Comcast’s David Cohen

Comcast is an American success story, but Americans that do business with the cable giant are getting slighted by overpriced, too-slow broadband service.

In a commentary piece in the Financial Times, Edward Luce indicts the company that bought NBC-Universal for pay-for-play campaign contributions that have kept the company from much  regulatory scrutiny and free to charge whatever it likes for a service now increasingly considered a necessity.

Comcast’s key employee as far as Washington is concerned is its senior vice-president, David Cohen, who also happens to be one of President Barack Obama’s largest fundraisers.

The revolving door between Comcast in Philadelphia and the federal government in Washington is always spinning.

Of Comcast’s 121 lobbyists, 85 are former government employees, according to Open Secrets, which monitors money and politics.

“Comcast employs the royalty of K Street [lobbyists],” says Sheila Krumholz, head of Open Secrets.

In 2011, the year the FCC approved Comcast’s merger with NBCU, the company spent more than $14 million on lobbying – the ninth-highest of any US company (it ranks 49th on the Fortune 100 list).

Luce adds Meredith Atwell-Baker, a former Republican FCC commissioner, took an executive position at Comcast shortly after voting to approve the merger-buyout between the cable operator and NBC.

This month Comcast acquired the 49 percent of NBC-Universal it did not already own in a $16.7 billion transaction that got less attention at the FCC than the lunch menu at the Chinese takeout down the street.

So while Comcast enriches itself, customers are left with Internet service that is nothing to brag about.

While only 7% of the U.S. is wired for fiber broadband, more than half of South Korea and Japan can buy fiber-fast broadband service from a range of broadband suppliers. Back home, Comcast and the local phone company have built a comfortable duopoly:

The company’s meteoric rise in the past decade parallels the relative decline of Internet service in the US. In the late 1990s the US had the fastest speeds and widest penetration of almost anywhere – unsurprisingly given that it invented the platform. Today the US comes 16th, according to the OECD, with an average of 27 megabits per second, compared with up to quadruple that in countries such as Japan and the Netherlands.

The contrast on price is just as unflattering. The average US cost for 1 Mbps is $1.10 compared with $0.42 in the UK, $0.34 in France and $0.21 in South Korea. It is not only places such as Hong Kong that put the US into the shade. Countries such as Estonia, Portugal and Hungary offer a significantly better Internet service. South Koreans joke that when they visit the US they are taking an Internet vacation. Yet bringing the US up to speed appears to be low on Mr Obama’s list of priorities (it did not even get a mention in his State of the Union address last month).

AT&T has announced its intention to acquire the last remaining pieces of Alltel that were left behind after Verizon Wireless acquired most of the company in 2008.

AT&T will pay $780 million in cash to Atlantic Tele-Network, Inc., and add 585,000 Alltel customers to the AT&T family in six states: Idaho, Ohio, Illinois, Georgia, and North and South Carolina.

Prior to the Verizon sale, Alltel used to operate in 34 states, targeting small and medium sized cities. The company was well-regarded for its innovative plans and features that distinguished it from its larger rivals. Among them: Alltel Family Finder helped parents keep track of children, My Circle allowed customers to make and receive unlimited free calls to and from any number in a calling circle, including landlines, and U Prepaid offered customers the chance to make unlimited calls to one number of their choice.

Alltel’s cellular network is based on CDMA technology, incompatible with AT&T’s GSM network. Alltel subscribers are expected to receive credit towards the purchase of new GSM equipment as Alltel’s network is retired.

AT&T says its acquisition will allow Alltel customers to enjoy a better wireless experience and also benefit AT&T customers who roam in Alltel service areas. But customers will likely lose access to Alltel’s service plans and will eventually be asked to choose a different plan from AT&T, potentially at a higher price.

The acquisition further reduces competition in the American wireless marketplace.

Comcast Corporation has announced its intention to pay $150 million for part-ownership of Arris Group, Inc., which manufacturers set top boxes and cable modems.

Comcast will own 10.6 million shares of Arris when the deal is complete.

The investment comes at the same time Arris is completing its acquisition of Motorola Home Business, which has been a major supplier of cable equipment for years.

With the investment, Comcast is signaling its intent to remain committed to Arris and Motorola brand equipment, but also more strongly influence its future development.

Cable operators have often griped about proprietary software powering set top boxes and the cost of buying and maintaining equipment. Many operators plan to leverage their broadband networks to develop new, cloud-based software to improve the user experience and reduce the cost of equipment.

“This investment by one of our largest customers is a strong indication of customer support for the Motorola Home acquisition and its potential to accelerate innovation to the benefit of the industry and consumers,” said Bob Stanzione, Arris chairman and CEO.

Mountain Cablevision was owned by Shaw Communications but has been purchased by Rogers.

Rogers Communications, already Canada’s largest mobile-phone company, will grow even larger with the acquisition of Shaw Communications’ unused wireless spectrum and a Shaw-owned cable company making inroads in Rogers’ backyard in southwestern Ontario.

Rogers has agreed to pay $300 million for the spectrum and $400 million for Hamilton, Ont.-based Mountain Cablevision, Ltd. In return, Shaw will acquire a one-third interest in Rogers’ TVtropolis network.

Shaw is getting a premium price for the wireless spectrum it acquired in 2008 for $190 million. Shaw, like many American cable companies, originally planned to launch competing mobile phone service but aborted the effort in 2011, deciding to invest in its broadband service and construct a Wi-Fi network in western Canada instead.

Rogers CEO Nadir Mohamed told Bloomberg News the spectrum is needed to meet growing demands from Canadian wireless broadband customers.

“The wireless business is defined by what I would describe as an explosion in terms of usage,” Mohamed said. The new spectrum “will help us meet that demand in terms of capacity and speed.”

Rogers is by no means finished acquiring spectrum. The company plans to borrow as much as $800 million to purchase more at the next Canadian spectrum auction later this year.

Time Warner Cable is expanding its footprint in the capital region of New York with the acquisition of independent Princetown Cable Company, which serves around 600 subscribers in Princetown, Duanesburg and Rotterdam in Schenectady County.

Time Warner already manages cable service for most cable subscribers around the Albany-Schenectady region, but bought Princetown Cable to further solidify its holdings.

Princetown Cable began service in 1990 serving rural areas ignored by then-dominant TCI Cable (later AT&T Cable, then Comcast).

Most customers signed up to get better reception of television signals from nearby Albany and Utica.

Princetown Cable’s lineup of around 100 channels ($82.50/month for digital cable) is dwarfed by Time Warner, and its broadband service is comparatively slow and expensive:

Time Warner Cable agreed to pay $1.2 million for the system, which breaks down to around $2,000 per subscriber.