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Comcast’s David Cohen Survives Night of the Long Knives Blame Game for Comcast Merger Failure

David "I'm crushing your head" Cohen

David “I’m crushing your head” Cohen

Your boss authorized $32 million on lobbying for a $45 billion dollar merger deal that just went down in flames on your watch and you were the guy the company depended on to push it through. What do you do?

If you are Comcast vice president David Cohen, you pray for a press release signed by the CEO reaffirming trust in you.

Cohen can breathe a little easier because Brian Roberts, CEO of Comcast, did exactly that.

“There is nobody better than David Cohen,” Roberts wrote. “He’s incredible at what he does and we are beyond lucky that he helps passionately lead so many areas at Comcast. He is also a huge supporter of Philadelphia and has done so much for the community. I’m extremely proud to have him on our team.”

It could have been much worse for Cohen, whose contract (and $15 million annual salary) is up at the end of this year. He’s the fourth biggest earner at Comcast, but his stunning arrogance before Congress and the public may have helped nail the coffin shut on a merger worth tens of billions.

Some media outlets have called Cohen myopic, unable to see the building torrent of opposition from consumers, public interest groups, and even regulators.

The NY Post:

“They just lost a big battle. Does the company need a new general to supervise the Washington political strategy?” asked one source.

Comcast is already on the hunt for a new chief financial officer, with Michael Angelakis walking away to begin his own Comcast-backed private-equity fund before the deal imploded.

comcast twcComcast’s claims of “deal benefits” for consumers was perceived to be tissue-thin by legislators like Rep. Tony Cárdenas (D-Calif.), whose district would have seen Time Warner and Charter customers absorbed into the Comcast Dominion.

“[Cohen] was smothering us with attention but he was not answering our questions,” Cárdenas told The New York Times, adding in the early stages of the deal he was open to supporting it if his questions were addressed satisfactorily. “And I could not help but think that this is a $140 billion company with 130 lobbyists — and they are using all of that to the best of their ability to get us to go along.”

Comcast’s swaggering arrogance, condescending editorials, and dismissive attitude towards consumers questioning the deal rubbed a lot of lawmakers the wrong way.

Not only did Comcast offend lawmakers, but their all-important staffers as well. Staffers told the newspaper they felt Comcast was so convinced in the early stages that the deal would be approved that it was dismissing concerns about the transaction, or simply taking the conversation in a different direction when asked about them.

Elected officials associating themselves with Comcast, whose customer service on a good day is considered miserable, was also considered political poison. Few lawmakers were willing to publicly support foisting Comcast on their constituents. Local lawmakers in Time Warner Cable service areas who had no direct experience with Comcast customer service’s special touch of hell often did offer support, especially when a handsome check was sent weeks earlier. But voters with relatives or friends who loathed Comcast (practically everyone in America) were never fooled.

hurricane comcast“They talked a lot about the benefits, and how much they were going to invest in Time Warner Cable and improve the service it provided,” said one senior Senate staff aide, who spoke on the condition of anonymity because he was not authorized to speak publicly. “But every time you talked about industry consolidation and the incentive they would have to leverage their market power to hurt competition, they gave us unsatisfactory answers.”

Politicians asked to publicly support the deal characterized their sentiment as “leery” in polite company.

Rep. Maxine Waters (D-Calif.) was unwilling to victimize her constituents by replacing two bad cable companies – Time Warner Cable and Charter with one horrible alternative – Comcast.

“No amount of public-interest commitments to diversity would remedy the consumer harm a merged Comcast-Time Warner would have caused to millions of Americans across the country,” Ms. Waters said.

Other lawmakers who already understood Comcast as the Hurricane Katrina of cable companies got into storm shelters early.

“There are limits as to how effective even the best advocate can be with a losing case,” said Senator Richard Blumenthal, Democrat of Connecticut, who was critical of the deal from the start, “as this merger would have further enhanced this company’s incentive, its means and its history of abuse of market power.”

Comcast even cynically attempted to color and race match lobbyists with legislators, believing the shared ethnic heritage would be an added incentive.

The New York Times:

Comcast, for example, assigned Juan Otero, a former Department of Homeland Security official who serves on the board of the Congressional Hispanic Caucus Institute and now works as a Comcast lobbyist, to be the point person to work with Mr. Cárdenas.

Meanwhile, Jennifer Stewart, an African-American lobbyist on the Congressional Black Caucus Institute board, was assigned to work with Marc Veasey, Democrat of Texas, who is also black. She personally appealed to Mr. Veasey’s staff, urging that he not sign a letter last August questioning the deal, according to an email obtained by The New York Times, citing the company’s work on behalf of the minority community. (Mr. Veasey still signed a related letter.)

Comcast also asked Jordan Goldstein, a former official at the Federal Communications Commission who is now a Comcast regulatory affairs executive, to work with Mr. Blumenthal’s office. Mr. Goldstein had previously developed a working relationship with Joel Kelsey, a legislative assistant in charge of reviewing the matter for the senator, who is a member of the Senate Commerce Committee.

Verizon Wireless to Customers Looking for a Better Deal: Goodbye and Good Luck With Competitors’ Inferior Service

Verizon Wireless: The Neiman Marcus of mobile providers

Verizon Wireless: The Neiman Marcus of mobile providers

A customer retention call with Verizon Wireless is short and to the point: enjoy the coverage you get from us now at the prices we charge or cancel and live with inferior cell phone service from one of our competitors.

Verizon chief financial officer Fran Shammo waved goodbye to 138,000 Verizon Wireless customers in the last three months and he could care less.

“If the customer who is just price-sensitive and does not care about the quality of the network—or is sufficient with just paying a lower price—that’s probably the customer we’re not going to be able to keep,” he said in the company’s quarterly earnings call today.

The wireless industry’s price war has not yet inflicted much damage on Verizon, which considers itself above the fray.

Average revenue per customer has started to significantly decline for the first time in wireless industry history, despite efforts to bolster earnings with expensive data plans and bundling services, including unlimited voice calling most cell phone users no longer care about. Both T-Mobile and Sprint are resorting to slashing prices and reducing the fine print to pick up business, with T-Mobile being the more successful of the two pulling it off. But the combined market share of Sprint and T-Mobile remains a fraction of what AT&T and Verizon Wireless have captured.

verizon greedVerizon believes it has a premium product and expects to be paid for it. Like a Neiman Marcus of the wireless industry, customers can expect a superior level of service, if they can afford to pay for it.

To keep customers dazzled, this summer Verizon Wireless is planning a new wireless video service featuring content from the NFL and likely more. Verizon hopes customers without unlimited data plans will be willing to pay several dollars extra for the new streaming service. But perhaps not too many extra dollars. Verizon executives have discovered a loophole in the FCC’s new Net Neutrality regulations allowing video content to be sponsored by Verizon or its advertising partners and exempt from usage allowances or caps.

Known as “zero-rating,” the practice is much more common overseas, where content providers pay for customer’s usage of their applications. Critics call the practice an end run around Net Neutrality. The FCC has continued to avoid the issue of broadband usage caps and usage-based billing, which ISPs have interpreted to mean a green light on the practice. In fact, some earlier comments from the FCC suggest the agency believes subsidized Internet traffic might be beneficial to consumers. Verizon pockets the money in either case.

Tim Berners-Lee, who created of the World Wide Web, called zero-rating “positive discrimination,” giving too much power to Internet providers.

“Zero-rated mobile traffic is blunt anti-competitive price discrimination designed to favor telcos’ own or their partners’ apps while placing competing apps at a disadvantage,” added Antonios Drossos, managing partner of Rewheel. “A zero-rated app is an offer consumers can’t refuse.”

Verizon Wireless has not yet priced its forthcoming video offering, but it could be marketed as a monthly add-on feature or as a pay-per-view option.

http://www.phillipdampier.com/video/Bloomberg Verizon Bids Good Riddance to Customers Leaving for a Cheaper Deal 4-21-15.flv

Bloomberg reporters talk about Verizon’s disinterest in competing with other carriers in the ongoing price war, and is fine with letting price-sensitive customers leave. It won’t be cutting prices anytime soon. (2:01)

Justice Department Nearing Decision to Block Comcast-Time Warner Cable Merger

Phillip Dampier April 17, 2015 Competition, Consumer News, Public Policy & Gov't 5 Comments

comcast twcStaff attorneys that have reviewed details of the Time Warner Cable/Comcast merger proposal are prepared to make a recommendation as early as next week that the Department of Justice should block the deal because it is anti-competitive and anti-consumer.

The staff in the Justice Department’s antitrust division have spent more than a year reviewing documents submitted by both cable companies to determine what impact the merger would have on the cable television and broadband landscape.

Bloomberg News today reported the attorneys did not like what they saw and believe the merger would harm consumers. For the first time, a cable company merger deal was reviewed not so much for its impact on cable television programming, but on broadband.

When the Federal Communications Commission redefined broadband as an Internet connection of at least 25Mbps, Comcast suddenly found itself the largest broadband provider in the country. If the merger with Time Warner Cable is approved, Comcast will have a 56.8 percent market share of U.S. broadband customers, far exceeding any other provider.

In upstate New York, Comcast would have more than a 75% market share — nearly 9o% if you just consider non-Verizon FiOS areas. In California, Comcast would control more than 80% of the market, not only picking up Time Warner Cable customers, but Charter customers in Southern California as well. 

Comcast and Time Warner Cable have argued competition is not affected because the two companies never compete with each other. But a de facto broadband monopoly could allow Comcast to raise rates at will and bring a return to usage-related billing. It would also discourage new competitors from entering the market – particularly those relying on broadband to deliver video services, and hand Comcast more leverage to force compensation from online content companies like Netflix.

justiceUnder consideration by the Justice Department:

  • Whether the combined entity would have too much control over nationwide broadband Internet delivery;
  • whether Comcast could use its financial influence to strike exclusive cable deals that could keep programming off other platforms;
  • whether Comcast could limit how programming is delivered through video streaming services (usage caps, etc.);
  • if Comcast complied with terms under a previous merger deal with NBCUniversal.

Renata Hesse, a deputy assistant attorney general for antitrust, will take the analysis and ultimately decide, along with the division’s top officials, whether to file a federal lawsuit to block the deal. Bloomberg reports lawyers at the Justice Department have contacted outside parties to collect evidence to strengthen their potential case against the merger.

Another clear sign the merger is not being received well inside the Justice Department and the Federal Communications Commission is a complete lack of negotiations with Comcast over possible concessions to make the deal less anti-competitive. That also happened with the AT&T/T-Mobile merger where negotiations to ease anticompetitive concerns never seriously got off the ground before the Justice Department sued to block the deal. The FCC quickly announced its own opposition later that same day.

A lawsuit does not necessarily kill the merger deal. Comcast could take its case to federal court to win approval over the objections of the Justice Department. The company might also counter-propose new concessions to address concerns raised by the lawsuit. 

After learning of today’s Bloomberg News story, spokespeople at both Comcast and Time Warner Cable are either confident or in denial:

“There is no basis for a lawsuit to block the transaction,” said Sena Fitzmaurice, a Comcast spokeswoman. The merger “will result in significant consumer benefits — faster broadband speeds, access to a superior video experience, and more competition in business services resulting in billions of dollars of cost savings.”

Time Warner Cable spokesman Bobby Amirshahi said “we have been working productively with both DOJ and FCC and believe that there is no basis for DOJ to block the deal.”

FCC Plans to Unveil New Rules to Regulate Broadband Service as a Public Utility; Net Neutrality Included

Phillip Dampier February 3, 2015 Net Neutrality, Public Policy & Gov't No Comments

netneutralityIn a major victory for consumers and public interest groups, the Federal Communications Commission this week will unveil fundamental changes in the oversight of high-speed Internet service, regulating it in the public interest as a public utility.

According to a report in the Wall Street Journal, FCC chairman Thomas Wheeler plans to include robust Net Neutrality protection in the proposal, insisting the agency has a right to oversee providers’ traffic management practices when they impact customers.

Central to the proposal is redefining broadband away from the current, barely regulated “information service” category that has allowed telecom companies to successfully challenge the FCC in court on almost every attempt to oversee broadband Internet service. Wheeler’s plan is expected to reclassify broadband as a “telecommunications service,” which will subject providers to more regulator scrutiny.

The FCC is expected to specifically prohibit providers from blocking, slowing down, or speeding up individual websites in return for financial compensation. The ban on “Internet fast lanes” and “toll booths” will protect Internet startups that would otherwise face an immediate disadvantage from well-heeled competitors that can afford to pay for enhanced access to customers.

But despite claims from Net Neutrality opponents, Wheeler is not expected to impose a one-size-fits-all regulatory regime over broadband. Instead, he prefers to reserve regulatory powers to police individual disputes such as those between Netflix, Comcast, Verizon and other providers which caused traffic slowdowns for consumers in 2014 until paid peering agreements were finalized, compensating ISPs for handling Netflix streaming video content.

Providers fear that reclassifying broadband under Title II rules could subject them to future oversight of practices like usage-based billing, usage caps, speed throttling, broadband pricing and availability. But the Obama Administration is on record opposing price regulation of broadband, and few expect the FCC will adopt a micromanagement approach to broadband oversight.

Wheeler’s proposal is likely to win a majority vote from the three Democratic commissioners. Opposition is a virtual certainty from the Republican minority.

The telecom industry promises whatever rules are adopted will face an immediate challenge in court.

Cable Lobby Forgot to Mention It’s the Sole Backer of Sock Puppet Group ‘Onward Internet’

onward-internetWith millions at stake charging content producers extra for guaranteed fast lanes on the Internet, some lobbyists will go to almost any length to throw up roadblocks in opposition to Net Neutrality.

The sudden appearance of Onward Internet, a group that erects enormous “Internet suggestion boxes” at busy intersections in New York and San Francisco is a case in point.

At least a half-dozen 20-somethings, some dressed for a science fiction convention, staff the displays while encouraging people to write and toss in their own ideas about what they expect from the Internet over the next decade.

A higher bill and usage caps, unsurprisingly, were not among the suggestions. But it is doubtful the mysterious people behind Onward Internet are interested in hearing that.

Advocacy group ProPublica spent weeks trying to find who was paying for the youthful exuberance, giant black boxes, and hopelessly optimistic YouTube videos telling viewers the Internet was made to move data, and how amazing it was your Internet Service Providers valiantly kept up with the demand, helped connect industries and even topple dictatorships. Well, not corporate dictatorships in this country anyway.

With that kind of “feel good” message, ProPublica undoubtedly smelled industry money, especially after seeing lines like, “The Internet is a wild, free thing; unbounded by limits, unfettered by rules, it’s everyone’s responsibility to ensure that the Internet continues to advance.” But it took a leak from a worker hired to file permits and buy space in San Francisco for the street displays to finally blow the whistle.

Onward Internet = the National Cable and Telecommunications Association, America’s largest cable industry lobbyist.

This appears to be a repurposed dumpster.

This appears to be a repurposed dumpster.

You couldn’t find a bigger critic of Net Neutrality if you tried.

The NCTA played coy with ProPublica when the group first confronted the cable lobby with the evidence.

“What led you to the conclusion that this is an NCTA effort,” asked NCTA spokesman Brian Dietz.

Busted, Dietz followed up with a statement suggesting the NCTA needed to keep its involvement top-secret because it might ‘bias’ the feedback they received:

“We’ve kept NCTA’s brand off Onward Internet because we want to collect unbiased feedback directly from individuals about what they want for the future of the Internet and how it can become even better than it is today,” Dietz told ProPublica. “The cable industry is proud of our role as a leading Internet provider in the U.S. but we feel it’s important to hear directly from consumers about how they envision the future so we can work hard on delivering it.”

“We had always intended to put the NCTA brand on it but we wanted to collect as much unbiased feedback as we could for a few weeks before putting our name on it,” Dietz later told VentureBeat.

The NCTA is hoping unwitting consumers submit comments they can use to oppose Net Neutrality and Title 2 reclassification of broadband as a “telecommunications service.”

Because if that happens, the Money Party may end before it even begins.

The NCTA’s astroturf effort is nothing new. A panoply of well-funded, telecom-industry backed sock puppet groups muddy the waters on these issues everyday, from Broadband for America to various think tanks and bought and paid for researchers.

http://www.phillipdampier.com/video/Onward Internet Decide the future of the Internet 10-8-14.mp4

Onward Internet is hoping you will share comments they can use to prove you oppose Net Neutrality. The NCTA is a strong opponent of Net Neutrality, which allows LOLCATS, movies, and dictatorship toppling to occur without paying even MORE money to the cable company for a fast lane that should have been fast in the first place, considering how much we are spending on it. Now Big Cable also want usage caps and allowances. The revolution has been capped. (1:22)

5+ Years After Fraudulent Cramming Fees Began, AT&T Agrees to Pay $105 Million Fine/Restitution

AT&T aids and abets cramming fraud by making it hard to identify on customer bills.

AT&T aids and abets cramming fraud by making it hard to find on customer bills.

More than five years after complaints began rolling into AT&T from wireless customers finding unauthorized charges on their monthly bills, the Federal Trade Commission and Federal Communications Commission today announced those customers deserve a refund, and AT&T has agreed to pay $80 million towards restitution for their complicity in bill cramming.

As part of a $105 million settlement with federal and state law enforcement officials, AT&T Mobility LLC will pay $80 million to the Federal Trade Commission to provide refunds to consumers the company unlawfully billed for unauthorized third-party charges, a practice known as mobile cramming. The refunds are part of a multi-agency settlement that also includes $20 million in penalties and fees paid to 50 states and the District of Columbia, as well as a $5 million penalty to the Federal Communications Commission.

In its complaint against AT&T, the FTC alleges that AT&T billed its customers for hundreds of millions of dollars in charges originated by other companies, usually in amounts of $9.99 per month, for subscriptions for ringtones and text messages containing love tips, horoscopes, and “fun facts.” In its complaint, the FTC alleges that AT&T kept at least 35 percent of the charges it imposed on its customers, a lucrative incentive for AT&T to keep the cramming charges coming.

“I am very pleased that this settlement will put tens of millions of dollars back in the pockets of consumers harmed by AT&T’s cramming of its mobile customers,” said FTC chairwoman Edith Ramirez. “This case underscores the important fact that basic consumer protections – including that consumers should not be billed for charges they did not authorize – are fully applicable in the mobile environment.”

Beginning today, consumers who believe they were charged by AT&T without their authorization can visit www.ftc.gov/att to submit a refund claim and find out more about the FTC’s refund program under the settlement. If consumers are unsure about whether they are eligible for a refund, they can visit the claims website or contact the settlement administrator at 1-877-819-9692 for more information.

This case is part of a larger FTC effort to clamp down on mobile cramming. This is the FTC’s seventh mobile cramming case since 2013, and its second against a mobile phone carrier this year. The FTC filed a complaint against T-Mobile in July, and that case is ongoing. The Commission also issued a staff report on mobile cramming in July. The FTC mobile cramming cases build on the FTC’s extensive law enforcement work over the last decade to combat cramming on landline phone bills.

The FTC’s investigation into AT&T showed that the company received very high volumes of consumer complaints related to the unauthorized third-party charges placed on consumer’s phone bills. For some third-party content providers, complaints reached as high as 40 percent of subscriptions charged to AT&T consumers in a given month. In 2011 alone, the FTC’s complaint states, AT&T received more than 1.3 million calls to its customer service department about the charges.

According to the complaint, in October 2011, AT&T altered its refund policy so that customer service representatives could only offer to refund two months’ worth of charges to consumers who sought a refund, no matter how long the company had been billing customers for the unauthorized charges. Prior to that time, AT&T had offered refunds of up to three months’ worth of charges. At that time, AT&T characterized its change in policy as designed to “help lower refunds.”

In February 2012, one AT&T employee said in an e-mail that “Cramming/Spamming has increased to a new level that cannot be tolerated from an AT&T or industry perspective,” but according to the complaint, the company did not act to determine whether third parties had in fact gotten authorization from consumers for the charges placed on their bills. In fact, the company denied refunds to many consumers, and in other cases referred the consumers to third-parties to seek refunds for the money consumers paid to AT&T.

The structure of AT&T’s consumer bills compounded the problem of the unauthorized charges, according to the complaint, by making it very difficult for customers to know that third-party charges were being placed on their bills. On both the first page of printed bills and the summary of bills viewed online, consumers saw only a total amount due and due date with no indication the amount included charges placed on their bill by a third party. The complaint alleges that within online and printed bills, the fees were listed as “AT&T Monthly Subscriptions,” leaving consumers to believe the charges were part of services provided by AT&T.

Under the terms of its settlement with the FTC, AT&T must notify all of its current customers who were billed for unauthorized third-party charges of the settlement and the refund program by text message, e-mail, paper bill insert and notification on an online bill. Former customers may be contacted by the FTC’s refund administrator.

In addition to the refund requirements, AT&T is also required to obtain consumers’ express, informed consent before placing any third-party charges on a consumer’s mobile phone bill. In addition, the company must clearly indicate any third-party charges on the consumers’ bill and provide consumers with the option to block third-party charges from being placed on their bill.

The Commission vote authorizing the staff to file the complaint and approving the proposed stipulated order was 5-0. The FTC filed the complaint and proposed stipulated order in the U.S. District Court for the Northern District of Georgia. The proposed stipulated order is subject to court approval.

Comcast’s Reputation for Bad Customer Service is Legendary and Never-Ending

psctest

Comcast has repeatedly touted its rating from J.D. Power & Associates claiming the company has been cited for the most improvement of any cable operator scored by the survey firm. That isn’t saying very much when one takes a closer look.

comcast-time-warner-cable-mergerIn fact, since 2010 Comcast has achieved very little improvement in its abysmal score. J.D. Power & Associates reports that over the last four years, Comcast has only managed to boost its TV satisfaction score 92 points and Internet satisfaction 77 points… on a 1,000-point scale.[1]

Comcast also continues to have below-average scores in all four regions for both television and broadband, with the exception of Internet service in the north-central region, where it faces competition from DSL offered by telephone company CenturyLink.

Other consumer satisfaction surveys are far less charitable to Comcast.

Consumer Reports ranked Comcast 15th out of 17 large cable companies and called their service and customer relations mediocre. In a survey conducted in April, the consumer group found 56% of the public opposed to the merger, 11% supported it, and 32% offered no opinion. The survey found 74% believing the merger will result in higher prices and fewer choices for consumers.[2]

“A merger combining these two huge companies would give Comcast even greater control over the cable and broadband Internet markets, leading to higher prices, fewer choices, and worse customer service for consumers,” Delara Derakhshani, policy counsel in Consumers Union’s D.C. office, said in a statement.[3]

Nearly every year, Comcast CEO Brian Roberts acknowledges the problems with customer service and promises improvements.[4] But according to the American Consumer Satisfaction Index, those improvements never arrive.

In 2004, ACSI noted it added cable television to its index in 2000, and since that time, “customer satisfaction has gone from bad to worse, and there is no improvement in sight:”[5]

ows_139276912850214Among cable providers, Time Warner has the highest score of 60. Both Comcast and Charter Communications register at 56. For the private as well as public sector, including the IRS, this is the lowest level of customer satisfaction of any organization in ACSI. Consumer complaints are also much more common relative to any other measured industry. Almost half of all cable customers have registered complaints about one thing or another.

When buyers have meaningful choice alternatives, this level of customer (dis)satisfaction is neither competitive nor sustainable. Cable is the only industry to score below 60 in ACSI. With the satellite companies removed, the weighted average for the cable industry is 59.

Under normal competitive conditions, there would be mass customer defections. The reason this is not the case for the cable industry is due to local monopoly power, which means that in most markets, the dissatisfied customer has nowhere to go.

In 2007, ACSI foreshadows what a merger between two giant cable companies is likely to mean for customers as the two companies eventually attempt to integrate their disparate computer systems and management:[6]

After a minor gain in 2006, the first ever for the industry, satisfaction among subscribers to cable and satellite TV service drops 2% to 62, the lowest level of customer satisfaction among all industries covered by ACSI.  None of the providers has improved on customer satisfaction this year.  Comcast (down 7% to 56), DirecTV (down 6% to 67) and Time Warner Cable (down 5% to 58) tumble.  High system loads causing problems with reliability and pricing were major culprits.  Both Comcast and Time Warner have acquired many new subscribers in their deal to divide up troubled cable provider Adelphia Communications – integrating these acquisitions often leads to short-term problems with customer satisfaction.

Comcast MergerIn 2008, things deteriorated further for Comcast customers, according to this ACSI assessment:[7]

Comcast is down 4% to 54, an all-time low for the largest cable provider in the country. Rapid growth may have contributed to difficulties in operations as Comcast continues to add cable subscribers, often through acquisitions of companies in smaller markets.

[…] As is often the case, small is often better in terms of being able to provide good customer service. Cablevision, for example, with some 3 million subscribers, is barely 1/8th the size of Comcast. These companies don’t generally seek to expand quickly beyond their geographic footprints and are often targets of acquisition by larger firms, companies that may be able to withstand depressed customer satisfaction in the short term as operations of the smaller providers are integrated.

This year, both Comcast and Time Warner Cable fell even further according to ACSI:[8]

Cable giants Comcast and Time Warner Cable have the most dissatisfied customers. Comcast falls 5% to 60, while Time Warner registers the biggest loss and plunges 7% to 56, its lowest score to date.

“Comcast and Time Warner assert their proposed merger will not reduce competition because there is little overlap in their service territories,” says David VanAmburg, ACSI Director. “Still, it’s a concern whenever two poor-performing service providers combine operations. ACSI data consistently show that mergers in service industries usually result in lower customer satisfaction, at least in the short term. It’s hard to see how combining two negatives will be a positive for consumers.”

ACSI also scored Internet Service Providers this year and found even worse news:[9]

High prices, slow data transmission and unreliable service drag satisfaction to record lows, as customers have few  alternatives beyond the largest Internet service providers. Customer satisfaction with ISPs drops 3.1% to 63, the lowest score in the Index.

[…] Cable-company-controlled ISPs languish at the bottom of the rankings again. Cox Communications is the best of these and stays above the industry average despite a 6% fall to 64. Customers rate Comcast (-8% to 57) and Time Warner Cable (-14% to 54) even lower for Internet service than for their TV service. In both industries, the two providers have the weakest customer satisfaction.

Comcast claims the transaction will allow the two companies to invest in their networks, improve customer service, and enhance the products available to Time Warner Cable customers.

In reality, Comcast’s largest investment will be in a $17 billion share buyback to benefit their stockholders.[10] Time Warner Cable’s current CEO has secured for himself a golden parachute package of $78 million dollars for just two months on the job as CEO of Time Warner Cable.[11]

With that kind of money on the table, it is no surprise Comcast has invested in 76 lobbyists from 24 different lobbying firms and is spending millions trying to convince regulators, including the NY PSC that this transaction is a good deal for New York. The more than 2,700 New Yorkers that have filed comments with the PSC, largely in strong opposition to this merger, disagree. Their voices should speak louder than out of state groups that have been urged by Comcast to send letters supporting this transaction.

[1]http://variety.com/2014/biz/news/comcast-time-warner-cable-remain-among-most-hated-tv-providers-survey-1201145921/
[2]http://variety.com/2014/biz/news/comcast-time-warner-cable-merger-poll-shows-majority-oppose-1201224277/
[3]http://cuactionfund.org/get-the-facts
[4]http://www.dslreports.com/shownews/Comcast-CEO-Makes-His-Yearly-Promise-to-Improve-Customer-Service-128206
[5]http://www.theacsi.org/component/content/article/30-commentary-category/86-acsi-quarterly-commentaries-q1-2004
[6]http://www.theacsi.org/component/content/article/30-commentary-category/169-acsi-quarterly-commentaries-q1-2007
[7]http://www.theacsi.org/component/content/article/30-commentary-category/179-acsi-quarterly-commentaries-q1-2008
[8]http://www.theacsi.org/news-and-resources/press-releases/press-2014/press-release-telecommunications-and-information-2014
[9]http://www.theacsi.org/news-and-resources/press-releases/press-2014/press-release-telecommunications-and-information-2014
[10]http://www.cleveland.com/business/index.ssf/2014/02/comcast_agrees_to_purchase_of.html
[11]http://www.usatoday.com/story/money/business/2014/03/20/four-months-as-time-warner-cables-ceo--80-million/6658083/

New York Public Service Commission Announces Delay in Comcast/TWC Merger Consideration

comcast twcAs more than 2,300 New Yorkers express fierce opposition to the merger of Comcast and Time Warner Cable, the New York Public Service Commission has announced a delay in the review of the proposal until October.

The PSC now expects to consider the matter at a meeting to be held October 2. The PSC is also extending the period for the public to comment on the proposed merger.

Your comments are now due no later than Aug. 8, with reply comments from various parties due no later than Aug. 25.

Your input is vital, so please take a few moments to send an e-mail to the PSC with your views.

Here’s an example of one of the letters we are seeing:

Via e-mail: [email protected]
Honorable Kathleen H. Burgess, Secretary
New York State Public Service Commission
Three Empire State Plaza
Albany, NY 12223

Re: 14-M-0183 – Joint Petition of Time Warner Cable and Comcast for Approval of a Holding Company Level Transfer of Control

Dear Secretary Burgess:

As a resident of this state, who is a customer of Time Warner Cable, I am writing to express my staunch opposition to the above-referenced joint petition. This application should be denied outright, simply put, because the merger of Comcast, the nation’s largest cable company, and Time Warner Cable, the nation’s second largest company, would be contrary to the interest of consumers in the State of New York, as well as antitrust laws.

Though executives of both applicants are adamant that this proposed merger would benefit consumers and enhance competition, the ominous, far-reaching implications that will undoubtedly follow render these claims, among others, implausible. That is, if this merger were to take place, a virtual monopoly would be created, giving Comcast unprecedented control over cable and broadband internet networks at the expense of not only consumers, who would receive nothing but fewer choices at higher prices, but also rival businesses, whose viability would certainly be stifled. The proposed merger would likewise pose a threat to net neutrality.

Given the abysmal record of Comcast, which includes being fined for failing to comply with the terms and conditions of its previous and similarly controversial merger with NBC Universal, as well as its political clout, it is clear that the approval of this joint petition would both be inconsistent with the mission of this Commission, as as well as the interest of consumers in this state. It should, accordingly, be denied in its entirety.

Respectfully submitted,
Patrick A. Berry
Volunteer, Common Cause New York

I Love You Comcast! An Amazing 180 for Former Antitrust Attorney David Balto

Phillip "I got whiplash just watching" Dampier

Phillip “I got whiplash just watching” Dampier

A former policy director at the Federal Trade Commission and antitrust attorney at the U.S. Justice Department has managed an impressive 180 in just a few short months regarding the merger of Time Warner Cable and Comcast.

In February, David Balto told TheDeal the proposed takeover of Time Warner Cable “is a bad deal for consumers.” Today, Mr. Balto’s panoply of guest editorials, media appearances and columns — suddenly in favor of the merger — are turning up in the New York Times, the Orlando Sentinel, Marketplace, WNYC Radio, and elsewhere.

Balto’s arguments are based on “research” which, in toto, appears to have been limited to thumbing through Comcast’s press releases and merger presentation. That was enough:

First, this deal should create benefits for Time Warner customers, who will gain a significantly faster Internet and more advanced television service.

Second, competition is increasing in both the pay-TV and broadband businesses. Ninety-eight percent of viewers have a choice of three or more multichannel services, plus growing options online. Yahoo just announced a new video service, joining Netflix, Amazon and YouTube. In the last five years, cable has lost about seven million customers, satellite has gained nearly two million, and the telecommunications companies have gained six million.

Third, Comcast’s post-merger share of broadband falls closer to 20 percent when including LTE wireless and satellite providers. Over all, 97 percent of households have at least two competing fixed broadband providers — three or more if mobile wireless is included.

We used to wonder why government officials and regulators were so easily fooled by the corporate government relations people sent into their offices armed with press releases, talking points, cupcakes, and empty promises. We understand everyone isn’t a Big Telecom expert, but too often regulators’ reflexive acceptance of whatever companies bring to their table threatens to win them rube-status. We’d like to think Mr. Balto isn’t Comcast’s sucker, and we certainly hope there are no unspoken incentives on the table in return for his recent, very sudden conversion to celebrate all-things Comcast. Maybe he’s simply uninformed.

Balto

Balto

Although our regular readers — nearly all consumers and customers — are well-equipped to debunk Mr. Balto’s arguments, for the benefit of visitors, here is our own research.

First, Comcast’s Internet service is not faster than Time Warner Cable. Mr. Balto needs to spend some time away from Comcast’s merger info-pack and do some real research. He’ll find Time Warner Cable embarked on a massive upgrade program called TWC Maxx that is more than tripling broadband speeds for customers at no extra charge. Those speeds are faster than what Comcast offers the average residential customer, and come much cheaper as well. Oh, and TWC has no compulsory usage limits and overlimit penalties. Comcast’s David Cohen predicts every Comcast customer will face both within five years.

Second, that “advanced TV platform” Balto raves about requires a $99 installation fee… for an X1 set-top box. It also means equipment must be attached to every television in the house, because Comcast encrypts everything. At a time when customers want to pay for fewer channels, Comcast wants to shovel even more unwanted programming and boxes at customers. Older Americans who want their Turner Classic Movies have another nasty surprise. They will need to buy Comcast’s super deluxe cable TV package to get that network, at a cost exceeding $80 a month just for television. Ask Time Warner customers what they want, and they’ll tell you they’d prefer old and decrepit over an even higher cable TV bill Comcast has already committed to deliver.

Has competition truly increased? Not in the eyes of most Americans who at best face a duopoly and annual rate hikes well in excess of inflation. Even worse, for most consumers there is only one choice for 21st century High Speed Internet service – the cable company. Mr. Balto conveniently ignores the fact cable’s primary competitor is still DSL which is simply not available at speeds of 30+Mbps for most consumers. In some areas, like suburban Rochester, N.Y., the best the local phone company can deliver some neighborhoods like ours is 3.1Mbps. That isn’t competition. Verizon and AT&T have both stopped expanding DSL. Verizon has ended FiOS expansion and AT&T’s U-verse still maxes out at around 24Mbps for most customers. AT&T’s promised fiber upgrades have proven to be more illusory than reality, available primarily in a handful of multi-dwelling units and new housing developments. In rural areas, both major phone companies are petitioning to do away with landline service and DSL altogether.

Raise your hands if you want Comcast’s “benefits.” In New York, out of 2,300 comments before the PSC, we can’t find a single one clamoring for Comcast’s takeover. The public has spoken.

Cable "competition" in Minneapolis

Cable “competition” in Minneapolis. Charter and Comcast have also teamed up to trade cable territories as part of the Time Warner Cable merger package deal.

Satellite television’s days of providing the cable industry with robust competition have long since peaked. AT&T is seeking to further reduce that competition by purchasing DirecTV, not because it believes in satellite television, but because it wants the benefits of DirecTV’s lucrative volume discounts.

Any antitrust attorney worth his salt should be well aware of what kind of impact volume discounting can have on restraining and discouraging competition. Comcast’s deal for Time Warner will let it acquire programming at a substantial discount (one they have already said won’t be passed on to customers) so significant that any would-be competitors would be in immediate financial peril trying to compete on price.

Frontier Communications learned that lesson when it acquired a handful of Verizon FiOS franchises in Indiana and the Pacific Northwest. After losing Verizon’s volume discounts, Frontier was so alarmed by the wholesale renewal rates it received, it let loose its telemarketing force to convince customers fiber was no good for television and they should instead switch to a satellite provider they partnered with. It’s telling when a company is willing to forfeit revenue in favor of a third party marketing agreement with an outside company.

So what does this mean for a potential start-up looking to get into the business? Since programming is now a commodity, most customers buy on price. The best triple-play deals will go to the biggest national players with volume discounts – all cable operators that have long agreed never to compete directly with each other.

In the Orlando Sentinel, Mr. Balto seemed almost relieved when he concluded Comcast and Time Warner don’t compete head-to-head, somehow easing any antitrust concerns. It is precisely that fact why this deal must never be approved. Comcast has been free to compete anywhere Time Warner provides service, but has never done so. Letting Comcast, which has even worse approval ratings than Time Warner, become the only choice for cable broadband is hardly in the public interest and does nothing for competition. Instead, it only further consolidates the marketplace into a handful of giant companies that can raise prices and cap usage without restraint.

If Mr. Balto truly believes AT&T and Verizon will ride to the rescue with robust wireless broadband competition, his credibility is in peril. Those two companies, among others, are completely incapable of meeting the growing broadband demands (20-50GB) of the home user. With punishing high prices and staggeringly low usage caps, providers are both controlling demand and profiting handsomely from rationing service at the same time. Why change that?

No 3G/4G network under current ordinary traffic loads can honestly deliver a better online experience than DSL, and customers who attempt to replace their home broadband connection in favor of wireless will likely receive a punishing bill for the attempt at the end of the month. The only players who want to count mobile broadband as a serious competitor in the home broadband market are the cable and phone companies desperately looking for a defense against charges they have a broadband monopoly or are part of a comfortable duopoly.

One last point, while Mr. Balto seems impressed that Comcast would continue to voluntarily abide by the Net Neutrality policies he personally opposes, he conveniently omits the fact Comcast was the country’s biggest violator of Net Neutrality when it speed limited peer-to-peer traffic, successfully sued the government over Net Neutrality after it was fined by the FCC for the aforementioned violation, and only agreed to temporarily observe Net Neutrality as part of its colossal merger deal with NBCUniversal. It’s akin to a mugger promising to never commit another crime after being caught red-handed stealing. A commitment like that might be good enough for Mr. Balto, but it isn’t for us.

Antitrust Us: Is ComVerizablAsT&TWCDirecTV Really Best for American Broadband?

Bad enough

Bad enough

A big company needs a big name, and so what if you can’t say it out loud, so long as your check reaches the cable cartel on time to avoid those inconvenient late fees.

The shock waves of the $45 billion dollar proposed merger of Comcast and Time Warner Cable (not to mention AT&T and DirecTV) have reached as far as Great Britain where appalled editorial writers in the British press are pondering whether Washington has lost its mind or just its integrity… or a combination of both, by actually contemplating the unthinkable rebirth of the American Robber Baron.

Only instead of railroads powering America’s early 20th century economy, today its broadband. Overseas, broadband is plentiful, fast, and cheap. Back home, cable operators are hard at work in a comfortable monopoly/duopoly working on excuses to justify Internet rationing with usage caps, outrageous equipment rental fees, rate hikes, and usage billing for a product about as cheap to offer as a phone call on one of those unlimited calling plans you probably already have.

From The Economist:

“On “OUTLAW”, a drama that aired on NBC, a Supreme Court justice leaves the bench to join a law firm. In real life he might have begun working for Comcast, America’s largest cable company, which owns NBC. Many of Washington’s top brass are on Comcast’s payroll, including Margaret Attwell Baker, a former commissioner of the Federal Communications Commission (FCC), America’s telecoms regulator, who in government had helped approve Comcast’s takeover of NBCUniversal in 2011. Even Barack Obama has Comcast ties. “I have been here so much, the only thing I haven’t done in this house is have seder dinner,” he quipped at a fundraiser hosted last year at the home of David Cohen, Comcast’s chief lobbyist.

“It helps to have influential friends, especially if you are seeking to expand your grip on America’s pay-TV and broadband markets.

“[…] The deal would create a Goliath far more fearsome than the latest ride at the Universal Studios theme park (also Comcast-owned). Comcast has said it would forfeit 3m subscribers, but even with that concession the combination of the two firms would have around 30m—more than 30% of all TV subscribers and around 33% of broadband customers. In the cable market alone (ie, not counting suppliers of satellite services such as DirecTV), Comcast has as much as 55% of all TV and broadband subscribers.

Worse

Worse

“Comcast will argue that its share of customers in any individual market is not increasing. That is true only because cable companies decided years ago not to compete head-to-head, and divided the country among themselves. More than three-quarters of households have no choice other than their local cable monopoly for high-speed, high-capacity internet.

“For consumers the deal would mean the union of two companies that are already reviled for their poor customer service and high prices. Greater size will fix neither problem. Mr Cohen has said, “We’re certainly not promising that customer bills are going to go down or even that they’re going to increase less rapidly.” Between 1995 and 2012 the average price of a cable subscription increased at a compound annual rate of more than 6%.”

Before blaming it all on President Obama’s close relationship with Comcast’s top executives, it was the Republicans in Washington that set this tragic monopolistic farce into motion. Michael Powell, President George W. Bush’s idea of the best man in America to protect the public interest at the FCC, represented the American people about as well as ‘Heckuva Job Brownie.’ Instead of promoting competition, Powell used his time to beef-up his résumé for a very cushy post-government job heading America’s top cable lobby – the National Cable & Telecommunications Association. Attwell-Baker was even more shameless, departing the FCC for her sweet new executive digs at Comcast just a short time after enthusiastically voting in favor of its NBCUniversal merger deal.

snakePowell and others made certain that Internet Service Providers would not be classified as “common carriers,” which would require them to rent their broadband pipes at a reasonable wholesale rate to competitors. The industry and their well-compensated friends in the House and Senate argued such a status would destroy investment in broadband expansion and innovation. Instead it destroyed the family budget as prices for mediocre service in uncompetitive markets soared. Today, consumers in common carrier countries including France and Britain pay a fraction of what Americans do for Internet access, and get faster speeds as well.

Letting Comcast grow even larger, The Economist argues, will allow one company to dominate not just your Internet experience, but also the content consumers access and at what speed.

“There is plenty for Mr Obama and Mr Cohen to discuss at their next dinner,” concludes the magazine. “But better yet, officials could keep their distance from Comcast, and reject a merger that would reduce competition, provide no benefit to consumers and sap the incentive to innovate.”

Considering the enormous sums of money Comcast has shown a willingness to spend on winning over supporters for its business agenda, restraint on the part of Washington will need voter vigilance, much the same way calling out non-profits who gush over Comcast while quietly cashing their contribution checks must also be fully exposed to regulators who will ultimately decide the fate of the merger.

http://www.phillipdampier.com/video/Antitrust Us.mp4

Antitrust Us: Cartoonist Mark Fiore takes on the corporate idea that merging cable companies together creates more competition. (1:50)

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