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The New Guilded Age is Pay-Per-View; Comcast-TWC Merger Like a Throwback to An Earlier Era

Phillip Dampier April 21, 2014 Comcast/Xfinity, Competition, Consumer News, History, Public Policy & Gov't Comments Off on The New Guilded Age is Pay-Per-View; Comcast-TWC Merger Like a Throwback to An Earlier Era

gildedA merger of Time Warner Cable and Comcast is just one more step towards undermining our democracy, worries former Secretary of Labor Robert Reich.

In a blog entry republished by Salon, Reich sees increasing evidence that the trust-busting days at the turn of the 20th century are long over, and Americans will likely have to relearn the lessons of allowing capitalism to run amuck.

It was the Republican Party of the 1890s that had the loudest voice in Washington protesting the concentration of business power into vast monopolies that had grown so large, they not only hurt consumers but threatened to undermine democracy itself.

Republican Senator John Sherman of Ohio was at the forefront of acting against centralized industrial power, which he likened to the abusive policies of the British crown that sparked America’s revolution for independence.

“If we will not endure a king as a political power,” Sherman thundered, “we should not endure a king over the production, transportation, and sale of any of the necessaries of life.”

The merger of Comcast and Time Warner Cable is just the latest example America is in a new gilded age of wealth and power that no longer prevents or busts up concentrations of economic power, observes Reich.

“Internet service providers in America are already too concentrated, which is why Americans pay more for Internet access than the citizens of almost any other advanced nation,” Reich argues.

Reich

Reich

Reich worries about the implications of allowing Comcast to grow larger, considering how much the current company already invests in Washington to get the government policies it wants:

  • Comcast has contributed $1,822,395 so far in the 2013-2014 election cycle, according to data collected by the Center for Responsive Politics — ranking it 18th of all 13,457 corporations and organizations that have donated to campaigns since the cycle began. Of that total, $1,346,410 has gone to individual candidates, including John Boehner, Mitch McConnell, and Harry Reid; $323,000 to Leadership PACs; $278,235 to party organizations; and $261,250 to super PACs;
  • Comcast is also one of the nation’s biggest revolving doors. Of its 107 lobbyists, 86 worked in government before lobbying for Comcast. In-house lobbyists include several former chiefs of staff to Senate and House Democrats and Republicans as well as a former commissioner of the Federal Communications Commission. Nor is Time Warner Cable a slouch when it comes to political donations, lobbyists, and revolving doors. It also ranks near the top.
Atwell-Baker

Atwell-Baker

The Center for Responsive Politics expanded on the revolving door issue between the cable industry and the Federal Communications Commission that will be responsible for approving the Comcast-Time Warner merger.

It found one of the most prominent travelers to be former FCC commissioner-turned Comcast lobbyist Meredith Atwell-Baker. Always a friend of the cable industry, the Republican commissioner hurried out the door two years into her four-year term after getting a lucrative job offer from Comcast in June 2011. Despite claims she stopped participating in votes relating to Comcast after getting her job offer, she was a strong supporter of Comcast’s merger with NBCUniversal and favored the cable industry’s approach towards preserving a barely noticeable feather-light regulatory touch.

Atwell-Baker never contemplated her move might be seen as a conflict of interest, but then again, it represented nothing new for Washington. At the time, the only condition limiting her was a two-year ban on lobbying the FCC. But that does not apply to Congress so Atwell-Baker spent her time as Comcast’s senior vice president of government affairs trying to influence the House and Senate on 21 bills that could affect Comcast’s bottom line.

Just as shameless — Michael Powell, who served as FCC chairman during the first term of the George W. Bush Administration. After leaving the FCC he took the lucrative position of top man at the National Cable & Telecommunications Association, the cable lobby. The Center found several other former FCC employees heading into the private sector, advising Big Telecom companies on how to best influence regulators:

  • Rudy Brioche, was an adviser to former commissioner Adelstein before moving to Comcast as its senior director of external affairs and public policy counsel in 2009. Brioche was so valued by the FCC, in fact, that he was brought back to join the commission’s Advisory Committee for Diversity in the Digital Age in 2011;
  • James Coltharp, who served as a special counsel to commissioner James H. Quello until 1997, is now a Comcast lobbyist;

comcast twcOnce out of the public sector for several years, some lobbyists see their value deteriorate as they get increasingly out of touch with the latest administration in power. So several seek a refresh, temporarily leaving their lobbying job to return to public sector work.

The Center offered David Krone as a potential example. Krone formerly held leadership and lobbying positions with companies like AT&T, TCI Communications and the National Cable & Telecommunications Association. After 2008, he was hired by Senate Majority Leader Harry Reid (D-Nev.) to advise him on telecommunications matters. Today he is Reid’s chief of staff. If and when Reid leaves office, Krone can always join the parade of ex-Hill staffers back to the lucrative world of lobbying.

Will elected officials give a receptive ear to Comcast’s arguments in favor of its merger? Most likely, considering every member of the Senate Judiciary Committee (except deal critic Sen. Al Franken), has recently received campaign contributions from the cable giant, according to OpenSecrets:

gilded-age.gjf_Comcast PAC donations to Senate Judiciary Committee Democrats

  • Chuck Schumer, New York: $35,000
  • Patrick Leahy, Vermont, Chairman: $32,500
  • Sheldon Whitehouse, Rhode Island: $26,500
  • Chris Coons, Delaware: $25,000
  • Dick Durbin, Illinois: $23,000
  • Amy Klobuchar, Minnesota: $22,500
  • Dianne Feinstein, California: $18,500
  • Richard Blumenthal, Connecticut: $11,500
  • Mazie Hirono, Hawaii: $5,000
  • Al Franken, Minnesota: $0

Comcast PAC donations to Republicans

  • Orrin Hatch, Utah: $30,000
  • Chuck Grassley, Iowa, Ranking Member: $28,500
  • John Cornyn, Texas: $21,000
  • Lindsey Graham, South Carolina: $13,500
  • Jeff Sessions, Alabama: $10,000
  • Mike Lee, Utah: $8,500
  • Ted Cruz, Texas: $2,500
  • Jeff Flake, Arizona: $1,000

Reich thinks its time to return to the trust-busting days of President Teddy Roosevelt, who found the transportation infrastructure of the 20th century and the fuel used to power it increasingly controlled by a handful of giant players that abused monopoly power to set unjustifiable prices and suppress competition. Getting Congress, increasingly flush with now-unlimited corporate money, to agree to its own refresh a century later may prove a tougher sell.

 

The Washington Post’s Delusional Support of the Comcast-Time Warner Cable Merger Debunked

corporatewelfareIf you have started to confuse the Washington Post editorial page with that of the Wall Street Journal, you are not alone.

Under the stewardship of Fred Hiatt, WaPo’s editorial opinions have grown increasingly anti-consumer and pro-corporate at home and decidedly neoconservative abroad.

It’s the same newspaper that wholeheartedly supported the merger of Comcast and NBC-Universal in 2010. Let’s check whether they called that one right:

Entities that compete with NBC-owned cable channels fear that Comcast will relegate them to hard-to-find channel locations. Consumer advocates warn that Comcast will use its newfound power to raise subscription rates and stifle new voices on television and the Internet.

The same newspaper reported last week that Comcast refused to let Back9Network, a golf oriented network in direct competition with Comcast-owned Golf Channel, on its cable systems.

For years, Bloomberg TV — in direct competition with Comcast-owned CNBC — has been stuck in Channel Siberia, in some areas like Chicago dumped between Comcast’s promotional “barker” channel and “Leased Access.” CNBC enjoys Ch. 29, certain to attract more viewers than Bloomberg’s Ch. 102.

As Stop the Cap! reported yesterday, no cable company raises cable television rates more than Comcast, blaming programming rate increases that in several cases originate with Comcast-owned cable networks.

Regulators should scrutinize the proposed merger but should be skeptical of the critics’ claims. […] Advocacy groups have been poor prognosticators of the effects of large media mergers.

The Washington Post’s editorial accuracy record has more than a few blemishes, from its 2003 declaration Colin Powell’s “evidence” of Iraqi weapons of mass destruction was “irrefutable,” to suggestions that a wedding of Comcast and NBC Universal wouldn’t hurt anyone because the FCC was ready to manage any problems without pesky mandates or overbearing pre-conditions.

The FCC already requires cable operators to deal fairly with competitors. Its rules would require Comcast to give competitors access to NBC content on “reasonable” and “non-discriminatory” terms. The company would also be required to negotiate in good faith about carrying non-NBC channels. Competitors who believed that they were harmed by unfair dealing could have their complaints adjudicated by the agency. Critics of the Comcast-NBCU merger claim that these mechanisms are ineffective and slow. But the breakdown of the complaint system should not be used as an excuse to impose onerous conditions on one company. Instead, critics should push for an overhaul of the system.

The Bloomberg case, now three years old, remains unresolved. That should tell readers something about just how quickly the FCC gets around to dealing with these kinds of complaints. Comcast has been able to argue its decision to bury Bloomberg and keep Back9Network off its cable systems are examples of ‘good faith, reasonable decision-making that doesn’t discriminate.’ It sued to quash Net Neutrality, critical for online video competition, and won.

The Post editorial amusingly insists that Comcast’s merger plans should not be interrupted because of an ineffective complaint system that can’t or won’t promptly deal with Comcast’s ongoing abuse of the very non-discriminatory rules the editors declare as a reason to support the Comcast-NBCUniversal merger.

Many of the same fears of domination and manipulation were raised with the 2001 merger of AOL and TimeWarner; that megadeal crumbled after a few years. Comcast and GE, which will retain a 49 percent stake in NBCU, should be allowed to proceed, and regulators should do their jobs and watch the newly formed company carefully.

Phillip "The Post's Naivete is Showing" Dampier

Phillip “The Post’s Naivete is Showing” Dampier

The 2001 merger of AOL and Time Warner came at the last gasp of the dot.com boom. As the New York Times noted, “In May of 2000, the dot.com bubble began to burst and online advertising began to slow, making it difficult for AOL to meet the financial forecasts on which the deal was based. The world began moving quickly to high-speed Internet access, putting AOL’s ubiquitous dial-up service in jeopardy.”

The final unraveling of AOL Time Warner came about because the combined company, highly dependent on AOL (and its stock value), could not sustain its business model when nobody could figure out how to get paid for content in the online world. AOL’s dial-up Internet access business was also rapidly in decline as the country started moving towards broadband.

“The consumer has access to everything and now it’s going to be on a handheld device, so what I call the rolling thunder of the Internet started actually to eat its own, which was AOL,” writes the Times. “AOL was the Google of its time. It was how you got to the Internet, but it was using some old media business ideas that were undone by the Internet itself, and that’s why Google came along.”

The same sad story is not true for Comcast or Time Warner Cable (which was spun off from Time Warner, Inc. as an independent company as part of a restructuring in 2009.)

Both cable companies are in a better place than AOL-Time Warner:

  • AOL relied on dial-up and reseller access to some broadband providers — neither sufficiently lucrative to sustain AOL’s dot.com-days value. Comcast/TWC own their own broadband networks;
  • Verizon FiOS and AT&T U-verse are the only significant multi-city broadband competitors for the cable industry. U-verse remains challenged by its technological limitations and Verizon stopped expanding FiOS. Google Fiber has a totally insignificant market share and is likely to stay that way for several years. Google Fiber provides no competition in the northeast where Comcast and Time Warner Cable dominate;
  • Comcast and Time Warner Cable both oppose community-owned broadband competition and Time Warner has successfully managed to push legislation virtually banning network expansion in several states;
  • Comcast will both own and control the pipes and a significant amount of the content that crosses its broadband networks. At the time of the AOL-Time Warner merger, online video competition did not exist in a meaningful way.

Comcast’s Cheerleader Kept His Connection to the Cable Giant Quiet At Last Week’s Senate Hearing

Phillip Dampier April 15, 2014 Comcast/Xfinity, Competition, Consumer News, Public Policy & Gov't Comments Off on Comcast’s Cheerleader Kept His Connection to the Cable Giant Quiet At Last Week’s Senate Hearing
Yoo

Yoo

An ostensibly independent witness at last week’s Senate hearing on the pending merger of Comcast and Time Warner Cable has been accused of keeping quiet about his conflict of interest.

University of Pennsylvania Law School professor Christopher Yoo was nothing less than an enthusiastic cheerleader of the merger deal, claiming it would never jeopardize cable competition. No “independent” witness testified as fiercely in support of the merger as Yoo.

But Yoo never bothered to disclose he has ties to Comcast’s chief lobbyist David Cohen, seated five chairs to his right. Cohen is the chairman of the board of trustees at the University of Pennsylvania. Comcast also contributes to the university in Philadelphia, Comcast’s corporate home.

Yoo was suggested as a possible witness to the ranking member, Sen. Chuck Grassley (R-Iowa), who formally invited him to testify.

“I was stunned to see the committee would allow it, because of at least the appearance of a conflict,” one observer told the NY Post. “It’s a little odd.”

A spokeswoman for Grassley said Yoo had been approved by both the majority and minority members of the committee.

The Cohen-Yoo Penn connection was likely not known, the spokeswoman said.

“The views of any other person in the university administration do not have any impact on my academic views or any public statements I make,” Yoo told the Washington Post in defense against the charges of conflict of interest.

Nobody Raises Rates Like Comcast: Since 2009 Up 68% for Basic, 21% for Expanded Basic Cable

Phillip Dampier April 15, 2014 Comcast/Xfinity, Competition, Consumer News Comments Off on Nobody Raises Rates Like Comcast: Since 2009 Up 68% for Basic, 21% for Expanded Basic Cable

comcast twcDespite arguing its merger with Time Warner Cable would result in greater discounts for cable programming, America’s largest cable company Comcast is already receiving the best volume discounts available but is not passing the savings on to customers.

No major cable operator raised cable television rates more than Comcast, according to a new study from Free Press. Since 2009, Comcast jacked up prices on its broadcast basic television tier by 68 percent. Its more popular expanded basic cable service saw rate hikes amounting to 21 percent over the same time.

In contrast, Time Warner Cable actually cut rates for broadcast basic cable by 2.5% and raised expanded basic prices by 17 percent.

Comcast’s top lobbyist David Cohen has made clear the company’s prices are going to keep rising even if the merger is approved. That is likely to give Time Warner Cable customers sticker shock if Comcast takes over. Comcast is likely to pass whatever cost savings it realizes from the merger back to shareholders, not to customers.

free_press_comcast_twc_video_price_hikes

Comcast Announces Speed Boosts for Customers (Without a Merger)

Comcast-LogoComcast has boosted Internet speeds for some of its broadband customers in the northeast.

Xfinity Internet Blast now offers 105Mbps, up from 50Mbps and Xfinity Extreme 105 has been increased to 150Mbps, up from 105Mbps.

The upgrade is free and applies in 14 northeastern states between Maine and Virginia and the District of Columbia. Customers may have to reboot their cable modems to connect with the faster speeds.

Comcast claims a merger with Time Warner Cable will benefit everyone with faster Internet speeds, but the company has increased broadband speeds — especially for premium tier customers — almost annually without the benefit of a merger.

Northeastern Comcast customers have yet to experience the company’s growing reintroduction of usage allowances on its broadband service, now set at 300GB a month in several mostly southern markets.

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