Yesterday, FCC Chair Tom Wheeler
surprised a lot of people by publicly discussing the woeful state of broadband competition in the U.S. Some viewed his remarks as an indicator that the commission is leaning toward blocking the pending Comcast/Time Warner Cable merger, but the ever-optimistic (read: delusional) Comcast argue that Wheeler’s words actually support the deal.
“The facts are simple,” writes Comcast’s merger whisperer, Exec. VP David Cohen. “Our transaction will have no negative impact on the competitiveness of the broadband consumer market… Every consumer in America will have the same choices among broadband providers after this transaction as before.”
As we’ve said repeatedly, this lack of competition — and the fact that it’s only going to remain the same — is precisely the problem with this merger.
We should not reward a fundamentally flawed industry that has allowed Comcast to grow, not by being the best at what it does, but by purchasing smaller companies and acquiring their exclusive contracts with local governments.
Comcast brags about spending billions to improve its network. Why doesn’t it take the many billions of dollars it plans to spend on this merger and offer a service that brings competition to consumers?
Google is trying. AT&T is trying (though they don’t want anyone else to). Even ViaSat’s Exede is starting to offer a satellite broadband plan that is semi-competitive to terrestrial service.
But Comcast doesn’t want to take the risk of having to win over consumers when it could just force them to become Comcast customers by acquiring Time Warner Cable.
And what about the options for the millions of customers who are being passed around like hot potatoes in this deal?
1.6 million current Charter customers will become Comcast subscribers, while 1.4 million Time Warner Cable customers get turned over to Charter without any say-so in the matter.
Then there are the 2.5 million Comcast customers being dumped off into a completely new company, GreatLand, that is 33% owned by Charter.
That’s 5.5 million Americans, most of whom had no choice in cable provider, that will be handed over to a new company within months just because Comcast doesn’t want to compete for customers in California, New England, Tennessee, Georgia, North Carolina, Texas, Oregon, Washington, and Virginia
This sort of passing around of customers happened for a long time in the wireless market, as regional players consolidated and swapped. The difference there is that most Americans still have multiple options for wireless service, so if you were a Cingular customer unhappy about becoming an AT&T subscriber, you could jump ship to T-Mobile, Sprint, Verizon, or numerous regional and prepaid carriers.
Even with four major national wireless providers, the FCC and Justice Dept. successfully blocked AT&T’s acquisition of T-Mobile because it would have left consumers with only three options for wireless service.
Meanwhile, as Chairman Wheeler’s presentation demonstrated, fewer than 10% of Americans have access to even three options for decent broadband service.
In reiterating his stance, Cohen makes perhaps his most inane statement yet on competition:
“[W]hether you are satisfied with the robust state of broadband competition today or deeply troubled by an absence of broadband competition, our transaction will simply not have a negative impact on the current competitive state of the broadband market in America today.”
This is like someone serving up bowl of hot rocks for dinner and saying, “Whether you’re satisfied with this warm filling bowl of mineral-rich goodness or deeply troubled by the fact that I’m telling you to eat a bowl of hot rocks, it doesn’t change the fact that this is all there is to eat.”
by Chris Morran via Consumerist
