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Community Broadband Media Roundup - September 19, 2014

The media is picking up on Chairman Wheeler’s notice to big telecom: 4Mbps is not going to cut it anymore. Wheeler said speeds closer to 10Mbps should be classified as high speed. A good step, but by the end of this Media Roundup, you’ll be questioning what that paltry 10 Mbps can do for communities…

Michael Nielsen with Motley Fool pointed out reasons that big telecom should be scared: competition, competition, competition. Meanwhile, AT&T patted itself on the back because they say 98% of its customers have download speeds of 6 Mbps or higher (so they claim). So yes, congratulations are in order, in the most minor way possible. 

Want another reason big telecom should be scared? Free Marketeers are on board with Net Neutrality. From James J. Heaney: 

“… it seems odd for a conservative – whether an old-guard big-business Bush-era conservative or a new-guard Paulite libertarian conservative – to support Net Neutrality.

Except I do Internet for a living, and I am one of the lucky ones who actually knows what Net Neutrality means and what it’s responding to.  And, folks, I’m afraid that, while L. Gordon Crovitz and Rich Lowry are great pundits with a clear understanding of how Washington and the economy work, they don’t seem to understand how the Internet works, which has led them to some wrong conclusions.”

AT&T/DirecTV Merger:

Ars Technica’s Jon Brodkin reported on our comments about the AT&T/DirecTV merger, noting what the merger could mean for aging infrastructure:

“AT&T’s proposed $48.5 billion acquisition of DirecTV will reduce competition for TV subscribers, increase AT&T’s “incentive to discriminate against online video services,” and give AT&T more reasons to neglect its aging copper network, consumer advocacy groups argue in a petition to deny the merger.”

The Hill also published an article citing ILSR and Public Knowledge’s comments:

‘"[the organizations] told the agency in a petition that the merger would be bad for consumers, especially against the backdrop of other media deals such as Comcast’s bid to buy Time Warner Cable. “Companies may think they need greater scale to enter new markets or keep up with their rivals. But unless they can show how this would benefit consumers, it is immaterial,” they wrote. “If anything, the FCC should be more skeptical of mergers that come in waves, since in the aggregate consumers suffer from a more highly concentrated, centralized marketplace, with fewer choices, homogenous offerings and increased likelihood of coordinated effects.”’

Internet Access Competition Update:

Did you know that communities that have a service provider that offers a 1 Gig service have a per capita GDP that’s 1.1 percent higher than other communities that have little or no gigabit services? That’s the report from Sean Buckley on Fierce Telecom this week.

But cities that didn’t win the “gigabit google lottery” are taking action on their own. According to Denise Linn of Next City, Louisiville has identified three companies that will invest in a gig in areas of town. 

“Though Louisville’s future network will not be supported with public funds (in contrast to projects in Wilson, North Carolina or Lafayette, Louisiana, for example), initial momentum certainly came from the bottom up. Demand for faster speeds was fostered and articulated by the city’s residents, academics and the business community.”

Of course we think a publicly-owned network is a better bet for the city, but this is a good step.

Meantime, a conference on gigabit networks sparked three communities in Connecticut to explore their options. They modeled their request after Louisville.  Fierce Telecom and The Westminster Dispatch had the story: 

"As soon as we started the conversation about gig networks, we heard from businesses, universities, high-tech start-ups, mayors and first selectmen – really such a variety of stakeholders – about how greater Internet speeds at lower costs are essential to their functioning," Katz said in a West Hartford Patch article. "We knew it was an important economic development tool, but we've learned gig networks are also essential for medicine, precision manufacturing, education, e-government, many different people in different sectors clamoring for gig networks."

Jason Myers reported that the initiative is “open to any and all municipalities in Connecticut." Organizers hope that network partners will be encouraged by more cities joining the initiative. 

Big News from the land of 10,000 lakes: Joan Engebretson reported in Next City that Paul Bunyan Communications — a co-op in Northern Minnesota will be home to the nation’s largest public gigabit service as early as 2015. The “GigaZone” will cover about five thousand square miles. 

“Expanding broadband is a great equalizing force for boosting rural economies. Today you don't need to live off a major highway or in a bustling city to find a good job, start a new business, or get a high quality education but today you do need a high-speed Internet connection," said Senator Amy Klobuchar, who has championed the effort of rural broadband access at the national level since being elected.”

Seattle’s new Chief Technology Officer has broadband on his mind. GovTech profiled Michael Mattmiller this week

“The Federal Communication Commission is now considering altering the definition of broadband Internet -- increasing the speed from 4 Mbps to 10 Mbps. For a city to keep up with the changing standards, it must consider new avenues, Mattmiller said, like eliminating red tape. The city council is now reviewing proposed changes to the Seattle Department of Transportation’sDirector’s Rule 2-2009, which made it difficult for broadband providers besides Comcast to develop their networks in the city.”

And finally, we thought Santa Monica’s public network was fast before— now they’re raising the bar yet again. The city now boasts a 100 Gigabit per second fiber network.

“This is only the latest milestone in a long line of advancements Santa Monica has made in the broadband arena. We are considered a leader in social tech and have leveraged our fiber optic network to advance free Wi-Fi in public parks and major bus routes, provide internet to our libraries, and connect our schools and college locations. These efforts have contributed to education, economic development, and provide impressive Internet speeds for large conferences and events. We are proud to be the 1st, 100 Gigabit municipal network in the U.S.,” said Jory Wolf, the City of Santa Monica’s Chief Information Officer.

Let that sink in.

Community Broadband Media Roundup - Week of August 29, 2014

"When private industry does not answer the call because of market failures or other obstacles, it is appropriate and even commendable, for the people acting through their local governments to improve their lives by investing in their own future."

~ John McCain, 2005

Wait. What? Brendan Sasso from The National Journal brought up some excellent points this week-- some things we’ve been pondering for a good long while.

Why would so many republican lawmakers who claim to value self-determination and self-rule deny citizens the right to take on Big Telecom? Why would Republicans who rally for smaller government and healthy competition turn around and argue that the State should step in and bar citizens from having their basic broadband needs met?

That quote from Sen. John McCain was spoken when McCain and a bipartisan group of senators (Republicans John McCain, Lindsey Graham, and Norm Coleman and Democrats Frank Lautenberg, John Kerry, and Russ Feingold) introduced a bill to block states from restricting local governments' ability to provide publicly run and funded Internet service. It can be explained pretty simply, According to Sasso: 

“President Obama has taken a position on the issue this time around. That’s why 11 Republican senators are “deeply troubled” that the FCC would "force taxpayer funded competition against private broadband providers."

Municipal Broadband got a shot in the arm this week from the Center for Public Integrity as well. Allan Holmes wrote extensively about how Big Telecom spends millions of dollars in litigation, advertising and lobbying “instead of investing in improving infrastructure in these communities.” 

“On a scale of 1 to 10 on who is the most powerful lobbying presence in Tennessee, AT&T is a 12,” said a long-time lobbyist in Nashville who asked not to be identified so he could speak candidly about lobbying in the state. “They are the big horse in the race, and they are unstoppable.”

AT&T and its president of Tennessee operations Joelle Phillips didn’t respond to CPI emails asking for comment, but Alex Wilhelm of TechCrunch definitely added his own thoughts. He outlines some of his concerns:  

“Increasing competition is good. Helping bring more American citizens onto the Internet at high speeds is good. And it is especially good to bring quick digital access to the world’s information to rural areas that are not currently served by private enterprise. As such, there is a place for municipal broadband in America.

More broadly, if citizens want to come together and build a service for themselves using monies that they elect to raise, they should be able to. I struggle to understand how that idea is controversial.”

The initial comments period for the Time Warner merger plan came to an end Friday. Before it closed, ILSR and 64 other reform groups made their voices heard. Value Walk staff reprinted our comments, the basis of the argument is this:

“The merger would give Comcast too much control over the future of the Internet and communications infrastructure and undermine the diversity of ownership and content in media.” 

We couldn’t have said it better ourselves…

Comcast Responds to "Break-Up" Call With Customer Service Rep

Comcast's Chief Operating Officer, Dave Watson, recently posted a letter on the Team Comcast employee site in response to the viral customer-retention call from hell, reports the Consumerist. In his letter to Comcast minions, Watson admits:

The agent on this call did a lot of what we trained him and paid him — and thousands of other Retention agents — to do.

Watson also expresses that the call was "painful to listen to" and vows:

We will review our training programs, we will refresh our manager on coaching for quality, and we will take a look at our incentives to ensure we are rewarding employees for the right behaviors. We can, and will, do better.

Just a few days ago, over at the "Comcast Voices" blog, Tom Karinshak, Senior VP of Comcast's Customer Experience, vowed to investigate and wrote:

We are very embarrassed by the way our employee spoke with Mr. Block and Ms. Belmont and are contacting them to personally apologize.  The way in which our representative communicated with them is unacceptable and not consistent with how we train our customer service representatives. 

Regardless of whether one chooses to believe the response crafted for Comcast employees or the one posted to placate the general public, is this the company we want controlling our online access? If Comcast is allowed to merge with Time Warner Cable, we can expect more of the same.

Governing Looks at What the Comcast - Time Warner Cable Merger Could Do to Munis

The debate surrounding the proposed Comcast Time Warner Cable merger continues. The Department of Justice and the FCC ruminate over the deal while the media speculates about the future.

Governing recently published an article on potential side effects for the municipal network movement. Tod Newcombe reached out to Chris for expert opinion.

From Governing:

Partially thanks to Comcast and other cable giant's lobbying, 19 states have already passed laws that ban or restrict local communities from setting up publicly owned alternatives to the dominant provider in the area. Municipalities that pursue publicly owned broadband often cite several reasons for their efforts, ranging from lack of competition and choices in the area to a desire for faster speeds at lower costs. But Mitchell fears the lobbying power of a combined Comcast-Time Warner would choke off what little leverage remains for local governments when it comes to gaining state approval to build publicly owned broadband networks.

Unfortunately, the cable company cyclops borne out of this deal would create a ginormous lobbying monster. Comcast and Time Warner Cable wield significant political influence separately; a marriage of the two would likely damage the municipal network movement. The Center for Responsive Politics reports Comcast spent over $18 million in 2013; Time Warner Cable spent over $8 million.

Chris told Governing:

"Judging by the amount of opposition to the merger, I think people are seeing that we're at a tipping point and that there are ways they can make investments at the local level and control their own destiny," said Mitchell. "A lot of people and local businesses understand that the Internet is really important and that we can't trust it to a few corporations. But I don't see that level of understanding from most elected officials yet."

No Scale Advantage in Netflix Speed Ranking

Netflix has continued to publish monthly rankings of ISPs average speed in delivering Netflix video content to subscribers. Though they first published data about the largest, national ISPs like Comcast, AT&T, and the link, they have an expanded list with many more ISPs.

I recognize two municipal networks on the expanded list of 60 ISPs. For March 2014, the Chattanooga EPB network is ranked 4th and CDE Lightband of Clarksville, Tennessee, is ranked 7th.

With the exception of Google Fiber and Cablevision, the top 10 are regional or somewhat smaller ISPs. Combined with the significant spread across the rankings of the biggest ISP, we see no empirical evidence for any kind of benefits to subscribers from scale. That is to say, Netflix data shows that bigger ISPs do not deliver better customer experience.

We do see more evidence that fiber networks deliver faster speeds on average, with cable following, and DSL trailing distantly. This is why DSL networks are losing customers where people have a choice and cable is gaining (most often where there is no fiber option).

Any claims by Comcast that allowing it to merge with Time Warner Cable would result in better service should be subject to extreme skepticism. Many much smaller networks deliver faster connections and raise rates far less often that Comcast, which is at the high end of frequency in rate hikes.

The problem with the biggest companies is that they focus on generating the highest returns for Wall Street, not delivering the best experience to Main Street.

Long List of Public Interest Groups Sign on to Free Press Letter Opposing Comcast Time Warner Cable Merger

The Free Press announced that more than 50 public interest groups, including the Institute for Local Self-Reliance, signed on to its letter in opposition to the Time Warner/Comcast merger.

The letter, addressed and delivered to Attorney General Eric Holder and FCC Chairman Tom Wheeler, begins:

The proposed Comcast-Time Warner Cable merger would give one company enormous power over our nation’s media and communications infrastructure. This massive consolidation would position Comcast as our communications gatekeeper, giving it the power to dictate the future of numerous industries across the Internet, television and telecommunications landscape.

In the press release, Craig Aaron, President and CEO of the Free Press, stated:

“The question before the FCC is whether this deal serves the public interest. The answer is clear: A bigger Comcast is bad for America.

“Merging the nation’s two biggest cable-Internet providers would turn Comcast into our communications gatekeeper, able to dictate the cost and content of news, information and entertainment. We need an Internet and video marketplace that offers people high-quality options at prices they can afford — not a near-national monopoly determining what we can watch and download.

“In the past four years, Comcast has raised basic cable rates in some markets by nearly 70 percent. Its top lobbyist has admitted that the price increases will continue to skyrocket if the merger goes through. And that's about the only thing Comcast has said about this deal that you should believe.

“The growing chorus of groups opposing this takeover knows the truth. The only rational choice is for the FCC and Justice Department to reject this merger."

 

Process Matters: Harold Feld's Guide to the Time Warner Cable/Comcast Merger

The proposed Comcast/Time Warner Cable deal will be on everyone's mind for many months to come. Thanks to Harold Feld, it is now possible to follow the process as it moves forward. Feld began a series of posts earlier this month that map out the review as it moves from the Department of Justice Antitrust Division to the Federal Communications, and finally to Congress. As Feld notes, the entire process will last six months at least and could run for more than a year. 

In addition to drawing a process map, Feld provides insightful subtleties on the purpose behind each step in the review. He also offers political analysis that may influence the outcome. Feld gets into the unique review process, burdens of proof, and relevant definitions at each stop along the way. Highly recommended, especially for law students.

Part I - Introduction

Part II - Antitrust Review at the DOJ

Part III - Federal Communications Commission analyzes public interest

Part IV - The proposal moves through the committee process and the public has a chance to express themselves to their elected officials (including lobbyists)

 

Lexingtonians Consider Municipal Network Options in Kentucky

Community leaders in Lexington are the latest to stand at a fork in the broadband road. In September, the franchise agreement between the Lexington-Fayette Urban County Government (LFUCG) and Time Warner Cable expired, resulting in a month-to-month agreement continuation. As they negotiate a new contract, local citizens have called for consideration of a municipal network.

When the contract was originally negotiated in the 1990s, the community was primarily interested in cable TV servce. As broadband has become critical infrastructure for residents, businesses, and government, the community's focus shifted. Lexington customers have complained repeatedly about Internet and cable TV service from Time Warner Cable. A February Kentucky.com article noted that local consumers complained over 300 times to Lexington's Urban County Government, the entity responsible for contract negotiations. According to the article:

The biggest single category of complaints was about price and the volatility of monthly rates. Other complaints were that the cable TV service "repeatedly fails, resets or freezes"; that there was an extended wait time and/or "unhelpful responses" in customer service; and that email and Internet "had declined in service" and showed "significantly slower service."

The City Council considered the situation bad enough to debate whether or not to appoint an ombudsman to advocate for Lexington consumers.

The community wonders how the proposed merger between Time Warner Cable and Comcast will impact their current service. While the Vice Mayor seems to think it is an "almost golden opportunity" to deal with a different provider, local citizen Roy M. Cornett has a different perspective. He wrote for Business Lexington.com:

We can choose to maintain the status quo and allow out-of-state corporations to continue to control our access to the Internet, or we can rescind the franchise agreements to the copper and fiber lying in the ground around our community and treat the Internet as the piece of infrastructure essential for our future economic growth that it is. 

We would just note that this is not an either/or proposition. They can both develop a new franchise or not separately from deciding to move forward with some smart municipal investments.

As the LFCUG has moved forward with franchise negotiations, they opened up the discussion at City Council meetings. Cornett attended a Cable Franchise Workshop to learn about the process. What he learned is that the LFCUG possesses very little power in negotiations, due to federal law. In fact, if Time Warner Cable meets a very low standard, the LFCUG has no option but to renew.

Lexington Kentucky Logo

Cornett and others in the community wonder if Lexington wants to go down the same Internet road again - expensive, unreliable, and ruled from a far off corner office. He addresses the question in another article on the Barefoot and Progressive site:

If the Time Warner [Cable] and Comcast merger goes through, Lexington will not only have piss poor download speeds, but caps on the amount of data you can use in a month. Comcast currently has a cap of 300 gigabytes per month for customers in Elizabethtown and Campbellsville, Kentucky. To put this in perspective, my family’s usage as of February 15, was 99 gigabytes for the month and we still have two weeks to go. I am terrified of what it will be in a few years when my youngest kids become teenagers. 

Cornett reached out to us when he wanted to learn more about the possibilities of a muni for Lexington:

The City of Chattanooga just recently built a municipal ISP to provide gigabit service to 147,000 homes at a cost of $330 million (of which $111 million was provided by the feds). Christopher Mitchell, the director of Telecommunications as Commons Initiative for the Institute for Local Self-Reliance, did some very rough back-of-the-envelope calculations for the City of Lexington and estimates that a full gigabit fiber network to every resident and business would be somewhere in the $200 million range. 

Those are huge numbers and should give anyone pause, but consider that we are spending $1.6 million on sidewalks for Tates Creek Road, $17 million for resurfacing a few blocks of South Limestone and $310 million dollars renovating Rupp Arena. Ask yourself if any of the above projects could come close to offering the economic impact that gigabit internet service would bring. It isn’t even close.

In his Business Lexington.com article, Cornett encourages a new coalition, the Bluegrass Economic Advancement Movement (BEAM), to take up the muni possibility. The group is a collaboration between Louisville and Lexington with support from the Brookings Institute. The goal of BEAM is to bring quality jobs to the Bluegrass and increase export activity.

Cornett, who we expect to hear more from, writes in his Barefoot and Progressive article:

I won’t speculate on the motives of the corporations for attempting to kill competition, but the issue of our city possessing a modern, reasonably priced, continually upgraded network is essential to our future.

This is not a fight we should shy away from. On the contrary, this is a fight we need to embrace, and it can be the lynchpin that takes the BEAM super region from a good idea to a shining success. I urge Mayors Gray and Fischer to – at the very least – explore the option of retaking control of this vital component of our infrastructure.

On the Media Talks Cable Consolidation, Municipal Networks With Crawford and Baller

The possible merger between Comcast and Time Warner Cable and the FCC's recent announcement to review state barriers have created a significant buzz in the world of telecommunications. Two recent NPR interviews with Susan Crawford and Jim Baller provide insight into how the merger may affect consumers and why a new light is shining on municipal networks.

Crawford spoke with Brooke Gladstone for a recent interview for On the Media. The two addressed some of the consequences of the potential merger. Crawford also discussed the option of municipal broadband investment is an alternative gaining traction. As our readers know, Crawford authored Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age. Crawford joined us in a past episode of the Communiy Broadband Bits podcast.

Jim Baller, President of the Baller Herbst Law Group, also joined On the Media when he spoke with Bob Garfield. Baller and Garfield talked about the cable and telecom lobby's efforts to block municipal authority to build networks. Baller supplied a few of the many examples of successful communities that have blossomed as a result of their investment. We have interviewed Baller three times for our podcast.

 

Each interview is a little over six minutes.

Krugman Calls out the Barons of Broadband

We should probably be thanking Comcast for its attempt to take over Time Warner Cable. It has inspired a shocking amount of vitriol against the cable monopolies, including an entertaining but NSFW video with strong language from Funny or Die.

Whereas people were largely content to mostly silently hate Comcast and Time Warner Cable separately, the idea of them officially tying the knot to screw consumers even more has apparently hit a tipping point. As I noted a few days ago, we are seeing a more communities considering their own networks to avoid being stuck with a Wall Street monopoly forever.

Paul Krugman was inspired to write "Barons of Broadband," which accurately reflects the modern dynamic:

The point is that Comcast perfectly fits the old notion of monopolists as robber barons, so-called by analogy with medieval warlords who perched in their castles overlooking the Rhine, extracting tolls from all who passed. The Time Warner deal would in effect let Comcast strengthen its fortifications, which has to be a bad idea.

Krugman talks about monopoly as well, reminding me of one of our most important podcasts - Barry Lynn, Monopoly Expert.

And the same phenomenon may be playing an important role in holding back the economy as a whole. One puzzle about recent U.S. experience has been the disconnect between profits and investment. Profits are at a record high as a share of G.D.P., yet corporations aren’t reinvesting their returns in their businesses. Instead, they’re buying back shares, or accumulating huge piles of cash. This is exactly what you’d expect to see if a lot of those record profits represent monopoly rents.

It’s time, in other words, to go back to worrying about monopoly power, which we should have been doing all along. And the first step on the road back from our grand detour on this issue is obvious: Say no to Comcast.

There is no public benefit to this merger - none. Meanwhile it will give even more power to a corporation already slowing our economy by refusing to invest in communities that desperately need better connections so businesses can remain competitive. Allowing this merger will be just another step in the direction of powerful corporate lobbyists officially running the country rather than unofficially.