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Comcast Antitrust Suit Moves Forward
Seeks $875 Million for Predatory, Anti-Competitive Behavior
by Karl Bode 08:16AM Monday Jun 11 2012
According to a 2003 class action lawsuit against Comcast, the cable giant's anti-competitive behavior in the Philadelphia area resulted in the company overcharging users to the tune of more than $875 million. The suit accuses Comcast of violating sections 1 and 2 of the Sherman Act by gobbling up competitors, then overbilling consumers for services. Last August a 2 to 1 ruling (pdf) allowed the case to move forward, and a Federal Judge in Philadelphia last month allowed the case to go to trial:
quote:
"Because it possessed market power, its decision to target promotional discounts to deter a new entrant may be deemed predatory and an exercise of market power to maintain its monopoly,” Padova wrote of Comcast in his pre-trial opinion....The lawsuit was filed by customers who contended the Philadelphia-based company wrongly “entered into agreements with its competitors to allocate the nation’s regional cable markets amongst themselves” and “used its monopoly power to raise cable prices to artificially high, supra-competitive levels,” according to Padova’s ruling.
The suit suggests that Comcast has engaged in similar behavior in Boston -- driving prices up so drastically the FCC recently re-established price control authority for local regulators after declaring the market utterly uncompetitive.

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tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
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In a world...

Where consumers think they have rights to competition... and next generation *UNLIMITED* broadband for dirt cheap prices.

This is more likely fantasy than getting Comcast to compete with Verizon and AT&T:

»www.youtube.com/watch?v=B3DcWtkKeIY

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Hmmm...

Not a fan of Comcast but I have to ask, how is their recent spate of cable system buyouts "gobbling up competitors?" Most local cable systems have no competition, regardless of who owns them, unless the people there are served by something like FIOS or UVerse.

Perhaps this lawsuit should name every government agency that approved the Comcast-NBC merger as defendants. Now THAT merger actually was anti-competitive.
--
Romney 2012 - Put an adult in charge.
Wilsdom

join:2009-08-06

Re: Hmmm...

True, though I guess larger monopolies also change the labor and supplier market. And at this point internet connectivity is important enough that consumers should be able to move to get a different service since government refuses to regulate local monopolies in any meaningful way.

skeechan
Ai Otsukaholic
Premium
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AA169|170
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Perhaps they means competitors in buying from program providers (e.g. Disney).

Morac
Cat god

join:2001-08-30
Riverside, NJ
kudos:1
Maybe they they meant that instead of Comcast trying to compete with local cable companies, Comcast simply buys them.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: Hmmm...

said by Morac:

Maybe they they meant that instead of Comcast trying to compete with local cable companies, Comcast simply buys them.

But even if Comcast wasn't buying these companies there was no competition anyway. You either had the choice of the local cable company or nothing. That wouldn't change even if Comcast bought them out.
--
Romney 2012 - Put an adult in charge.

Morac
Cat god

join:2001-08-30
Riverside, NJ
kudos:1
Reviews:
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Re: Hmmm...

said by pnh102:

But even if Comcast wasn't buying these companies there was no competition anyway. You either had the choice of the local cable company or nothing. That wouldn't change even if Comcast bought them out.

Yes, but there would be if Comcast had decided to run lines and compete with the local company instead of simply buying the local company. The later was likely cheaper for Comcast, but still leaves the consumer with no choice.
--
The Comcast Disney Avatar has been retired.
Telco

join:2008-12-19
Reviews:
·Callcentric
Amazing how those socialist in Europe, Asia / Pacific) have ample competition because of their 'government'. Whereas, we have jack s--t and these private monopolies are laughing all the way to the bank.

Indeed, it was amazing how I had a good 10 to 15 broadband providers to choose from when overseas, versus the 1 here. And I live in a metro area of 5.5 million.

I'm currently have a 5 month long billing issue with my cable company and really what can I do... Sue? Nope, as they have inserted arbitration only causes in their contracts; something ironically illegal under various other legal systems.

Not to mention, had this occurred abroad, I'd contact their FCC equivalent, which also handles billing issues, and they'd be fined $50 just for me reporting the issue. Once it escalates to level three, the carriers are automatically fined hundreds for failing to resolve the issue.

Following a review, the agency can then force them to pay for the errors, in addition to these fines. The citizens win and the corporation is forced to be ethical - or pay up.

What's the chance a single Republican endorsing the equivalent here? I think I have a better chance of winning both lottery syndicates for 1 month straight.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: Hmmm...

said by Telco:

Amazing how those socialist in Europe, Asia / Pacific) have ample competition because of their 'government'.

...

What's the chance a single Republican endorsing the equivalent here?

Hate to break it to you bro but the Republicans aren't in charge. Any complaints you have against the current system should be lodged against the current party in power.

Now I'm not saying the GOP would change things, as rubberstamping of mergers in the telecom and content sector has been going on through administrations of both parties, but don't be naive enough to believe that this is a partisan issue.
--
Romney 2012 - Put an adult in charge.
Telco

join:2008-12-19
Reviews:
·Callcentric

Re: Hmmm...

said by pnh102:

Hate to break it to you bro but the Republicans aren't in charge. Any complaints you have against the current system should be lodged against the current party in power.

Now I'm not saying the GOP would change things, as rubberstamping of mergers in the telecom and content sector has been going on through administrations of both parties, but don't be naive enough to believe that this is a partisan issue.

This is something that seems to evade every republican but we have three branches of government and things like these are the responsibility of congress. I know that every GOP pundit claims it's all the president but that's not how the American system works.

Guess which party controls the house.. Democrats are unable to do anything at the senate level, because of this vote against everything Republican stance.

Like I pointed out, the Republicans are against the consumer protection agency and refused to have Elizabeth Warren appointed.

It's just amazing how every single Republican I speak with accuse everyone else of being biased, indoctrinated, and clueless.

However, when you bring up actual voting records of republican officials, then it becomes 'all of government' that is to blame. Never ever the Republican's fault, even when they vote X on a bill; in black and white for all to see.

IowaCowboy
Iowa native
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Springfield, MA
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Good...Break them up

Hopefully they'll break Comcast up like they did Bell System in the '80s. It would be a good thing if Comcast was force to lease their lines to competitive ISPs like the telcos have to allow CLECs on their lines.

Too bad Judge Greene isn't hearing the case.

gar187er
I do this for a living

join:2006-06-24
Dover, DE
kudos:4

Re: Good...Break them up

are you aware how cable works? you cant share the coax with a seperate ISP....
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I'm better than you!

IowaCowboy
Iowa native
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Re: Good...Break them up

They can be forced to lease bandwidth to competitive ISPs. They did something similar back in the late '90s with the power industry in mass by separating the supply portion from the delivery portion. They could do the same by making Comcast responsible for bandwidth delivery and the ISP side (content, e-mail, servers, DNS, etc) would be the responsibility of third party providers. The bahavior of Comcast and other broadband providers is similar to the behavior of AT&T and Bell System before the 1984 divestiture. The phone companies are required to lease their lines to third party providers and I see no reason that Comcast shouldn't do the same.

NormanS
I gave her time to steal my mind away
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said by gar187er:

are you aware how cable works? you cant share the coax with a seperate ISP....

Actually you can, technically. Legally is another matter (5th Amendment issue).
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum

IowaCowboy
Iowa native
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Re: Good...Break them up

said by NormanS:

said by gar187er:

are you aware how cable works? you cant share the coax with a seperate ISP....

Actually you can, technically. Legally is another matter (5th Amendment issue).

Judge Greene found legal basis to break up AT&T and the Bell System. It's called the Sherman Act.

NormanS
I gave her time to steal my mind away
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Re: Good...Break them up

said by IowaCowboy:

Judge Greene found legal basis to break up AT&T and the Bell System. It's called the Sherman Act.

Which has what to do with forced sharing of infrastructure?
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum

IowaCowboy
Iowa native
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Re: Good...Break them up

said by NormanS:

said by IowaCowboy:

Judge Greene found legal basis to break up AT&T and the Bell System. It's called the Sherman Act.

Which has what to do with forced sharing of infrastructure?

Back before the 1984 Bell Divestiture (I was only 2 months old at the time) AT&T and Bell system had a monopoly on telephones owning every piece of infrastructure from the phone in your house, the inside wiring, every neighborhood pay phone to the long distance lines that connected the cities. Seems very similar to the way broadband ISPs are behaving today with their ability to snuff out competition and maintain high prices and low quality service. That changed with the telephone in 1984 when Judge Harrold Greene ordered the separation of local and long distance carriers and ordered AT&T to divest the local telephone operations. And part of that order is that the baby bells lease access to their lines at cost. Thanks to the bell divestiture, telephone service is dirt cheap. Had AT&T not been broken up, we'd still be paying an arm and a leg for long distance. Just hopefully it won't take 83 years to bring competition in broadband.

NormanS
I gave her time to steal my mind away
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Re: Good...Break them up

So how much bandwidth on the copper was Bell's, and how much was the competitor's after the divestiture?

You can't share bandwidth with copper as you can with coax.
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum
Telco

join:2008-12-19

Re: Good...Break them up

You indeed can. What they do (did) abroad is make the last mile copper accessible by any carrier that has equipment at the exchange. This allows anyone to install their DSLAMS and bridge to the copper line.

NormanS
I gave her time to steal my mind away
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Re: Good...Break them up

said by Telco:

You indeed can. What they do (did) abroad is make the last mile copper accessible by any carrier that has equipment at the exchange. This allows anyone to install their DSLAMS and bridge to the copper line.

Only one "black box" at a time, near as I can tell. While AT&T owns the copper between the demarc on my premises and the CO, they do not own the hardware the copper serving my premises is tied to. Neither dial tone, nor DSL are shared with AT&T.
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum
Telco

join:2008-12-19
Reviews:
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They indeed can. The would be able to tunnel the data too whoever once it hits the headend.

The best solution is to build a national (wholesale) FTTH network, and much like using an interstate, allowing any carrier to resell over it. It precisely what they Aussies are building as we speak.
jeff17

join:2000-12-11
US

2 recommendations

huh?

Is it Comcast's fault that FIOS, DSL and Sat aren't competitive enough or in enough markets? Maybe Comcast should build alternate, competitive networks and then they can complete against themselves, driving prices down so far that they pay you to take their service.

That makes sense, right?

Penalize a company because they charge what people will pay, and because no other company wants to compete in that space.

Dumb.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
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·Verizon FiOS

Re: huh?

said by jeff17:

Is it Comcast's fault that FIOS, DSL and Sat aren't competitive enough or in enough markets? Maybe Comcast should build alternate, competitive networks and then they can complete against themselves, driving prices down so far that they pay you to take their service.

That makes sense, right?

Penalize a company because they charge what people will pay, and because no other company wants to compete in that space.

Dumb.

Most people will look at the hard 300gb cap and the no-compete with Verizon as the straws that break the camel's back of common sense in where Comcast intends to go with their anti-competitive behavior vis a vis sale of wireless spectrum.
jeff17

join:2000-12-11
US

Re: huh?

Any company (Goole or other) with the funds and wherewithall can build a competitive network. No one is holding them back.

spewak
R.I.P Dadkins
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Re: huh?

said by jeff17:

Any company (Goole or other) with the funds and wherewithall can build a competitive network. No one is holding them back.

Company or Muni or both? What say you?
--
The weekend is here, grab a can of beer!
jeff17

join:2000-12-11
US

Re: huh?

Either, or both.
Wilsdom

join:2009-08-06
Right all you need to be is a huge and wealthy ISP and you can compete! For example, Comcast...oh, wait....

Somnambul33t
L33t.
Premium
join:2002-12-05
Blackwood, NJ
said by jeff17:

Is it Comcast's fault that FIOS, DSL and Sat aren't competitive enough or in enough markets? Maybe Comcast should build alternate, competitive networks and then they can complete against themselves, driving prices down so far that they pay you to take their service.

That makes sense, right?

Penalize a company because they charge what people will pay, and because no other company wants to compete in that space.

Dumb.

thats pretty much how business works these days. If you can't beat 'em, sue 'em. if the suit fails, hire lobbyists and have laws passed that benefit you and penalize them. That is not capitalism, that's crony capitalism.

also, are we STILL writing articles involving the Sherman acts? As soon as i saw that i stopped reading b/c i instantly know the suit has no real credibility (by 'real' i mean not based whatsoever in free-market principals or the principals of equality under law)

skeechan
Ai Otsukaholic
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There is no disputing Comcast's history

Comcast during that period (early to mid 2000's) did engage in predatory pricing. Where they faced competition from a muni television provider (like Braintree or Utopia for example) they SLASHED rates WAY below their regular market rates. And these rates were subsidized by other Comcast markets as evidenced by the fact that Comcast's profit margins are not 100% while they cut service rates nearly in 1/2 so they're obviously losing money there. Other people, even in the same market area where the munis didn't service, paid full price.

This was clearly a violation of the Sherman-antitrust act which states it is "...unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality...and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition "

Here is an old DSLR item from the time »'Discounted' Competition
djoropallo

join:2003-10-20
Maple Shade, NJ

Re: There is no disputing Comcast's history

When Comcast came into our town and promised not to raise rates, in 2000, they restructured the "packages" in effect raising rates. We were paying $43/mo which included HBO. They kept the basic price $43, but you needed to pay $17 per TV for a box in order to get HBO, something we didn't need before them. The prices continued to skyrocket since. We switched to DirecTV then, but in turn lost out on all of the local sports programming because CC had a loophole and refused to share it.

skeechan
Ai Otsukaholic
Premium
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AA169|170
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Re: There is no disputing Comcast's history

Same when Comcast bought ATTB in SoCal. Within 18 months prices went from $77 to $105 for a nearly identical package and for HSI only customers they got a new $15 (30%) how dare you not have CATV penalty.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
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All industries are not treated equally.. take for instance the retail gasoilne sector which is franchised under an umbrella name.. say for instance ExxonMobile... hence, the bigger you are and the more money you have.. the more overt the public policy (aka US law sways to their favor) Remember a time pre 2002 when gasoline prices never fluctuated more than 10 cents from sea to shining sea? Those days are LONG GONE!

It took Verizon 7 years from the 1996 telecom reform act to decide on FTTP, and another 9 years to squander their reputation on price gouging for wireless and halt FIOS/wireline deployment amid questionable spin-off of copper networks which offloaded BILLIONS in debt. Comcast isn't without their controversial moves to delay deployment of docsis 3 amid no significant competition (sat in mothballs for 5 years). I doubt they are squeaky clean on backing AT&T into a corner on U-Verse either..

I don't think the sherman act will work.. there is a pattern of conduct that goes beyond sherman all the way to racketeering & collusion. This rises to the level of criminal conduct.

Much like in 1996, if you want competition.. there has to be a financial incentive. Tier-1 isp's and 3rd party carriers need to get into the last mile business.. thefore in this case: if these guys can't join 'em.. beat 'em.. that is-- break up comcast, at&t and verizon... big carrot.. but a bigger stick..

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:4

So it's ok to be the only provider..

..as long as you don't offer promo pricing?

The boston market is uncompetitive, because BOSTON city gov't drives away competitors, and imposes excessive regulation, fees and costs on any provider in that market.
jeff17

join:2000-12-11
US

Re: So it's ok to be the only provider..

No promo pricing, and no high-than-normla pricing, either. Stupid, isn't it?

So why does the movie theater charge $5 for a candy bar when I can get it next door for $1? Or a Hamburger at Disney World is $8 when it should be $2?

Let Comcast charge whatever they want, and if noone wants it, they don't have to pay. Done.

cast sucks

@dsl.net

CSN NW and CSN Philly / TCN Philly are anti-competivle

CSN NW and CSN Philly / TCN Philly are anti-competivle also they are not on dish or directv.

Also RCN does not have TCN so you miss out on CSN + games.
Os

join:2011-01-26
US
Reviews:
·Comcast

Re: CSN NW and CSN Philly / TCN Philly are anti-competivle

And last I checked, DirecTV was anti-competitive with Sunday Ticket and the full Extra Innings package with both teams' telecasts.

The terrestrial loophole was closed. DirecTV can have Comcast SportsNet Philadelphia and Comcast SportsNet Northwest if they want, they just don't want to pay the carriage rate for them.

Capitalist99

@verizon.net

How about some capitalism

It's sad that the only real country-wide market capitalism in internet access comes from Europe. Most Americans only have 1 choice, and the 20ish percent who has 2 legitimate choices pay less. And yet, in Europe there are 4+ providers, and innovation has never been better.... and prices have never been lower... and companies are making great money. Maybe you can argue Montana is a very different geography, but Boston isn't that different than Frankfurt. Real competition now! Better products, better prices, and a more competitive America.
ackman

join:2000-10-04
Atlanta, GA

Would be a great precedent

Oracle Corp has been destroying all their competition, one by one, for the past decade. Instead of creating better products internally, they chose to buy their competitors in order to stifle competition. First Comcast, next Larry Ellison. Now it seems their only business model is to sue any and every company that threatens their profitability, for anything they can pull out of their corporate arse.