Tag: "consolidation"

Posted November 10, 2013 by Lisa Gonzalez

When we think of the enormous cyclops we don't usually imagine him in a suit and tie but the Free Press does and it works. In their recent Media Giants infographic, the Free Press uses the hulking one-eyed beast to represent corporate behemoths slowly taking control of our media through smaller shell companies.

As media power is consolidated, every one else's voices fade. We all become like the one-eyed cyclops: seeing things through his limited vision. The Free Press sums it up like this:

Media companies are using shady tactics to dodge the Federal Communications Commission’s ownership rules and snap up local TV stations across the U.S.

Gannett, Nexstar, Sinclair and Tribune are on major buying sprees. To grow their empires, these corporations are using shell companies to evade federal caps on how many stations one company can own. And so far the FCC has done nothing to stop this trend.

In some communities, one company owns two, three and even four local TV stations — and airs the same news programming on all of these outlets. The result: An echo chamber where all the news looks and sounds the same.

Take action now through the Free Press' campaign or contact your elected officials directly.

Posted December 7, 2012 by Lisa Gonzalez

AT&T and others regularly woo their regulators and policymakers with promises to built increase investments or expand networks in return for deregulation or merger approval. A recent Gerry Smith Huffington Post article examines a familiar pattern of broken promises made by telcos, what has developed into a chronic wham-bam-thank-you-ma'am attitude by these massive corporations.

We actually have a name for this, Kushnick's Law: "A regulated company will always renege on promises to provide public benefits tomorrow in exchange for regulatory and financial benefits today." 

Smith revisits promises made back in 2006 when AT&T merged with BellSouth. AT&T promised to roll out broadband to every customer in its territory by 2007. Tell that to Cedric Wiggins from rural Mississippi. From the article:

But five years after that deadline, Wiggins, 26, is still waiting. Inside his trailer, his only affordable Internet option is a sluggish dial-up modem that takes five minutes to load the online job listing sites he has visited since being laid-off as a truck driver in May. Every few months, he calls AT&T to ask when he will receive a faster connection. The answer never changes.

“They said they don’t offer it in my area right now,” he said. “There’s nothing I can do.”

Smith found that promises made to gain merger approval are traditionally broken and/or so weakly constructed that the players can comply with little or no effort. Empty promises continue to be accepted by the feds and conveniently forgotten, except people like Wiggins.

No one knows the pattern better than those on the inside:

“We have a problem at the commission, historically, with following-up on merger conditions,” said Michael Copps, who served on the FCC from 2001 to 2011, and who voted to approve the AT&T-BellSouth merger. “A lot of these conditions that get attached are not that great, and they are not always really enforced.”

AT&T tells Smith it kept its promise, but would not respond when pressed for details about where it had expanded. Self reporting is accepted from the FCC on merger conditions, putting the burden on the public to demonstrate...

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Posted December 3, 2012 by Lisa Gonzalez

Last year, when Comcast unveiled its Internet Essentials program, the corporate powerhouse received accolades from FCC Chairman Julius Genachowski. The program was promoted as an example of corporate philanthropy helping to bridge the digital divide.

Comcast received all kinds of positive media coverage for its program. Most of that coverage failed to note that the FCC required Comcast to integrate the program as one of the supposed concessions offered in return for Comcast being able to take over NBC -- giving the largest cable monopolist in the US even more market power.

DSLReports has publicly exposed what many of us suspected all along -- the program was not a concession on Comcast's part. Internet Essentials was originally conceived as a program that would offer slower connections to certain low income households at affordable rates that nevertheless remain profitable for Comcast.

A recent Washington Post Technology profile on Comcast's Chief Lobbyist David Cohen, notes how the program was actually conceived in 2009, but:

At the time, Comcast was planning a controversial $30 billion bid to take over NBC Universal, and Cohen needed a bargaining chip for government negotiations.

“I held back because I knew it may be the type of voluntary commitment that would be attractive to the chairman” of the Federal Communications Commission, Cohen said in a recent interview.

Eligibility depends on four factors:

  • Participants must reside in an area serviced by Comcast
  • Participants must not have an overdue Comcast bill or have unreturned equipment
  • Participants could not have had Comcast service within the last 90 days
  • Participants must have at least one child in the house that qualifies for free or reduced lunches

...

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Posted November 27, 2012 by Christopher Mitchell

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 July 27, 2012 by Lisa Gonzalez

Several months ago, we wrote this post but it got lost in the system. We think it still worthwhile, so here it is.

The word "cartel" drums up many negative annotations - drug cartels, oil cartels. Never anything positive, such as bunny cartels or chocolate cartels. Harold Feld (of Public Knowledge) explains the emergence of another cartel in My Insanely Long Field Guide To The Verizon/SpectrumCo/Cox Deal, on his Tales of the Sausage Factory blog. This is  great tutorial on how the deal came about and what it can mean for the future of broadband.

Rather than chocolate, drugs, oil, or bunnies, the product in question is telecommunications services. At the heart of the cartel are the familiar names: Verizon, Cox, and SpectrumCo. The latter being a consortium of Comcast, Time Warner Cable, and Bright House. All the big hitters in telecom are involved in a way that is veiled, secretive, and not good for competition.

"It's almost as if your companies got in a room together, and you agreed to throw in the towel and stop competing against each other," Sen. Al Franken to representatives from Verizon and the cable companies at the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights, March 21, 2012.

Feld's investigation begins with the licensing and collecting of spectrum by SpectrumCo but ends with a more practical look at how these big hitters have decided that it is better to join forces than to compete. Side agreements, secretive multi-layered entities, and threaded loopholes keep the FCC at bay. This begins as an article about telecommunications, but quickly expands into an antitrust primer. The most alarming facet of this situation is that the product in question is information.

Joel Kelsey of Free Press testified at that same committee, warning how this deal will compromise access, quality, and affordability to broadband in America and how drive us further behind the rest of the world.

Update:

On August 16, 2012, the Department of Justice announced that it approved the deal with changes. Citing:

"...the spectrum transactions facilitate active use of an...

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Posted December 20, 2011 by Christopher Mitchell

It is hard to avoid becoming cynical when watching the federal government interact with big corporations like AT&T. So when AT&T announced it would merge with T-Mobile, giving AT&T and Verizon a combined 3 out of 4 cellular subscribers, I thought two things:

1) What a terrible idea. Higher prices, fewer jobs, less choices, etc.

2) The Federal Government will likely not prevent it - instead opting for some minor concessions that no one will bother to enforce.

Sometimes, it is very good to be wrong.

Cecilia Kang of the Washington Post, decodes the language from Wall Street to explain the biggest winner from the federal government blocking the merger: consumers.

“Without the combination, we think the wireless industry will be further weakened by continued hypercompetitive activity, particularly regarding subscriber acquisition costs,” said Nomura Securities analyst Mike McCormack.

That means customers can still get lower rates as the industry competes for their dollars. T-Mobile, for example, will continue to be a low-cost competitor, according to consumer advocacy group Consumers Union. A survey showed that data plans from T-Mobile were $15 to $50 less per month than those offered by AT&T.

An excellent reminder that what is best for Wall Street is not what is best for the 99%. Big companies like AT&T find competing for customers a hassle that lowers their profits -- they consider a market with four sellers to be hypercompetitive. In wireline, they have acquiesced to the "competition" of two competitors -- cable and DSL.

This is one reason communities build their own networks -- the private sector is not truly competitive when it comes to ISPs and most communities have no prospect real of improvement absent a public investment.

But we should rejoice in this victory -- because we earned it. Without the hard work of many grassroots groups, it is hard to imagine the Department of Justice or FCC standing up to such a powerful corporation.

Some quotes from some of the many organizations responsible for protecting the 99% of us who don't benefit from higher prices and fewer choices.

Andrea Quijada of the...

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Posted December 3, 2011 by Christopher Mitchell

A deep thank you to Public Knowledge for their throwing back the curtain on AT&T's lobbying operation in the attempted takeover of T-Mobile.

Whenever the discussion of public v. private arises, the focus is inevitably on the advantages that the public sector supposedly has over the private providers. We have documented these "level playing field" claims and refuted them.

When I recently visited Lafayette, the head of the public utility told me that in fighting the Local Government "Fair" Competition Act in 2005 (meant to prohibit competition against incumbent cable and phone companies) Lafayette hired one lobbyists and the incumbents hired all the rest. In Tennessee, Chattanooga hires one lobbyist to defend itself from many lobbyists -- in October I learned that AT&T has already registered 26 lobbyists for the 2012 session in Tennessee.

Not only do major national companies like AT&T already have most of the advantages in the marketplace, they spend mightily on lobbyists and campaign contributions to make sure it stays that way. One of the reasons I am an enthusiastic supporters of Larry Lessig's Rootstrikers campaign is because the power of big telephone and cable companies likes in their ability to influence policy and elections, not in the quality of their services in the marketplace.

Back to Public Knowledge -- they researched AT&T's push for th T-Mobile merger and found AT&T hired three former US Senators, four former House members, dozens of staffers from both parties, and spent over $40 million in advertising to push its bid to reduce competition in the wireless market.

“This information gives us a more complete picture of the vast lobbying and advertising resources AT&T has dedicated to trying to ram through this takeover,” said Harold Feld, legal director of Public Knowledge. “It is even more impressive that while many members of Congress have ignored the facts and are backing this takeover, the Justice Department and the Federal Communications Commission have not. It is clear that the data the DoJ and FCC have compiled on this deal will negate all of the money AT&T has spent to mislead policymakers and the public.”

Posted October 11, 2011 by Christopher Mitchell

Harold Feld details "double speak" from Deutsche Telekom in the matter of the AT&T takeover of T-Mobile. They have admitted it will kill jobs and is in no an essential outcome for either company.

Two weeks ago, Deutsche Telekom (DT) Chief Technology Officer Olivier Baujard accidentally spoke truth about T-Mobile to an audience of German investment analysts. After running through the usual company talking points about the effort to sell T-Mobile to AT&T (e.g., it will happen, DoJ is just playing hardball with negotiations, etc.), Baujard said at a public presentation at a Paris broadband conference that: “any rational company had a Plan B and that Deutsche Telekom had other opportunities for its U.S. operations should the U.S. Department of Justice succeed in terminating the deal.”

This is vitally important because, after accidentally shooting the “this is the only way to bring 4G to rural America” argument in the foot by accidentally leaking documents proving AT&T could bring 4G to rural America whenever it wants, and T-Mobile killed the ‘this will create jobs’ argument by confirming that it was preparing pink slips for more than 20,000 employees after the acquisition gets approved, the “T-Mobile is a sickly gazelle” argument is about all AT&T and it supporters have left. Unfortunately for AT&T, this is not the first time Deutsche Telekom has screwed up the “sickly gazelle” storyline by revealing inconvenient truths about its other options. And while there is usually a rule in Washington that “we totally ignore what you say to investors when it contradicts your chosen story,” this deal is sufficiently high profile and has sufficient problems that eventually someone may notice if AT&T’s “Sickly Gazelle Chorus” keeps getting thrown off key by Deutsche Telekom’s “We Have Lots of Other Options Counterpoint.”

Harold offers much more on this job killing merger in his excellent Tales of the Sausage Factory blog.

Coincidentally, the...

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Posted September 26, 2011 by Christopher Mitchell

Before Josh Levy and five other activists met with Yvette Clarke (D-NY), she had signed a letter of support for the AT&T merger with T-Mobile. After a one hour meeting, just after the Justice Department came out against the merger as anti-competitive, she agreed "This deal must be stopped."

This is a great story that goes far beyond AT&T's attempt to monopolize the airwaves. It is a refreshing story for those of us who have been watching in despair, wondering if the vast funds of big companies will doom our democracy. It is a reminder that we cannot give up but have to make sure we are still reaching out to elected officials to ensure they hear from real constituents rather than only from inside-the-beltway lobbyists.

On our key issue, community networks, elected officials too rarely hear from constituents. It is a technical issue that intimidates many. But we must take some time to reach out, educate, and make sure they know how impmortant it is to all of us that local communities maintain self-determination in the digital age.

We cannot wait to reach out until the bad bills are pushed into the light of day -- we need to contact elected officials early in order to build relationships and being the education process. Elected officials are also intimidated by the technology, something that lobbyists use with their "just trust us" approach while bad-mouthing any alternative.

Take heart, write in, talk to your reps, and if you are so bold, set up face to face meetings. Feel free to ask us for advice if you want -- and if you are in Minnesota, feel free to invite us along.

Posted September 7, 2011 by Christopher Mitchell

In the aftermath of AT&T accidentally admitting they have nothing but a smokescreen to justify buying one of their few competitors, it seemed that nothing had changed and AT&T was going to continue pushing this anti-competition, anti-consumer deal through.

But then the Department of Justice filed suit to prevent it. What does that mean and what is next? Public Knowledge tells us below. In the meantime, Sprint has also filed suit under the Clayton Act to separately oppose the takeover.

Why do we care here at Community Broadband Networks? Because the biggest companies - AT&T, Comcast, Verizon, CenturyLink, etc. - have tremendous market power that allows them a disturbing amount of power over the future of access to the Internet and as they become even larger, the prospects of any community building a network in their territory becomes more bleak.

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