggest tennis events of the year, the U.S. Open in New York. The channel is currently available in about 34 million homes nationally.

Comcast immediately asked for a stay from the remedy, appealing to the U.S. Court of Appeals for the D.C. Circuit. Comcast was granted the stay while the case is argued on appeal. Once again, Comcast's army of lawyers  are strategically using the court as a way to slow down an adversary's remedy.

We...

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Posted September 5, 2012 by lgonzalez

We have frequently written of Comcast's anti-consumer actions past posts, so we were not surprised to learn that the Department of Justice (DOJ) recently decided to investigate the cable company for antitrust. The borders between antitrust and hyper competitive business practices are grey; Comcast has experimented in the shadows on more than one occasion. We looked into one nine-year-old case, that recently advanced in the Pennsylvania courts.

The Behrend v. Comcast class action case began in 2003 against the cable giant. The suit alleges that Comcast violated the Sherman Antitrust Act by building itself into an “illegal monopoly.” The plaintiffs are current and former customers of Comcast and damages are estimated at $876 million, although the amount could be tripled under the Act.

The plaintiffs claim that Comcast’s strategy was to “cluster” as a way to eliminate competition and be able to raise rates above the market. “Clustering” involved acquiring the cable systems of other large multi-system operators that operated and offered multichannel video programming distributor service in various franchise areas in the Philadelphia area. There are internal documents, referred to in the April 12 Summary Judgment Memorandum [pdf], supporting the argument that Comcast’s business strategy was to eliminate competition through clustering.

Growing by gobbling up smaller entities in the same industry is not a new idea and certainly not illegal on its face. The issues in the 2003 case were how Comcast went about expanding, why they did it, and to what extent they took steps to hinder competition. There was a cable system asset swap with AT&T and the two worked together to divide up the Philadelphia assets of former MediaOne, rather than compete with each other during the bidding process. Other swaps involved Aldelphia, Time Warner, and even smaller operators, like Patriot Media & Communications.

Swapping and clustering with intent to eliminate competition may be considered Sherman Act violations. There were also allegations that Comcast took steps to prevent a...

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Posted August 30, 2012 by lgonzalez

Once again, we are witnessing the federal government allowing a few massive telecommunications companies to collude rather than compete. Verizon is about to ally itself with major cable companies, to the detriment of smaller competitors in both wireless and wireline.

One of the reasons we so strongly support the right of communities to decide locally whether a community network is a smart investment is because the federal government does a terrible job of ensuring communities have fast, affordable, and reliable access to the Internet. By building their own networks, communities can avoid any dependence on the big cable or telephone companies that are more interested in consolidating and boosting shareholder dividends than they are in building the real infrastructure we need.

The Department of Justice released a statement on August 16th, that it will allow the controversial Verizon/SpectrumCo deal to move forward with changes. We have watched this deal, bringing you you detailed review and analysis by experts along with opinions from those affected. One week later, the slightly altered deal was also blessed by the FCC.

Many telecommunications policy and economic experts opposed the deal on the basis that it will further erode the already feeble competition in the market. In addition to a swap of spectrum between Verizon and T-Mobile, the agreement consists of side marketing arrangements wherein Verizon agrees not to impinge in the market now filled with SpectrumCo (Comcast, Time Warner Cable, Cox, and Bright House Communications).

Verizon has been accused of hoarding spectrum it doesn't need. The marketing arrangements constitute anti-competitive tools that the DOJ has decided need some adjusting. From the announcement:

The department said that, if left unaltered, the agreements would have harmed competition by diminishing the companies’ incentive...

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Posted August 23, 2012 by lgonzalez

Just on the heels of Time Warner Cable announcing 81 new jobs in Kansas City in response to the newly competitive environment created by Google's Gig, we learned that Comcast is adding more jobs to its workforce in Chattanooga.

In talking points, the lobbyists and spokespeople for these major carriers often claim that community networks will result in less investment from the existing providers, not more. This is theoretically absurd, as competition drives increased investment. And empirically, we almost always see existing providers invest more as a response to losing their monopoly, not less.

According to Ellis Smith of the Chattanooga Times Free Press, 150 new jobs will be added by the end of the year. Ellis spoke with Jim Weigert, vice president and general manager of Comcast Chattanooga:

"Chattanooga is often at the top, not only in our division but across the country in terms of performance,” Weigert said. “Our strength and record of success made it a contributing factor when they selected a location."

Comcast and others, including AT&T, have had to step up their game in Chattanooga to keep customers who suddenly had a real choice. 

Regardless of whether or not today's Chattanoogans connect to its publicly owned network, they benefit. Consumers get better service, affordable rates, and advanced technology simply because the network has created competition.

Posted August 21, 2012 by lgonzalez

If you are a current or potential Verizon customer, by now you know that you no longer have the option to order stand alone DSL. When the business decision became public knowledge in April, DSL Reports.com looked into the apparent step backward and found existing customers were grandfathered in but:

However, if you disconnect and reconnect, or move to a new address -- you'll have to add voice service. Users are also being told that if they make any changes to their existing DSL service (increase/decrease speed) they'll also be forced to add local phone service. One customer was actually told that he needed to call every six months just to ensure they didn't change his plan and auto-enroll him in voice service.

By alienating customers from DSL, Verizon can begin shifting more customers to its LTE service, which is more expensive. Susie Madrak, from Crooks and Liars, speculated on possible repercussions for rural America:

Rural areas could see the biggest impact from the shift, as Verizon pulls DSL and instead sells those users LTE services with at a high price point ($15 per gigabyte overages). Verizon then hopes to sell those users cap-gobbling video services via their upcoming Redbox streaming video joint venture. Expect there to be plenty of gaps where rural users suddenly lose landline and DSL connectivity but can't get LTE. With Verizon and AT&T having killed off regulatory oversight in most states -- you can expect nothing to be done about it, despite both companies having been given billions in subsidies over the years to get those users online.

The belief is that current DSL customers who don't want (or can't afford) the switch to the LTE service will move to Verizon's cable competition. Normally, losing customers to the competition is to be avoided, but when your new marketing partners ARE the competition, it's no big deal.

Recall that Verizon entered into an agreement with Time Warner Cable, Cox, Bright House (collectively SpectrumCo) to a purchase...

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Posted August 17, 2012 by christopher

A Business Journal story yesterday reveals that Time Warner Cable is adding 81 jobs in Kansas City, an increase of 9% over its present area workforce:

The company, which currently employs about 900 locally, wants to fill customer service, finance, sales and other positions.

These are the jobs that result from competition - which does not exist when the providers a limited to a complacent duopoly comprised of a single cable company and a single telephone company. This is one of the way that community networks create jobs.

Community Networks create traditional jobs to offer their own services (and a multiplier effect by using local accounting, local marketing, and other services). But they also create more revenue for local papers (advertising) and job opportunities with rival companies that suddenly need to fight for subscribers.

On a different track, Light Reading says it has a copy of Google's franchise with the city and notes that Google is under no obligation to serve everyone in the city. However, Karl Bode rightly notes that it was the state legislature in Kansas, flush with AT&T campaign contributions, that revoked the authority of local governments to require cable providers to serve everyone.

Presently, 14 "fiberhoods" in Kansas and 49 in Missouri have met the registration goals and will be among the first served. Google will build to any fiberhood that meets the minimum threshold of interest.

One cannot blame Google then for only building where they will profit. In fact, this is what one would expect any rational profit-maximizing company to do. It is a failure of governance to require that everyone have access to an essential infrastructure. And we know what causes these failures of governance - systematic legalized bribery in our campaign finance system.

Light Reading does note that the franchise is far more generous to Google than overbuilders can typically negotiate. This is a result of Google offering such a unique product. Local leaders decided to effectively subsidize Google's network with favorable terms in the right-of-way, including making inspections as quick and painless as...

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Posted August 8, 2012 by lgonzalez

A major difference between Main Street and Wall Street is that we view Comcast's lack of competition as a major problem. The prospect of Comcast increasing our rates year after year makes us want to scream. Prepare to scream. Or throw things.

The Lafayette Pro-Fiber Blog alerted us to a piercingly honest analysis from Wall Street. The article on SeekingAlpha.com, titled We-re Big Fans Of Comcast's Cash-Flow Generation captures one of the major policy failures of our time:

Comcast's traditional Cable Communications continues to grow and generate copious cash flow. Video revenue, Xfinity and other cable TV products, grew 2.8% to $5 billion, while High-Speed Internet revenue grew 8.9% to $2.4 billion. We're big fans of the firm's Video and High-Speed Internet businesses because both are either monopolies or duopolies in their respective markets. Further, we believe that both services have become so sticky and important to consumers that Comcast will be able to effectively raise prices year after year without seeing too much volume-related weakness.

Wow.

SeekingAlpha.com, describes itself as "…the premier website for actionable stock market opinion and analysis, and vibrant, intelligent finance discussion."

We want to empower local businesses and communities to control their own destiny. Monopolistic telecommunications companies, with their Goliath market share, Wall Street priorities, and armies of lobbyists continue to attack local control and self-reliance. They are extracting assets from Main Street and shipping it to Wall Street.

Yet we see the FCC, Congress, and many states pretending that the public interest is best served by giving more power to these massive companies. And we will continue to hear industry-funded think tanks claiming that broadband has robust competition and should be subject to less public oversight. Coming soon to an op-ed page near you.

Photo courtesy of JSquish via Wikipedia Commons

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