A Dutch telecommunications regulator is warning mergers and acquisitions rarely turn out well for competition or consumers, and admits mistakes were made when regulators allowed John Malone to create an effective cable monopoly in Holland.

Chris Fonteijn, board chairman of the Netherland’s Authority for Consumers and Market (ACM) told fellow regulators at a conference in London that two wired broadband providers are not enough to foster real competition, because the competitors are likely to collude on pricing and have a built-in incentive to limit costly upgrades.

Fonteijn

“Two telecom companies [in an area] is not sufficient to ensure that consumers get the best deals on price and quality,” Fonteijn said. “Two dominant operators can lead to coordination between the main players and less investment and innovation, disadvantaging consumers.”

Fonteijn confessed ACM may have made a mistake allowing John Malone’s UPC — a European cable conglomerate — to acquire its larger competitor Ziggo, establishing an effective monopoly in cable broadband in most parts of Holland. The merger has left most Dutch broadband users with two choices for broadband: telephone company KPN or  cable company Ziggo.

After the merger, Fonteijn believes the two companies reduced investment and innovation. Dutch regulators required KPN to open its network to wholesale customers who resell services over the telephone network. But UPC/Ziggo escaped any wholesale access requirement, further limiting potential competition. Fonteijn said ACM was revisiting that discrepancy and may force Ziggo to open up its cable system.

At the very least, Fonteijn suggests multiple wired operators competing with at least three nationwide mobile carriers to protect competition and innovation.

Stop the Cap! will formally participate in New York State’s regulator review of the proposed merger of Charter Communications and Time Warner Cable.

“We will be submitting documents and testimony to the New York State Department of Public Service on behalf of consumers across the state that need a better deal from their cable company,” said Phillip Dampier, the group’s president. “A review of the current proposal from Charter is inadequate for New York ratepayers and most of Charter’s commitments for better service and lower prices expire after just three short years.”

Stop the Cap! will urge regulators to insist on significant changes to Charter’s proposal that will permanently guarantee a broadband future with no compulsory usage caps/usage-based billing, Net Neutrality adherence, affordable broadband to combat the digital divide, and upgrades that deliver faster broadband than what Charter currently proposes outside of New York City.

Dampier

“Upstate New York is at serious risk of falling dramatically behind other areas where Google Fiber and other providers are moving towards a gigabit broadband future,” Dampier said. “In most of Buffalo, Rochester, Syracuse, Binghamton, and Albany buying the FCC’s definition of broadband means calling a cable company that now delivers no better than 50Mbps to residential customers. Verizon FiOS expansion is dead and obsolete/slow DSL from Frontier and Verizon should have been scrapped years ago.”

Stop the Cap! worries that with limited prospects for a major new competitor like Google in Upstate New York, broadband speeds and service will not keep up with other states. Verizon has devoted most of its financial resources to expanding its wireless mobile network, which is too expensive to use as a home broadband replacement. Frontier claims to be investing millions in its networks, but has delivered only incremental improvements to their DSL service, which in most areas is still too slow to qualify as broadband.

“Frontier is more interested in acquisitions these days, not upgrades,” Dampier argued.

“Although we have some entrepreneurs managing to deliver competitive fiber service in limited areas, it will likely take years before they will reach most customers,” Dampier added. “Upstate New York cannot wait that long.”

If Windstream was hoping to make a splash with its new Kinetic IPTV service, Time Warner Cable certainly isn’t reaching for a towel.

Kinetic debuted in April in Lincoln, Neb., the first community to get Windstream’s fiber to the neighborhood TV service. Three months after being introduced, it’s available in about half of the city. But it is not proving much of a threat to incumbent Time Warner Cable because Windstream set rates roughly the same or higher than what the cable company charges.

In fact, a Stop the Cap! reader contemplating a trial run of Kinetic was quickly dissuaded when he learned Windstream charged $10 more than what he already paid Time Warner Cable.

“Windstream either does not understand Time Warner’s pricing or is artificially trying to limit demand for the moment,” our reader tells us. “I have to believe it is one or the other because the alternative is they don’t know what they are doing and are creating an experiment built to fail. When I told Time Warner I was toying with the idea of trying Kinetic, they cut my bill another $30 a month and Kinetic is now dead to me.”

Time Warner Cable’s customer retention department is well positioned to keep customers because it can sell faster Internet speeds at a lower price than Windstream has offered so far. The phone company obviously has no interest in starting a price war in Lincoln:

• Windstream Kinetic offers packages ranging from $39.99-$129.98/mo;
• Time Warner Cable offers packages ranging from $19.99-$129.99/mo.

The Lincoln Journal Star reports other customers have had similar experiences.

Ryan Pryor said he inquired about Kinetic, but the price quoted was slightly more than what he now pays for a similar bundle with Time Warner and would have offered a slower Internet speed. So he chose to stick with what he has.

Where Windstream has had some success is attracting current satellite customers. Jason Smith was tired of losing satellite service during storms and since he was already a Windstream DSL customer, upgrading to Kinetic made sense.

“The picture quality has been very impressive,” Smith told the newspaper. “The one thing I noticed was how much better the picture looked than on DirecTV with the same HDMI connection to my TV.”

Smith is also happy with a more capable whole house DVR and the fact Windstream offers wireless set-top boxes.

But Smith also admitted he wasn’t sure if we would stick with the service long-term. A significant disadvantage of Kinetic is its reliance on copper wiring part of the way between Smith’s home and Windstream’s central office. All fiber to the neighborhood projects have bandwidth limitations that would not exist with a straight fiber to the home upgrade. Kinetic’s limits become clear when trying to watch three HD signals at once while being on the Internet. He can’t. Kinetic limits customers to two HD video streams at a time, compared with DirecTV’s five. Broadband speeds slow if other members of the household are also accessing telephone and television services.

With competition like that, Time Warner Cable has done little to strengthen its position, with no immediate plans to upgrade service in the city. All that has changed recently is a channel realignment that groups like-channels together starting at channel 100. Time Warner began that nationwide channel realignment in Syracuse, N.Y., in the spring of 2013. More than two years later, that change is only now reaching Lincoln.

Bryan Brooks, the Windstream vice president of business development, did not offer the newspaper many specifics about how Kinetic was performing, except to say demand has met expectations.

The headquarters building of U.S. satellite TV operator DirecTV is seen in Los Angeles, California May 18, 2014. REUTERS/Jonathan Alcorn

WASHINGTON (Reuters) – AT&T Inc’s proposed $48.5 billion acquisition of DirecTV is expected to get U.S. regulatory approval as soon as next week, according to people familiar with the matter, a decision that will combine the country’s No. 2 wireless carrier with the largest satellite-TV provider.

The Department of Justice, which assesses whether deals violate antitrust law, has completed its review of the merger and is waiting on the Federal Communications Commission to wrap up its own, according to three people familiar with the matter.

The FCC, which reviews if deals are in public interest, is poised to approve the deal with conditions as early as next week, according to three other people familiar with the matter.

All the sources asked not to be named because they were not authorized to speak with the media. An AT&T spokeswoman and FCC spokesman declined comment. Justice Department representatives were not immediately available for comment.

AT&T’s merger with DirecTV, announced in May 2014, would create the country’s largest pay-TV company, giving DirecTV a broadband product and AT&T new avenues of growth beyond the maturing and increasingly competitive wireless service.

The deal has been expected to pass regulatory muster in contrast with the rival mega-merger between cable and Internet providers Comcast and Time Warner Cable, which was rejected in April largely over the combined companies’ reach into the broadband market.

The FCC and AT&T have been in negotiations over conditions for the merger for several weeks, the people said, adding that none of the conditions are controversial enough to break the deal.

Those conditions are expected to include assurances that both middle-class and low-income Americans have access to affordable high-speed Internet, including an offering of broadband subscriptions as a standalone service without a TV bundle, according to two of the people.

AT&T has earlier committed to expand access to broadband service in rural areas and to offer standalone Internet service at speeds of at least 6 Megabits per second to ensure consumers can access rival video services online, such as Netflix.

FCC officials are also considering ways to ensure that the conditions are properly enforced in the future, possibly through a third-party monitor, according to the two sources.

The FCC is also weighing how to ensure the merged companies abide by the so-called net neutrality rules, which regulate how Internet service providers manage traffic on their networks.

AT&T has promised to abide by net neutrality principles such as no-blocking of traffic, but is challenging in court the FCC’s newest net neutrality regulations that have expanded the agency’s authority over various deals between Internet providers and content companies.

FCC reviewers are weighing what net neutrality-related conditions to apply to the merger and how to address the possibility that the court throws out the latest rules, the two sources said.

Reported by: Alina Selyukh and Diane Bartz

Sprint’s all-new “All-In” wireless plan was supposed to simplify wireless pricing for consumers by bundling a leased phone, unlimited voice, data, and texting for a flat $80 a month, but customers slogging through the fine print discovered speed throttling and roaming punishments were silent passengers along for the ride:

To improve data experience for the majority of users, throughput may be limited, varied or reduced on the network. Streaming video speeds will be limited to 600Kbps at all times, which may impact quality. Sprint may terminate service if off-network roaming usage in a month exceeds: (1) 800 min. or a majority of min.; or (2) 100MB or a majority of KB. Prohibited network use rules apply—see sprint.com/termsandconditions.

Although many smaller wireless carriers also have limits on off-network roaming usage, none have proposed to permanently throttle web videos to a frustratingly slow 600kbps. At those speeds, Sprint customers could expect buffering delays or degraded HD video.

Many customers contemplating switching to the All-In plan considered the speed throttle a deal-breaker and let Sprint know through its social media accounts. Even websites friendly to Sprint were very critical of the plan:

Sprint 4G Rollout Updates:

We just aren’t seeing the new and innovative thing with All In. You already have plans that price out the same way as All In (some even less expensive). It appears as a marketing gimmick that is disguising a desperate move to limit streaming. This is not popular with your current customers and your new customers are likely going to hate you for it. After they find out.
.
Marcelo, it’s really bad that David Beckham touts unlimited movie watching and you reference unlimited watching videos in your Press Release. 600kbps video streaming can hardly run any YouTube or Netflix streaming. It will buffer significantly even with the lowest resolution settings. 600kbps is insufficient for most moderate quality video streaming on a smartphone screen.

Claure

Sprint CEO Marcelo Claure got the message and announced late yesterday the video speed throttle was gone, but general network management would remain.

“At Sprint, we strive to provide customers a great experience when using our network,” said Sprint CEO Marcelo Claure. “We heard you loud and clear, and we are removing the 600 kbps limitation on streaming video. During certain times, like other wireless carriers, we might have to manage the network in order to reduce congestion and provide a better customer experience for the majority of our customers.”

Claure has been hinting the days of unlimited data from Sprint may be coming to an end sometime in the near future. Sprint is among the last carriers that offer a truly unlimited experience, and some customers have used Sprint as a home broadband replacement and have created congestion issues as they consume hundreds of gigabytes of wireless data, which can slow Sprint’s network to a crawl in some areas. T-Mobile experienced similar issues and recently updated their terms and conditions to apply a speed throttle after 21GB of usage during a billing cycle.

Unlimited 4G LTE customers who use more than 21 GB of data in a bill cycle will have their data usage de-prioritized compared to other customers for that bill cycle at locations and times when competing network demands occur, resulting in relatively slower speeds. See t-mobile.com/OpenInternet for details.

Customers report in high volume areas speeds drop well below 1Mbps if they are temporarily sentenced to “speed jail.”

Many of those attempting to use a wireless carrier as their primary home broadband connection do not do so because of convenience or selfishness. Often, they have no other choice because they are bypassed by cable operators and not served by DSL. But it does not take too many customers to start creating problems for wireless carriers if a nearby cell tower becomes congested. Online video is probably the most bandwidth intensive application for wireless companies, especially HD video streaming. The growth of video traffic also raises questions about whether AT&T and Verizon’s efforts to move rural customers to an all-wireless phone and data platform will work well for the companies or customers.