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Comcast Fabricates, Hallucinates Competition to Defend Merger
by Karl Bode 01:23PM Tuesday Apr 08 2014
With a 180-page filing (pdf) and a blog post, Comcast today formally made their sales pitch to regulators regarding approval of Comcast's planned $45 billion acquisition of Time Warner Cable. Most of what's included in the sales pitch are things Comcast has argued repeatedly already in the court of public opinion; namely that the two companies combined will create amazing synergies that will benefit consumers in a myriad of ways, and that the merged company can't possibly engage in bad behavior because relatively tiny operations like Google Fiber will somehow keep them honest.

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While few people like the idea of two of the most disliked companies in any industry fusing together, there would be some benefits; the company's filing makes clear to highlight the fact that Time Warner Cable wasn't exactly bullish on broadband speed upgrades, and that customers will see faster broadband speeds and improved TV services and set top boxes:
quote:
Nowhere will these benefits be more important than in the broadband space. While TWC has upgraded its entire network to DOCSIS 3.0 and has plans to improve speeds and further digitize its network, Comcast has already transitioned to a fully digital network, stands ready to implement DOCSIS 3.1 (the next-generation broadband standard), and has rolled out some of the fastest Internet speeds and the largest Wi-Fi network in the nation.
Granted on the broadband front speed isn't as big of an issue as price, something Comcast rather floats over as you might expect. Both companies have become experts at nickel and diming their subscribers, and a merger certainly isn't going to change that. The other unaddressed concern is market power; as AT&T and Verizon back away from DSL markets they don't want to upgrade, Comcast faces less competition and becomes more powerful than ever.

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Instead of addressing this, Comcast manufactures a chart (right) that pretends there's more broadband competitors at play than there actually are. For example, did you know there's 29 broadband competitors in the NYC region? It's a vast cornucopia of competition in broadband if you simply add up all possible companies in a large geographic market and pretend they all directly compete head to head!

While Comcast's correct to point out that Time Warner Cable and Comcast don't compete directly, that doesn't really address worries about Comcast's mammoth size. As upgrade-phobic DSL providers stagnate and retreat, Comcast grows bigger and dominates a larger portion of both the last-mile broadband market and the media market, leaving nothing in place to stop them from using a one-two punch of ever-expanding usage caps and restrictive licensing to hamper competition in the content space.

Comcast pretends that everyone from Google Fiber to wireless carriers are going to somehow magically stop this. As we've discussed however Google Fiber's never going to have the kind of footprint to meaningfully impact Comcast's business, and wireless companies are now marketing partners with the cable industry across more than half the country. Verizon's actively pushing unwanted customers in Comcast's direction; they're really going to provide competitive checks and balances to Comcast's expanding dominance?

I'd expect the FCC to ignore these concerns and approve the deal with a few theatrical conditions applied. Comcast's top lobbyist David Cohen has become a master at volunteering piddly conditions that look tough but aren't. For example Comcast will be required to continue adhering to deceased FCC neutrality rules that do little to nothing to actually protect consumers. Comcast will also be "forced" to continue offering $10 low-income broadband few actually qualify for. None of these will address the potential anti-competitive problems caused by Comcast's size.

It's possible that FCC boss Tom Wheeler will throw a few ambiguous and tiny wrenches into the mix, such as conditions that pretend to address growing peering concerns. However, consumers really shouldn't hold their breath for any meaningful conditions that would impact their wallet or their lack of broadband options. It seems unlikely that a regulatory agency that historically hasn't given a serious damn about soaring TV and broadband prices caused by a lack of competition is going to suddenly start now.


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TamaraB
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reply to biotech

Re: Competition in my area? None.

Competition is the key. Classify ISPs as public utilities, and problem solved!

We are rapidly approaching the point where Internet access is required in order to function properly in our society. So much of our government and business is already becoming only accessible via the Internet, that it needs to be reclassified as a public utility.

Here in NY, we can choose which Electric and natural gas company we purchase from. The electricity and gas is carried by the wires and pipes originally installed by Con Edison. Somehow, I can purchase power and gas from a number of competing utility companies. I get knocks on my door from ESCO sales people offering me better electric rates all the time.

If Internet access was treated like any other utility, and one could buy access from any provider, then competition would increase exponentially overnight, and it wouldn't matter how big an ISP got, they would have to compete with a huge number of companies.

I should be able to purchase access from any ISP in the country, no matter who put the wires under the public streets here, in the same way other utilities are regulated. It would be an easy fix!

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IPPlanMan
Holy Cable Modem Batman

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No competition in DC...

Comcast runs DC, except for a few small pockets of RCN overbuilding. Fios? It's still under construction.... »www.verizon.com/about/community/···ion.html and probably won't be available to most of DC for years.

The whole cable franchise system is ridiculous. Cable should be treated like a gas/electric utility. You get the pipe/wire to your home and you pick any provider.
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