SubscribeThe New York State Public Service Commission has once again delayed final action on Comcast’s request to acquire Time Warner Cable systems operating in the state.
The further delay was accepted by Comcast and Time Warner Cable, citing a request from the staff of the PSC.
The next scheduled date for action is at the Commission Session scheduled for Jan. 22, with a final order issued no later than Jan. 27, 2015.
Looking for civil rights groups to support your multi-billion dollar telecom merger and keep minority groups off your back?
You couldn’t do better than cutting a check to Rev. Al Sharpton, whose National Action Network (NAN) will generate form letters praising your killer deal before regulators or help garner support in Congress for more deregulation and less Net Neutrality. All it takes is a few donations and consulting fees, according to a special report published by the New York Post.
“Al Sharpton has enriched himself and NAN for years by threatening companies with bad publicity if they didn’t come to terms with him. Put simply, Sharpton specializes in shakedowns,” Ken Boehm, chairman of the National Legal & Policy Center told the Post.
“Once Sharpton’s on board, he plays the race card all the way through,” said a source who has worked with the Harlem preacher. “He just keeps asking for more and more money.”
Sharpton’s 60th birthday party bash last October at Manhattan’s Four Seasons restaurant departed from the usual friends and family oriented affair most of us would expect, as envelopes arrived from some of America’s largest corporations, including AT&T and Verizon, containing at least $1 million in donations for Sharpton’s civil rights group.
Coincidentally, that same month Sharpton co-signed a letter sent to the FCC urging the regulator to approve AT&T’s deal to buy DirecTV.
“We believe the evidence and the company’s record, as well as future impact and commitments post-merger, provide a clear and compelling basis for the FCC to determine that this merger is in the public’s best interest,” the letter said. “If approved, the combined AT&T-DirecTV will have greater incentive to deploy a state of the art Internet service and give millions of Americans a new way to access the Internet’s economic, social, and civic benefits.”
If approved, the deal would also eliminate one of AT&T’s chief competitors for pay television customers, making DirecTV part of the AT&T family.
While the money keeps rolling in, Sharpton has left taxpayers footing his bills. Sharpton himself, his nonprofit NAN, and two for-profit firms controlled by him have racked up $4.7 million in outstanding debt and tax obligations according to federal and New York State records. He owes New York taxpayers $806,875 and after not bothering to pay his personal income taxes in full, he owes $2.6 million in federal liens. Sharpton’s NAN still owes more than $800,000 to the federal government and his two for-profit ventures separately owe New Yorkers nearly $450,000.
Raising money to repay debts appears to be a major priority for Sharpton these days, and companies like Comcast covet his support of their corporate agendas.
Shortly after Comcast announced its intention to acquire NBC-Universal in late 2009, Comcast’s chief executive, Brian L. Roberts, and the head of the company’s lobbying effort, David L. Cohen, met with Sharpton and other representatives of minority groups to talk about their bid. Comcast recognized that support from minority groups would be crucial to answering the inevitable charge that giant media mergers have a tendency to reduce diversity in programming, particularly from and for minorities.
Comcast turned on its money spigot, donating at least $140,000 to Sharpton’s National Action Network. In turn, Sharpton took a sudden interest in the merger, penning letters of strong support to the FCC. Between 2008 and 2010, Comcast’s corporate foundation donated more than $3 million to 39 minority groups that wrote letters to federal regulators in support of the NBC deal. Comcast and NBC Universal also worked out an agreement with advocacy groups guaranteeing increased “minority participation in news and public affairs programming”—so long as the deal went through.
Sharpton: Comcast supporter turned Comcast-owned MSNBC host.
Few expected that Sharpton himself would be a direct beneficiary of Comcast’s gratitude after the merger was approved. Sharpton was suddenly hired (for an undisclosed amount) as host of his own MSNBC weeknight show, still on the network today.
The New York Times noticed.
“Rarely, if ever, has a cable news channel employed a host who has previously campaigned for the business goals of the channel’s parent company,” the newspaper wrote.
Since the cable company began cutting checks to the NAN, Sharpton has towed the line on Comcast’s public policy agenda.
Last July, Sharpton’s group joined several other civil rights groups (most, if not all financially supported by Comcast) complaining that enforcing Net Neutrality would “harm communities of color.”
“The groups wrote to the FCC to tell them that ‘we do not believe that the door to Title II should be opened,'” said Lee Fang in a piece that was quickly censored by a Comcast-owned news outlet. “Simply put, these groups, many of which claim to carry the mantle of Martin Luther King Jr., are saying that Comcast and Verizon should be able to create Internet slow lanes and fast lanes, and such a change would magically improve the lives of non-white Americans.”
“Just as Martin Luther King Jr.’s children have embarrassingly descended into fighting bitterly over what’s left of his estate, the civil rights groups formed to advance Dr. King’s legacy seem willing to sell out their own members for a buck,” Fang concluded.
Wheeler
The chairman of the Federal Communications Commission has foreshadowed his revised plan for Net Neutrality will include reclassification of broadband as a utility, allowing the agency to better withstand future legal challenges as it increases its oversight of the Internet.
Tom Wheeler’s latest comments came during this week’s consumer electronics show in Las Vegas. Wheeler stressed he supports reclassification of broadband, away from its current definition as an “information service” subject to Section 706 of the Telecom Act of 1996 (all two broadly written paragraphs of it) towards a traditional “telecommunications service.” Under the Communications Act of 1934, that would place broadband under Title II of the FCC’s mandate. Although at least 100 pages long, Title II has stood the test of time and has withstood corporate lawsuits and challenges for decades.
Section 706 relies almost entirely on competition to resolve disputes by allowing the marketplace to solve problems. The 1996 Telecom Act, signed into law by President Bill Clinton, sought to promote competition and end “barriers to infrastructure investment.” Broadly written with few specifics, large telecom companies have successfully argued in court that nothing in Section 706 gives the FCC the right to interfere with the marketing and development of their Internet services, including the hotly disputed issues of usage caps, speed throttling, and the fight against paid fast lanes and Internet traffic toll booths. In fact, the industry has argued increased involvement by the FCC runs contrary to the goals of Section 706 by deterring private investment.
An executive summary of a report published on the industry-funded Internet Innovation Alliance website wastes no time making that connection, stating it in the first paragraph:
Net neutrality has the potential to distort the parameters built into operator business cases in such a way as to increase the expected risk. And because it distorts the operator investment business decision, net neutrality has the potential to significantly discourage infrastructure investment. This is due to the fact that investments in infrastructure are highly sensitive to expected subscriber revenue. Anything that reduces the expectation of such revenue streams can either delay or curtail such investments.
Unfortunately for consumers, even the chairman of the FCC concedes the broadband marketplace isn’t exactly teeming with the kind of competition Section 706 envisioned to keep the marketplace in check. In fact, Wheeler suggested most Americans live with a broadband duopoly, and often a monopoly when buying Internet access at speeds of 25Mbps or greater. Further industry consolidation is already underway, which further deters new competitors from entering the market.
Net Neutrality critics, the broadband industry, and their allies on Capitol Hill have argued that adopting Title II rules for broadband will saddle ISPs with at least one hundred pages of rules originally written to manage the landline telephone monopoly of the 1930s. Title II allows the FCC to force providers to charge “just and reasonable rates” which they believe opens the door to rate regulation. It also broadly requires providers to act “in the public interest” and unambiguously prohibits companies from making “any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or services.”
Both Comcast and Verizon have challenged the FCC’s authority to regulate Internet services using Section 706, and twice the courts have ruled largely in favor of the cable and phone company. Judges have no problem permitting the FCC to enforce policies that encourage competition, which has allowed the FCC some room to insist that whatever providers choose to charge customers or what they do to manage Internet traffic must be fully disclosed. The court in the Verizon case also suggested the FCC has the authority to oversee the relationship between ISPs and content providers also within a framework of promoting competition.
DC Circuit Court
But when the FCC sought to enforce specific policies governing Internet traffic using Section 706, they lost their case in court.
Although Net Neutrality critics contend the FCC has plenty of authority to enforce Net Neutrality under Section 706, in reality the FCC’s hands are tied as soon as they attempt to implement anti-blocking and anti-traffic discrimination rules.
The court found that the FCC cannot impose new rules under Section 706 that are covered by other provisions of the Communications Act.
So what does that mean, exactly?
Michael Powell, former FCC chairman, is now the chief lobbyist for the National Cable & Telecommunications Association. (Photo courtesy: NCTA)
In 2002, former FCC chairman Michael Powell (who serves today as the cable industry’s chief lobbyist) presided over the agency’s decision to classify broadband not as a telecommunications service but an “information service provider” subject to Title I oversight. Whether he realized it or not, that decision meant broadband providers would be exempt from common carrier obligations as long as they remained subject to Title I rules.
When the FCC sought to write rules requiring ISPs not block, slow or discriminate against certain Internet traffic, the court ruled they overstepped into “common carrier”-style regulations like those that originally prohibited phone companies from blocking phone calls or preventing another phone company from connecting calls to and from AT&T’s network.
If the FCC wanted to enforce rules that mimic “common carrier” regulations, the court ruled the FCC needed to demonstrate it had the regulatory authority or risk further embarrassing defeats in the courtroom. The FCC’s transparency rules requiring ISPs to disclose their rates and network management policies survived Verizon’s court challenge because the court found that policy promoted competition and did not trespass on regulations written under Title II.
The writing on the wall could not be clearer: If you want Net Neutrality to survive inevitable court challenges, you need to reclassify broadband as a telecommunications service under Title II of the Communications Act.
Major ISPs won’t hear of it however and have launched an expensive media blitz claiming that reclassification would subject them to 100 pages of regulations written for the rotary dial era. Broadband, they say, would be regulated like a 1934 landline. Some have suggested the costs of complying with the new regulations would lead to significant rate increases as well. Many Republicans in Congress want the FCC to wait until they can introduce and pass a Net Neutrality policy of their own, one that will likely heavily tilt in favor of providers. Such a bill would likely face a presidential veto.
Suggestions the FCC would voluntarily not impose outdated or irrelevant sections of Title II on the broadband industry didn’t soothe providers or their supporters. Republican FCC commissioners are also cold to the concept of reclassification.
O’Rielly
“Title II includes a host of arcane provisions,” said FCC commissioner Michael O’Rielly in a meeting in May 2014. “The idea that the commission can magically impose or sprinkle just the right amount of Title II on broadband providers is giving the commission more credit than it ever deserves.”
Providers were cautiously optimistic in 2014 they could navigate around strong Net Neutrality enforcement with the help of their lobbyists and suggestions that an industry-regulator compromise was possible. Early indications that a watered-down version of Net Neutrality was on the way came after a trial balloon was floated by Wheeler last year. Under his original concept, paid fast lanes and other network management and traffic manipulation would be allowed if it did not create undue burdens on other Internet traffic.
Net activists loudly protested Wheeler’s vision of Net Neutrality was a sellout. Wheeler’s vision was permanently laid to rest after last November when President Barack Obama suddenly announced his support for strong and unambiguous Net Neutrality protections (and reclassifying broadband as a Title II telecommunications service), No FCC chairman would likely challenge policies directly advocated by the president that nominated him.
Obama spoke, Thomas Wheeler listened. Wheeler’s revised Net Neutrality plan is likely to arrive on the desks of his fellow commissioners no later than Feb. 5, scheduled for a vote on Feb. 26. It’s a safe bet the two Republicans will oppose the proposal and the three Democrats will support it. But chairman Wheeler also listens to Congress and made it clear he doesn’t have a problem deferring to them if they feel it necessary.
“Clearly, we’re going to come out with what I hope will be the gold standard,” Wheeler told the audience in Las Vegas. “If Congress wants to come in and then say, we want to make sure that this approach doesn’t get screwed up by some crazy chairman that comes in, [those are] legitimate issues.”
If that doesn’t work, the industry plans to take care of the Net Neutrality regulation problem itself. Hours after any Net Neutrality policy successfully gets approved, AT&T has promised to challenge it in court.
[flv]http://www.phillipdampier.com/video/Fox Business News Net Neutrality Wheeler 1-8-15.flv[/flv]
Free Press CEO Craig Aaron appeared on Fox Business News to discuss Tom Wheeler’s evolving position on Net Neutrality. (3:54)
Comcast Internet-only customers looking for speeds up to 100Mbps will pay Comcast an unprecedented $88.95 a month for a package containing the company’s Blast! broadband service with a rented cable modem.
The company has begun informing subscribers of the first of its 2015 rate increases that took effect in some areas on Jan. 1.
“We have worked very hard to hold down price adjustments, and there are no price changes for our Limited Basic ($16.10), Digital Preferred ($85.90) or Internet Essentials ($9.95) services,” said Bob Grove, Comcast’s vice president of public relations. “While we continue making investments in our network and technology to give customers more for their money, including more video across platforms, better experiences like X1 and faster Internet service, we periodically need to adjust prices due to increases we incur in programming, business costs and new technology. On average, nationally, the customer bill will increase by 3.4 percent.”
Some will pay more than others. Here is a sample:
Cable television customers face an increase of more than 100% for the company’s Broadcast TV surcharge introduced in 2013. In most areas, the fee is rising from $1.50 per month to $3.25. A previously announced $2 increase in modem rental charges will raise the cost of using Comcast-supplied equipment including Comcast’s Gateway to $10 a month.
Comcast is also introducing a new compulsory regional sports network surcharge of $1 a month for all XFINITY TV packages starting with Digital Starter and higher tiers and XFINITY 450 Latino.
Customers with analog-only televisions using a DTA converter box to handle digital cable television channels on these older sets face an even more dramatic price hike. Customers that used to pay as little as $0.50 for Digital Adapter Additional Outlet Service will now pay $2.99 a month.
Premium channels such as HBO have seen price reductions, possibly in response to declining subscriber numbers. HBO drops to $15 a month and all other premiums decrease to $12 a month.
Comcast customers looking for the biggest bang for their buck should consider bundled service packages which discount Internet, television, and telephone service. Current customers should also consider letting Comcast know they are shopping the competition for a better deal. Ask them to lower your rates if they want you to stay.
Comcast has added a prominent warning to the Internet sales pitches on their website:
“An XFINITY Internet Data Usage Plan may apply,” appears when visitors click the “Learn More” button under each Internet offer.
In the past, Comcast notified affected customers on a regional level based on the locations where usage billing trials are underway. Now the disclaimer is prominently visible for every Comcast customer nationwide.
For now, these trials still apply only to XFINITY Internet customers in Huntsville and Mobile, Alabama; Tucson, Arizona; Atlanta, Augusta and Savannah, Georgia; Central Kentucky; Maine; Jackson, Mississippi; Knoxville, Nashville and Memphis, Tennessee; and Charleston, South Carolina.
In all trial markets except Tucson, the usage allowance included with all XFINITY Internet tiers is 300GB per month. The overlimit fee is $10 for each 50GB used above the usage cap.
In the Tucson, Arizona market, the usage allowance included with Economy Plus through Performance Internet tiers is 300GB. Those customers subscribed to the Blast! Internet tier have received an increase in their data usage plan to 350GB; Extreme 50 customers have received an increase to 450GB; Extreme 105 customers have received an increase to 600GB. The overlimit fee remains the same — $10 for each block of 50GB used above your allowance.
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