Home » New York » Recent Articles:

Stop the Cap! Files Testimony in Opposition to Comcast-Time Warner Cable Merger With FCC

Stop the Cap! completed and today filed a formal submission with the Federal Communications Commission opposing the merger of Time Warner Cable and Comcast.

We joined tens of thousands of filers — mostly consumers — strongly opposed to the merger on the grounds it is not in the public interest.

Earlier today, Consumers Union filed its petition with more than 20,000 signatures of ordinary Americans across the United States who want nothing to do with Comcast.

Back here in New York, Comcast this afternoon filed a response with the Public Service Commission regarding our (and other) submissions opposed to the merger. We will be analyzing and rebutting their response straight away. Comcast went all-out name-dropping people and groups (many with direct, usually undisclosed financial ties to Comcast) to sell New York regulators the theory ‘the groups and people who matter’ are in favor of their merger while those opposed are mostly out-of-state rabble or unsubstantial individuals of few words.

“Given these many concrete benefits, and the lack of any harm to competition or consumers, it should come as no surprise that the overwhelming majority of the substantive comments (approximately 110 out of a total of about 140 substantive comments) filed in this proceeding support Commission approval of the transaction,” writes Comcast.

Comcast did not share their subjective standard of what constitutes “substantive” but a quick review of the groups cited in Comcast’s response show some substantive was involved – a check from Comcast either recently or in the past. Our view is that it doesn’t take more than a sentence to express extreme displeasure about Comcast taking over Time Warner Cable, and those views should matter just as much as a virtual Hallmark card from a group or politician that used a Comcast-provided “template” with a detachable check at the bottom.

Our favorite was Comcast’s highly defensive ‘hey New York PSC, it’s none of your business that Comcast is testing usage caps and you cannot use it against us':

The Writers Guild of America, West, Inc. (“WGAW”), Zephyr Teachout and Tim Wu, and Stop the Cap! argue that Comcast will extend data caps and usage-based pricing to New York to impose restraints on online content and drive up consumer costs.

This broadband-related claim is irrelevant to this proceeding and beyond the Commission’s jurisdiction. Indeed, the FCC expressly approved of usage-based billing in its 2010 Open Internet Order and is again examining the issue in the pending Open Internet rulemaking.

In other words, whether data caps are appropriate is a matter of federal regulatory concern, not one that relates to this proceeding or that is even transaction specific (since nothing precludes TWC from adopting caps at any time, as it has in the past).

So regardless of whether data caps are in the public interest or not, New York should not be allowed to weigh in because former FCC chairman Julius Genachowski said usage based billing could be an innovative way to bill for broadband.

In reality, New York can decide for itself what is in the best interests of its residents, and Time Warner Cable determined what was best after a two-week firestorm in 2009 that taught them compulsory usage caps were a really bad idea. But Comcast isn’t terribly interested in the views of the unsubstantive masses — which is comparable to their attitude toward customers, so no change there. It’s just a free preview weekend of what we all have in store if Comcast takes over.

Sprint’s New Plans: Putting Lipstick on a Pig and Enraging Your Soon-to-Be Ex-Customers

tmobileIf this is the best Sprint’s Marcelo Claure can do, Softbank needs to keep shopping for another CEO.

Claure’s decision to deep-six the appallingly stupid Framily Plan was a no-brainer. Sprint’s own customer service agents barely understood the multi-level marketing scheme it actually was, and I never saw much value in alienating friends and family by cajoling them to use the atrociously bad Sprint network. Neither did Sprint employees who loudly cheered its upcoming demise.

Even Claure trashed Sprint’s network performance and upgrade program as glacier-slow and highly disruptive to customers who find nearby cell sites here today, gone tomorrow, and maybe back again someday when network upgrades have been finished. Unlike AT&T or Verizon where a cell tower outage might cut a few bars of signal strength, when a Sprint cell tower drops, it’s roaming time. It is not uncommon for residents along Lake Ontario’s shorelines in the United States to find their phones preferring to roam on Canadian networks (especially Rogers) to avoid Sprint.

Claure’s commitment to cut prices while cruelly excluding your current customer base from getting any of those savings is a sure-fire way to accelerate their departure… mostly to T-Mobile. John Legere is waiting with open arms.

Sprint doesn’t need to just cut prices, it needs to butcher them, and fast. Sprint’s loyal customers have been promised a lot since the company unveiled its Network Vision upgrade plan during the French Revolution of 1789. The Bastille might still be standing today had Sprint slapped a working 4G LTE antenna on top of it. But alas, let them suffer with Sprint 3G, declared Dan Hesse, on a network so bad that throttled customers in heavy-use prison actually saw their speeds rise. Some customers in western New York simply turn Sprint 3G data off to save the battery.

When Sprint 4G LTE finally did arrive in western New York (illogically first in rural communities like the stiflingly-dull town of Dansville), many barely noticed because Sprint’s backhaul connection between the cell tower and Sprint’s data network often stayed the same — congested and slow.

Although T-Mobile’s coverage is not that different from Sprint, its network upgrades are.

T-Mobile CEO John Legere has confidently pushed Sprint around over its newest plan, but if it does start to eat into T-Mobile’s business, Legere will no doubt respond with some new plans of his own. For current Sprint customers, T-Mobile is definitely the upgrade Sprint has promised for at least five years, and should be considered at contract renewal time. But current Verizon and AT&T customers paying Cadillac pricing should not be expected to switch to Sprint after recalling dropped calls in a store, home or in an emergency on Sprint’s less robust network. They are very unlikely to change carriers no matter what shade of lipstick Sprint applies to its plans.

Claure has the right idea — slash prices and actually deliver on promises of a better network going forward, but those commitments deserve to apply to both existing and new customers. So far Claure has managed to inflict only superficial wounds. The price cuts must go much deeper to attract business from customers of the larger carriers willing to compromise for the right price and upgrades have to be real and delivered immediately.

Sprint still doesn’t understand it cannot charge Honda Accord prices on a Chevy Spark network. Until they do, T-Mobile is likely to continue taking them to school.

 

Frontier Communications Promises Gigabit Broadband Will Be Available… to Almost Nobody

Frontier's "High Speed" Fantasies

Frontier’s “High Speed” Fiber Fantasies

Frontier Communications has jumped on the gigabit broadband promises bandwagon with an announcement to investors the company will make available 1,000Mbps broadband speeds available later this year to a small handful of customers.

“I want to note that nearly 10% of our households are served through a fiber to the home architecture,” said Frontier’s chief operating officer Dan McCarthy. “Over the next several quarters we will introduce expanded speed offerings in select markets including 50-100Mbps services. Some residential areas will also be able to purchase up to 1Gbps broadband service. We are excited to bring these new products to market and look forward to making these choices available to our customers.”

Most of Frontier’s fiber customers are part of the FiOS fiber to the home infrastructure Frontier adopted from Verizon in Fort Wayne, Ind., and in parts of Oregon and Washington. The rest of Frontier customers accessing service over fiber are in a few new housing developments and some multi-dwelling units. The majority of customers continue to be served by copper-based facilities.

Despite the speed challenges imposed by distance-sensitive DSL over copper networks, Frontier customers crave faster speeds and more than one-third of Frontier’s sales in the last quarter have come from speed upgrades. As of this month, 54% of Frontier households can receive 20Mbps or greater speed, 75% can get 12Mbps and 83% can get 6Mbps. Here at Stop the Cap! headquarters, little has changed since 2009, with maximum available Frontier DSL speeds in this Rochester, N.Y. suburban neighborhood still maxing out at a less-impressive 3.1Mbps.

Frontier’s plans for the next three months include a growing number of partnerships with third-party equipment manufacturers and software companies, as well as integrating former AT&T service areas in Connecticut into the Frontier family:

Sale of AT&T Connecticut Assets to Frontier Communications Wins Approval from State Attorney General

frontier frankConnecticut’s Attorney General has announced a deal with Frontier Communications to approve its acquisition of AT&T’s wired assets in the state. The office asked for and got a three-year rate freeze on basic residential telephone rates and a commitment to keep selling standalone broadband at or below Frontier’s current rates. Low-income military veterans would receive basic broadband service for $19.99 per month, a substantial discount off the regular price of $34.99. The first month of service is free.

Frontier will make $500,000 in donations annually to various Connecticut charities, give $512,500 to the University of Connecticut basketball teams, and commit $75,000 to sponsor the Connecticut Open tennis tournament in New Haven.

The phone company has also committed to invest $64 million on network upgrades between 2015-2017, primarily to expand DSL broadband and U-verse service. The company also must undertake to inspect the wireline network it is buying from AT&T and replace deteriorating infrastructure including lines and telephone poles as needed.

Frontier announced it was buying AT&T’s wired assets in December for $2 billion. AT&T will continue to own and operate its wireless network assets in the state. Connecticut was home to AT&T’s only significant landline presence in the northeast. The Southern New England Telephone Company of Connecticut was originally bought by SBC Communications for $4.4 billion in 1998. After SBC purchased AT&T, the telephone company changed its name to AT&T Connecticut. Its primary competitor is Cablevision Industries, which also serves eastern New York and parts of New Jersey. AT&T has aggressively deployed its U-verse platform in Connecticut. Frontier will continue to run and expand U-verse in the state.

Frontier Services and Partnerships Expand

  • Customers may have already received marketing for Frontier’s Emergency Phone, a $4.99/mo landline that can only reach 911. Frontier CEO Maggie Wilderotter told investors that global climate change has made weather patterns more unpredictable, making the reliability and resiliency of traditional landlines a “true life line” in the event of an emergency knocking out Voice over IP lines or cell phone service;
  • Frontier Texting, powered by Zipwhip, allows customers send and receive text messages using their existing landline numbers. The service appears most popular with business customers, with more 800 signed up so far;
  • Frontier third-party technical and security support offers a large range of computer security, home automation, and support services for both hardware and software. Frontier added the Nest thermostat during this quarter, as well as tech support for Intuit QuickBooks and Dropcam remote video monitoring.

Wilderotter Flip-Flops on Gigabit Broadband: You Don’t Need a Gig

Less than three weeks ago, Wilderotter told the Pacific Northwest readers of The Oregonian they didn’t need gigabit broadband speeds:

“Today it’s about the hype, because Google has hyped the gig,” said Wilderotter, in Portland this week for a meeting of her company’s board. She said Google is pitching something that’s beyond the capacity of many devices, with very few services that could take advantage of such speeds, and confusing customers in the process.

“We have to take the mystery and the technology out of the experience for the user because it’s a bit disrespectful to speak a language our customers don’t understand,” said Wilderotter, in Portland this week for a meeting of her company’s board.

Frontier’s pitch: Better prices for more modest speeds. For most people, Wilderotter said, 10 to 12 megabits per second will be perfectly adequate for at least the next couple years. She said Frontier is upgrading its networks in rural communities where it doesn’t offer FiOS to meet that benchmark.

Now that Frontier proposes to offer those speeds, company officials are excited they will be available. Customers shouldn’t be. Most won’t have access for some time to come, if ever.

Damage Control Amateur Hour at the N.Y. Assembly Majority Leader’s Office

grammarly

Assemblyman Joe Morelle’s letter to N.Y. regulators failed this online plagiarism checker when it found the majority of the text was lifted from Comcast’s own press statements and congressional testimony, without attribution.

News that Assemblyman Joe Morelle cut and pasted the majority of his letter to New York regulators directly from a Comcast press release and executive testimony before Congress has begun to create some problems for the assemblyman and his office.

The story has been picked up by a Rochester television station, two New York newspapers and the National Journal (so far). We have now learned that Assemblyman Morelle also cashed a $1,000 campaign contribution check from Comcast earlier this year.

In response to our story, the assemblyman’s office today issued a litany of excuses about why it now fronts for Comcast, none of them particularly convincing. In fact, the damage control effort may actually be making the problems for Mr. Morelle and Comcast worse:

WROC-TV:

Sean Hart, said Comcast approached the assemblyman for his support. “They provided a draft letter of support for our consideration. We made several edits of the letter. This is common practice for any organization asking for an elected official’s support to provide a sample letter.”

Comcast is not an “organization.” It is a multi-billion dollar telecommunications and entertainment conglomerate. We are grateful to have confirmation that Comcast is sending out “templates” to elected officials with talking points already prepared and ready to go. The only issue is whether an elected official will steer clear of promoting giant corporate merger deals they don’t understand (and Mr. Morelle clearly does not have a clue.)

Did Mr. Morelle consult with his own constituents before deciding to tote water for Comcast? Not that we are aware of. Even the Public Service Commission’s own staff recognizes the overwhelming majority of New Yorkers communicating with them on this issue (nearly 3,000 and counting), are vehemently opposed to the deal. Many have past personal experiences dealing with Comcast, and they don’t have the benefit of a $1,000 check from the cable company to give them warm feelings of goodwill.

Although it may be common practice for a company to do this kind of advocacy work, it is not common for most elected officials to barely rewrite the company’s own press releases and executive testimony. Out of thousands of elected officials in New York, only a dozen or so have weighed in with the PSC on this issue.

Our favorite attempt at damage control came from Mr. Hart’s comments to The Journal News:

“It is common practice for an organization seeking support to provide a sample letter with suggested language,” Hart wrote. “I am certain if you were to review letters of support for any number of projects/causes submitted by elected officials, at every level of government, you would find that many opt to extract language from a sample letter provided to them.”

Hart rejected the suggestion that Morelle plagiarized the Comcast and Time Warner executives’ testimony, as suggested by Stop the Cap. The letter to the Public Service Commission was signed by Morelle and printed on official Assembly letterhead.

“I realize I probably do not need to point this out to a journalist, but the definition of plagiarism is ‘an act or instance of using or closely imitating the language and thoughts of another author without authorization and the representation of that author’s work as one’s own,'” Hart wrote. “Morelle has authorization from Comcast to use the language included in his letter to the NYSPSC.”

He continued: “It is one thing to disagree with the Majority Leader’s opinion. It is another to make outlandish claims that lack merit.”

Morelle

Morelle

We have reviewed over 8,000 comments filed with regulators on the state and national level since 2008. We have rarely encountered a cut and paste job as obvious as Mr. Morelle’s letter. When you review as many filings as we do, when talking points are quoted word for word, it stands out because we have heard them from Comcast again and again.

Mr. Hart does not help Mr. Morelle’s cause defending the fact he had Comcast’s permission to cut and paste their press releases in comments sent on the Majority Leader’s letterhead and signed by him personally. Comcast could and should have co-signed it. The fact that it happened at all should ring alarm bells for any voter, particularly those who don’t appreciate an elected official inviting America’s most-hated cable company into New York State.

As for the matter of plagiarism, perhaps we missed the part where Mr. Morelle made sure to credit the source for his testimonial. Oh wait, we didn’t. It wasn’t in there. Would Mr. Hart’s excuses fly by your college professor after being caught cutting and pasting someone else’s words in a paper you ostensibly wrote without any attribution?

Maybe we were wrong, so we decided to run Mr. Morelle’s letter through an online plagiarism checker to see what it thought.

Uh oh: Grammarly not only fired off a warning, but a full-scale “!” plagiarism alert, even after we discounted our own (and others) coverage of the story, which also quotes from his letter.

If Mr. Hart wants to attack us for exposing the sordid affair, we’re fine with that. We’re tough and can take it. He’ll find few (unpaid) defenders of Comcast to stand with the assemblyman.

Frankly, the only “outlandish claims that lack merit” are Comcast’s promises for New York. If Mr. Morelle is that comfortable extending his own credibility to vouch for Comcast, we’ll still be around to remind his constituents the promised dreams of better days inevitably devolved into a consumer nightmare, just as it has in Comcast’s primary service areas. Voters should know Comcast has Joe Morelle’s full and unwavering support.

The best damage control? Rescind the letter. All will be forgiven. Mr. Morelle won’t be the first (or last) elected official suffering collateral damage from Comcast.

NYS Assembly Leader Joe Morelle Plagiarizes Comcast Testimony in Letter to Regulators

New York State Assembly Leader Joe Morelle (D-Rochester) plagiarized large sections of a Comcast press release and the Congressional testimony of Comcast’s executive vice president David Cohen in a letter sent to the New York Public Service Commission endorsing the cable company’s bid to merge with Time Warner Cable.

Morelle evidently ignored or was unaware of his constituents’ overwhelming opposition to the merger deal and seemed unfazed about Comcast’s long record of dreadful customer service, constant rate increases, and the company’s plan to reimplement usage limits on consumer broadband accounts. Morelle simply cut and pasted Comcast’s own words in his letter about the merger, as we illustrate below:

 

morelleN.Y. State Assembly Leader Joe Morelle: “The combination of Comcast and Time Warner Cable will create a world-class communications, media and technology company to help meet the increasing consumer demand for advanced digital services on multiple devices in homes, workplaces and on-the-go.”

cohenDavid Cohen, executive vice-president, Comcast: “The combination of Comcast and TWC will create a world-class communications, media, and technology company to help meet the insatiable consumer demand for advanced digital services on multiple devices in homes, workplaces, and on-the-go.”

 

morelleJoe Morelle: “Comcast has a proven record of investing in new technologies, facilities and customer support to provide the best in broadband Internet access, video and digital voice services.”

cohenDavid Cohen: “Comcast has a proven record of investing in new technologies, facilities, and customer support to provide the best in broadband Internet access, video, and digital voice services.”

 

morelleJoe Morelle: “Similarly, TWC has made significant strides in offering a diverse array of video, broadband, and voice services to its customers.”

cohenDavid Cohen: “Similarly, TWC has made significant strides in offering a diverse array of video, broadband, and voice services to its customers.”

 

morelleJoe Morelle: “Combining the two companies’ complementary strengths will accelerate the deployment of next-generation broadband Internet, video and voice services across the new company’s footprint.”

cohenDavid Cohen: “Combining the two companies’ complementary strengths will accelerate the deployment of next-generation broadband Internet, video, and voice services across the new company’s footprint.”

 

morelleJoe Morelle: “Residential customers will benefit from technological innovations including a superior video experience, higher broadband speeds and the fastest in-home Wi-Fi, while also generating significant cost savings and other efficiencies.”

comcastComcast Press Release: “Through this merger, more American consumers will benefit from technological innovations, including a superior video experience, higher broadband speeds, and the fastest in-home Wi-Fi. The transaction also will generate significant cost savings and other efficiencies.”

 

morelleJoe Morelle: “In just two-and-a-half years, over 350,000 families, representing approximately 1.4 million low-income consumers, have been connected to the Internet thanks to this program. This proposed merger would extend this vital program to many more low-income households in New York by providing access to it in certain areas of the state currently only served by Time Warner.

cohenDavid Cohen: “In just two and a half years, over 300,000 families, representing some 1.2 million low-income consumers, have been connected to the transformative power of the Internet thanks to this program. The transaction will extend this vital program to millions more Americans in the areas currently served by TWC.”

Syracuse Wants More Choices Than Comcast and Verizon: Considers Building Publicly-Owned FTTH Alternative

Downtown Syracuse (Image: Post-Standard)

Downtown Syracuse (Image: Post-Standard)

The city of Syracuse is facing an unpleasant broadband reality: the current cable company is about to be bought out by Comcast (which has usage caps in store for broadband customers) and the phone company has thrown in the towel on further expanding FiOS — fiber to the home broadband.

Mayor Stephanie Miner isn’t willing to let the city get trapped by a lack of broadband options from Comcast and Verizon, so she’s developing a plan to build a publicly owned alternative.

“I’m putting together a plan that we can do it ourselves, as a community,” Miner told the Post-Standard

If approved, Syracuse would join Chattanooga, Lafayette, La.,  Wilson and Salisbury, N.C., and several other cities providing local citizens with broadband speeds up to 1,000/1,000Mbps.

“Would we have to do that in phases? What would that look like? How would we pay for it? What would the model be? Those are all things that we are currently looking at, ” Miner noted.

Many of those questions have already been worked out by the best clearinghouse Stop the Cap! knows for excellent community broadband project development: the team at the Institute for Local Self Reliance.

The Community Broadband Networks Initiative of the Institute for Local Self-Reliance, works with communities across the United States to create the policies needed to make sure telecommunications networks serve the community rather than a community serving the network. The Institute for Local Self-Reliance is a non-profit organization that started in Washington D.C. in 1974.

ILSR’s Mission:

The Institute’s mission is to provide innovative strategies, working models and timely information to support environmentally sound and equitable community development. To this end, ILSR works with citizens, activists, policymakers and entrepreneurs to design systems, policies and enterprises that meet local or regional needs; to maximize human, material, natural and financial resources; and to ensure that the benefits of these systems and resources accrue to all local citizens.

No community should attempt to build a community broadband network without first consulting with ILSR. They are particularly effective at helping combat the misinformation campaigns that often arise when an incumbent duopoly discovers they are about to get serious competition for the first time.

If your community wants something better than the local cable and phone company, have your local official(s) E-mail or call Christopher Mitchell at ILSR: 612-276-3456 x209

With entrenched providers unwilling to meet the needs of communities for affordable fast Internet, more American communities are providing the service themselves, much as they take care of local roads, bridges, and other public infrastructure. Comcast’s toll information superhighway may work wonders for shareholders, but it leaves most customers cold. Syracuse, like most upstate New York cities, has also watched Verizon flee from investments in FiOS expansion beyond a handful of wealthy suburbs. Verizon has diverted much of its investment away from wired networks in favor of wireless, a much more profitable business.

Rochester City Councilman Adam McFadden’s Love for Comcast (and the $50k)

McFadden

McFadden

Rochester city councilman Adam McFadden wrote a gushing letter in support of the merger deal between Comcast and Time Warner Cable published today on the N.Y. Public Service Commission website that doesn’t come close to fully disclosing the financial ties between Comcast and a lobbying group he presides over, funded in part by Comcast.

I write to you today from one of our state’s and the country’s oldest centers for enterprise and industry, Rochester. I am proud to represent my lifelong home as City Councilman for the South District. The proposed transaction between Time Warner Cable and Comcast has attracted a lot of attention here in New York, and deserves to be fully considered. I write to you today to urge your approval of the transaction so that Rochester residents, and New Yorkers across the state, can be empowered by Comcast’s innovative and dedicated service.

My area is currently served by Time Warner Cable, but would receive Comcast coverage following the approval of the transaction. I am lucky to represent my community not just locally, but on the national stage. Through my experience with the National League of Cities, and as the vice president of the National Black Caucus of Local Elected Officials, I’ve heard about Comcast’s track record of serving the public good in communities like mine.

We don’t doubt for a moment McFadden has “heard” about Comcast. McFadden is listed as president of the National Black Caucus of Local Elected Officials’ Board of Directors, a group whose website is emblazoned with Comcast’s logo as a generous “capstone partner” of the NBC-LEO and National League of Cities. Capstone partners must give an “annual investment” of at least $50,000. In fact, Comcast isn’t just a passive member of the group McFadden helps to run. Ron Orlando, senior director of Comcast’s lobbying/government affairs department sits on the group’s “Corporate Partners Leadership Council Roster.”

“The Council shares the perspectives of the corporate and not-for-profit sectors and makes recommendations for activities that promote the exchange of ideas between corporate and city leaders,” claims the website.

That is a nice way of saying corporate sponsors can use the group as a front to insert its corporate agenda into the public dialogue, while avoiding disclosure it is, in fact, pulling the strings. Capstone members get plenty of face time with the group… in private, through “exclusive access to the voluntary leadership and targeted member groups at NLC conferences and special VIP events.

But our favorite is allowing corporate members access to discounted mailing lists maintained by the NLC that left companies directly target elected and career officials in all cities with a population greater than 10,000 to spread their talking points.

McFadden’s constituents might be wondering whether he represents their interests or Comcast when he pens a letter to New York regulators urging them to allow an unpopular merger between two colossal cable companies. McFadden didn’t write his letter under the name(s) of the two groups that have direct financial ties to Comcast. He wrote it in his role as a city councilman.

We consider it highly unethical that McFadden did not disclose the strong direct financial ties between Comcast and the organizations he represents and has not exactly trumpeted his full-throated support for the cable merger deal among his constituents, who probably like Time Warner Cable and Comcast a lot less than he does. But then, $50,000 a year can bring a lot of goodwill if your group is getting the check.

[Update 1:30pm 8/12: We are told Mr. McFadden has denied knowledge of the $50k and claims he wrote the letter because he "hates Time Warner Cable." Nice try. Follow the links and get back to us about how we could find this information in about 10 minutes and you couldn't. If you hated Time Warner, you will despise Comcast... but then there is that $50,000 annually to think about.... - PMD"]

Stop the Cap!’s Letter to N.Y. Public Service Commission on Comcast/TWC Merger Deal

psctest

August 6, 2014

Hon. Kathleen H. Burgess
Secretary, Public Service Commission
Three Empire State Plaza
Albany, NY 12223-1350

Dear Ms. Burgess,

The country is watching New York to learn if our state regulators believe a merger between two unpopular cable operators is in the best interest of New York residents.

For the first time in a long time, the Public Service Commission has been empowered to provide much needed oversight over two companies that have enjoyed both deregulation and a near-monopoly across the region, particularly for High Speed Internet service at speeds above 10Mbps.

New Yorkers, like the rest of the country, consistently rank both Comcast and Time Warner Cable as some of the worst companies around.[1] The PSC has the power to facilitate franchise transfers that would effectively combine the two into one giant monolithic cable company dominating the northeastern U.S., or it can reject the proposed assignment of franchises to Comcast, letting both companies know “in the public interest” means something in New York State.

Section 222 of the New York Public Service law[2] provides the PSC with the authority to reject the application for a transfer of a franchise, any transfer of control of a franchise or certificate of confirmation, or of facilities constituting a significant part of any cable television system unless, and I paraphrase, the transfer is in the public interest.

The Commission is on record partly articulating its standard for determining the public interest. In 2013, the Commission stated several principles it considered in the matter of the acquisition of Central Hudson Gas and Electric by Fortis, Inc., to determine if the transaction would provide customers positive net benefits.[3] The Petitioners in that case were held to a standard requiring them to demonstrate the expected intrinsic benefits of the transaction exceeded its detriments and risks.

However, there are considerable differences between energy utilities and the largely deregulated marketplace for multichannel video distributors and broadband providers. While legacy telephone regulations still provide for significant oversight of this vital service, cable operators have won the right to set their own rates, service policies, and broad service areas.

Although many of us believe broadband has become an essential utility service, federal regulators do not, especially after telephone and cable companies have successfully lobbied on the federal level to weaken or eliminate regulation and oversight of television and broadband service with arguments they do business in a fiercely competitive marketplace.[4]

Regulators cannot compel cable operators to provide service in communities where they have chosen not to seek a franchise agreement, and broadband expansion programs in rural, unserved areas have largely only been successful when communities elect to construct their own broadband networks or federal funds (tax dollars and subsidies funded by ratepayers) defray the expense of last-mile networks.  While it is enticing to seek a voluntary agreement from the applicant to expand its rural service area, the public interest benefit to the relatively small number of New Yorkers getting broadband for the first time must be weighed against the interests of millions of existing subscribers in New York who are likely to see further rate increases, usage-limited broadband service, and worse service from Comcast.

New Yorkers will remain captive in most areas to choosing between one telephone and one cable company for packages of phone, television, and Internet access.[5] Promises of competition have never materialized for vast numbers of state residents, particularly those upstate who have been left behind after Verizon ceased its FiOS fiber to the home expansion project.

Unless Comcast was compelled to wire the entire state, any proposal seeking a voluntary agreement to expand Comcast’s service area in New York is likely to be insufficient to solve the pervasive problem of rural broadband availability. It would also saddle millions of New Yorkers with a company unwelcomed by consumers, with no alternative choice.

As you will see in our filing, Comcast has often promised improvements it planned to offer anyway, but held back to offer as a “concession” to regulators.

The result of past deals is one monopolistic cable operator is replaced by another, and as the American Consumer Satisfaction Index reported, bigger is not better for consumers.[6]

The nation’s two largest cable operators, Comcast and Time Warner Cable, now seek further “value creation” for their already very profitable businesses by merging.[7]

News reports indicate further consolidation is likely in the telecommunications marketplace, largely in response to this merger proposal. Soon after Comcast made its announcement, AT&T announced its desire to acquire DirecTV,[8] and Charter Communications’ efforts to bolster its size are likely to be realized acquiring Time Warner Cable customers cast off as part of the Comcast-Time Warner Cable transaction.[9]

How does this benefit New Yorkers? In our attached statement, we go far beyond the testimony offered by Comcast’s representative at the public information meeting we attended in Buffalo. It is vital for any merger review to include a careful analysis of exactly what Comcast is proposing to offer New York. But it is even more important to consider the costs of these improvements. As you will see, many of the promised upgrades come at a steep price – set top box platforms that require a $99 installation fee, the prospect faster broadband speeds will be tempered by broadband usage limits and usage penalties largely unfamiliar to New Yorkers, and other technology upgrades that are accompanied by subscriber inconvenience and added costs.

Comcast’s promised commitments for customers must also be carefully weighed against what it promised shareholders. While Comcast claims it will spend millions to upgrade acquired Time Warner Cable systems (many already being upgraded by Time Warner Cable itself), the merger announcement includes unprecedented bonus and golden parachute packages for the outgoing executives at Time Warner Cable, including a $78 million bonus for Time Warner Cable CEO Rob Marcus, announced less than 60 days after taking the helm.[10] Comcast’s biggest investment of all will be on behalf of its shareholders, who will benefit from an estimated $17 billion share repurchase plan.[11]

The PSC should be aware that previous efforts to mitigate the bad behavior of cable companies have nearly always failed to protect consumers.

Professor John E. Kwoka, Jr., in his study, “Does Merger Control Work? A Retrospective on U.S. Enforcement Actions and Merger Outcomes,[12]” found past attempts at behavioral remedies spectacularly failed to protect against rapacious rate increases after  mergers are approved.[13]

In short, it is our contention that this merger proposal offers few, if any benefits to New York residents and is not in the public interest even if modestly modified by regulators.

The implications of this transaction are enormous and will directly impact the lives of most New Yorkers, particularly for broadband, now deemed by the industry (and consumers) its most important product.[14]

We have attached a more detailed analysis of our objections to this proposal and we urge the New York Public Service Commission to recognize this transaction does not come close to meeting the public interest test and must therefore be rejected.

 

Yours very truly,

 

Phillip M. Dampier

[1]http://arstechnica.com/business/2014/05/comcast-time-warner-cable-still-have-the-angriest-customers-survey-finds/
[2]http://codes.lp.findlaw.com/nycode/PBS/11/222
[3]http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={A55ECCE9-C3B2-4076-A934-4F65AA7E79D1}
[4]http://www.mi-natoa.org/pdfs/The_Ten_Disappointments_of_Cable.pdf
[5]http://www.newyorker.com/news/daily-comment/we-need-real-competition-not-a-cable-internet-monopoly
[6]http://www.theacsi.org/component/content/article/30-commentary-category/179-acsi-quarterly-commentaries-q1-2008
[7]http://corporate.comcast.com/images/Transaction-Fact-Sheet-2-13-14.pdf
[8]http://www.usatoday.com/story/money/business/2014/05/13/att-directv-deal-analysis/9044491/
[9]http://www.reuters.com/article/2014/04/28/us-charter-communi-comcast-idUSBREA3R0N620140428
[10]http://money.cnn.com/2014/03/21/news/companies/time-warner-cable-golden-parachute/
[11]http://www.cleveland.com/business/index.ssf/2014/02/comcast_agrees_to_purchase_of.html
[12]John E. Kwoka, Jr., “Does Merger Control Work? A Retrospective on U.S. Enforcement Actions and
Merger Outcomes,” 78 Antitrust L.J 619 (2013)
[13]7 John E. Kwoka, Jr. and Diana L. Moss, “Behavioral Merger Remedies: Evaluation and Implications for
Antitrust Enforcement,” at 22, available at
http://antitrustinstitute.org/sites/default/files/AAI_wp_behavioral%20remedies_final.pdf
[14]http://online.wsj.com/news/articles/SB10001424052702303657404576359671078105148

Stop the Cap’s Formal Written Submission Opposing Comcast-Time Warner Merger Filed With N.Y. PSC

(Ed. Note: Our formal written submission to the New York Public Service Commission is presented in this series of articles. Please note that any graphics included on Stopthecap.com were not included in the formal filing, but are presented here to make the material more reader-friendly. — PMD)

psctest

STATE OF NEW YORK

PUBLIC SERVICE COMMISSION


Joint Petition of Time Warner Cable Inc. and

Comcast Corporation For Approval of a                                       Case 14-M-0183

Holding Company Level Transfer of Control.


 

 

Statement of Opposition to Joint Petition
Phillip M. Dampier, Director and Founder: Stop the Cap!
Rochester, New York
August 1, 2014

Stop the Cap! is a not-for-profit group founded in Rochester in 2008 to fight against the introduction of artificial limits on broadband usage (usage caps, consumption billing, speed throttling) and for better broadband speeds and service for consumers. Our group does not solicit or accept funding from lobbyists, companies, or others affiliated with the telecommunications industry. We are entirely supported by individual donors who share our views.

telecompromising

Regulators cannot outsmart multi-billion dollar corporate giants with temporary merger mitigation strategies that end up not helping consumers for very long, if it all.

Introduction

Our opposition to the Joint Petition is based on our belief it does not meet the “public interest”  test established in Section 222 of the New York Public Service law, and must therefore be denied.

We are concerned the Commission may attempt a mitigation of Comcast’s failure to demonstrate a public interest benefit for New York residents in its application. The Commission may even attempt to negotiate a monetary public benefit adjustment to afford Comcast the opportunity to pay its way to approval of a merger the overwhelming majority of New Yorkers who have shared their views with the Commission ardently oppose. We submit that the recent change in New York law obligates the applicant alone to demonstrate its proposal is in the public interest. It is not the Commission’s responsibility to propose mitigation formulas that tip the balance in favor of an applicant.

Also lacking in the discussion is a careful analysis and comparison of Time Warner Cable’s existing products and services in contrast with Comcast and, more importantly, the impact of its own upgrade program now underway. It is our contention New York will be better served by retaining Time Warner Cable as the dominant cable provider and rejecting Comcast’s attempt to transfer Time Warner’s franchise agreements to itself. We are not opposed to Comcast independently entering New York and competing head-to-head with Time Warner Cable, although we believe it is unlikely.

Ultimately, we believe Comcast’s executive vice-president David Cohen made one of the strongest arguments why this merger simply does not make sense for New York:

“We are certainly not promising that customer bills will go down or increase less rapidly.”[1]

[1]http://arstechnica.com/tech-policy/2014/02/comcast-no-promise-that-prices-will-go-down-or-even-increase-less-rapidly/

Comcast’s “Improvements,” Including Digital TV, Come at a High Cost for Customers

psctest

Comcast has offered the Commission a vague preview of how it intends to improve cable television service for New York customers, but rarely discloses important details about the costs and limitations their “improvements” will bring.

comcast octupusWhile Comcast is excited about the proposition of transitioning Time Warner Cable customers away from the current mixed analog-digital platform to an all-digital lineup, Time Warner Cable customers have paid less and avoided costly, unwanted extra equipment as a result of the choices consciously made by Time Warner Cable.

Comcast and Time Warner Cable have different philosophies about how to best deliver the bulging cable television packages most cable systems now offer:

  • Time Warner Cable adopted “Switched Digital Video” from BigBand Networks, a technology that lets Time Warner deliver only the digital signals that are being watched in a service group or node, instead of the entire lineup.[1] Since it is unlikely subscribers are watching every niche channel on offer, Time Warner has been able to reclaim unused bandwidth. As a result, customers using older cable-ready televisions can continue to access analog television channels without the use of a costly, often unwanted set top box.
  • Comcast has more aggressively chosen a  path to all-digital television service, moving most of their television channels to encrypted digital technology that requires a Comcast set top box, a less costly Digital Transport Adapter (DTA) designed for secondary-use televisions, or a CableCARD. Customers must choose one of these technologies, usually at an added-cost to access their cable television service.[2]

Time Warner Cable also began deploying DTA equipment in certain areas to free up additional bandwidth on its cable systems while still leaving most analog channels intact. The DTA boxes are supplied free of charge during an introductory phase lasting up to a year, after which a $0.99 monthly charge for each box is imposed.[3] (That fee has recently been raised in certain markets, including New York City, to $1.50/mo.[4] [5])

In contrast, Comcast customers were initially entitled to receive up to three no-cost DTAs to install on televisions not equipped with a Comcast set top box.[6]

comcast-cisco-dtaOn January 1, 2013 Comcast began informing subscribers a new $1.99/month “additional outlet service charge,” now applied for each DTA installed. [7]

Public officials in Eagan, Minn., responding to consumer complaints about the new charge, suspected Comcast was attempting an end run around the Federal Communications Commission’s prohibition of “excessive fees for cable equipment.”[8] The additional outlet fee was deemed by Comcast to be a service fee, not an equipment charge.[9]

Attorney Mike Bradley was hired by a group of suburban Minneapolis cable commissions to investigate the legitimacy of Comcast’s new DTA service charge. If the fee were classified as an equipment charge, Comcast would charge 50 cents per DTA based on rate forms filed with the Minnesota cable commissions he represents, Bradley told The Pioneer Press.[10]

For the average Comcast subscriber, the result was another rate increase in return for digital television service. Subscribers with three DTA’s now pay up to $5.97 extra per month in order to continue to receive the exact same programming on the same number of televisions within their household – a $25 annual surcharge per DTA, $75 if the customer uses three DTA’s, complained Eagan, Minn. Mayor Mike Maguire in a letter to Sen. Amy Klobuchar.[11]

Comcast’s fees, in addition to being well in excess of the actual cost of the equipment, will earn the company at least $550 million annually in new revenue – all for equipment that costs the company around $50 per unit.[12] Because Comcast is encrypting its lineup, even televisions equipped with QAM tuners, capable of receiving digital television signals without a set top box, will also eventually need the new equipment to unscramble television signals.

[1]http://www.cedmagazine.com/news/2009/09/time-warner-cable-serves-up-sdv-in-n.y.,-dallas,-l.a.
[2]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration
[3]http://www.cedmagazine.com/news/2012/01/time-warner-cable-wraps-up-all-digital-conversion-pilot-in-maine
[4]http://www.twcableuntangled.com/2013/04/were-converting-analog-signals-to-digital-across-the-new-york-region/
[5]http://www.timewarnercable.com/en/residential-home/support/faqs/faqs-tv/basictvencryption/what-will-the-digital-adapter-cost.html
[6] http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy
[7]http://customer.comcast.com/help-and-support/cable-tv/how-bill-will-change-with-digital-migration
[8]http://transition.fcc.gov/Bureaus/Cable/News_Releases/nrcb4009.txt
[9]http://stopthecap.com/2013/02/21/comcast-calls-1-99-charge-for-digital-adapters-a-service-fee-to-avoid-fcc-complications/
[10]http://www.twincities.com/ci_22617153/comcast-fee-plan-cause-confusion-controversy?IADID=Search-www.twincities.com-www.twincities.com
[11]https://dl.dropboxusercontent.com/u/9008/pioneerpress/yourtechweblog/Eagan%20-%20Sen%20Klobuchar%20ltr%20re%20Cable%20Rate%20Concerns%203-5-13.pdf
[12]http://cisco-news.tmcnet.com/news/2011/04/25/5464600.htm

Search This Site:

Contributions:

Recent Comments:

  • feather bed: Quality articles or reviews is the important to attract the viewers to pay a visit the website, that's what this website is providing....
  • Ralph: I absolutely love this comment, “As we’ve said before, the speed tests are the result of self-selected, self-reported samples,” Page said. “People who...
  • onlinehairclinic: Some infectionhs such aas fungal infections of the scalp, an underlying diseaselike diabetes orr lupus, scarring due to wearing pigtails, coornrows o...
  • Dekay: I was one of those unlucky Millenicom customers who just had their plan ($90/month) abruptly terminated. To get the same plan through Verizon would co...
  • Damian: Thank you for this article. I am currently with Comcast and have 50 Mbps internet speeds. I pump out a monthly average of 600 GB of data usage each m...
  • AustinTX: It's almost like Comcast has a crack team to identify anyone who is getting close to exposing them... and then giving them the push they need to go co...
  • James Cieloha: I prefer that the FCC comes with the idea of the most severe stiffest punishment handed down from the FCC being called the euthanization death penalty...
  • BobInIllinois: As a licensed CPA and auditor, this is very shocking, but very believable when one works for a Big CPA firm. I worked at a small firm, so this kind o...
  • Haiyez: I just got off the phone. I have U450 & Max Plus internet. I was paying $140 a month. The promo is over and now it's about $200 a month. Bes...
  • Fred Pilot: When a service provider views its customers as adversaries, an act like this is construed as enemy action, resulting in the blow up reported here....
  • Atreidae: That's if you live in a "class 1" area. I'm still well withn "metro melbourne" yet my exchange only has Telstra ports and their considered regional. S...
  • LoomsinJune: " I told her that I will just go ahead and cancel my service and sign up with Time Warner and she seemed more than happy to do that than offer to drop...

Your Account: