Gov. Cuomo

Does N.Y. Gov. Andrew Cuomo support or reject the merger of Comcast and Time Warner Cable and why has an administration official been meeting behind closed doors with the companies involved?

If the merger is successful, more than 95 percent of upstate New York will be served by a single cable operator – Comcast, with little chance Verizon will mount a major challenge for video, broadband, and phone service customers outside of the areas where FiOS fiber upgrades have been announced. Although the Cuomo Administration promised an in-depth investigation into the merger, the governor has kept his own views close to the vest and has not publicly supported or opposed the transaction. But an administration official has met privately with executives of both cable companies and state regulators behind closed doors according to a new report.

According to public schedules obtained by Capital, Comcast representatives met at least three times in August with PSC members or staff in what one former commissioner called unusual circumstances.

James Larocca, a N.Y. PSC commissioner from 2008-2013, said it is not typical for officials from the governor’s office to meet with state regulators and cable executives in the same closed-door meeting.

“I did not meet with the second floor on pending matters and I’m not aware that other commissioners ever did,” Larocca said.

It is not unusual for companies with business before the Commission to meet with its staff or commissioners in ex parte conversations to set the parameters of hearings, filings, and other regulatory proceedings. All such meetings appear to have been properly disclosed by the PSC staff and the companies involved. But the fact some were held behind closed doors with a Cuomo Administration official and without public disclosure of the subjects discussed bothers some.

Susan Lerner, executive director of Common Cause New York, said what was discussed behind closed doors should be disclosed so the public can see what top state officials are saying to the cable executives.

“There are questions as to whether the PSC is a strong enough advocate for the people or the industry,” Lerner told Capital. “The agency has lost sight of its initial mission, which is to serve the public in regulating these absolutely essential services.”

Gerald Norlander at the Public Utility Law Project ponders what would happen if there were two negotiating tables discussing the merger, one public and the other secret.

“If there is a second table where views are exchange and negotiations are occurring, it doesn’t do well for transparency,” he said.

Public statements from both Comcast and the Cuomo Administration did little to clear the air.

“It was an initial meeting to discuss the public interest benefits of the transaction for New York,” a Comcast representative said in a one-sentence statement in response to questions about the meeting.

Not exactly, says the Cuomo Administration.

“The meeting was to explain the new law, the PSC’s new powers and its expanded oversight,” Cuomo spokesman Richard Azzopardi said.

As has been the case during much of the merger debate, Time Warner Cable has remained silent and has refused to comment.

The governor himself has avoided taking sides, claiming he will abide by the recommendations made by the PSC. But if true, why involve the governor’s office in the merger or meet privately with either the PSC or the companies involved?

“The state is taking a hands-on review of this merger to ensure that New Yorkers benefit,” Cuomo said in May. “The Public Service Commission’s actions will help protect consumers by demanding company commitments to strong service quality, affordability, and availability.”

Cuomo himself has received at least $200,000 in campaign contributions from Comcast and Time Warner Cable. With customer satisfaction scores for both Comcast and Time Warner Cable in the basement, lobbying has been a necessity and Time Warner Cable is one of the state’s top lobbying forces, spending $500,000 of its subscribers’ money in New York in 2013 alone. Comcast spent $60,000, despite only serving a small sliver of customers in downstate New York.

The two companies also donated a combined $500,000 to a secretive state Democratic party account which Cuomo controls. Ironically, some of that money was used to run ads celebrating Gov. Cuomo’s efforts to get money out of politics.

New York Democratic candidate Zephyr Teachout is seeking to oust Gov. Andrew Cuomo in the fall election. One of the issues she is campaigning on is Cuomo’s significant contributions from Comcast and Time Warner Cable and his apparent lack of interest in stopping the merger. At a campaign stop in Syracuse, Teachout claims Comcast will raise your rates and offer no significant benefits to New Yorkers. She’d strongly oppose the merger and media consolidation in general, if elected. WRVO Radio reports. Aug. 29, 2014 (1:26)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Teachout

Cuomo’s Democratic primary opponent Zephyr Teachout and her running mate, Tim Wu (who coined the term “Net Neutrality”) are less murky on the issue. Both strongly oppose the merger and cable industry consolidation generally and have expressed serious concern about the governor’s acceptance of hundreds of thousands of dollars in campaign contributions from both Time Warner Cable and Comcast.

Andrew Letson’s Politics Blog considers the differences between the two campaigns striking.

“It’s a sharp contrast – between the hypocritical man in office taking money from corporate interests and the candidates with integrity who are funding their campaign through largely individual donors,” Letson writes.

“[Both Wu and Teachout] have said that they would work to block the frightening Comcast-Time Warner merger, something that’s certainly on the minds of many New Yorkers,” says Letson. “What’s nice about that is that New York actually has a lot of power when it comes to this merger, so opposition from both the governor and lieutenant governor would go a long way.”

Letson is a Teachout campaign volunteer, so it is no surprise which candidate he supports.

Just one technician can bring Time Warner Cable to its knees.

Time Warner Cable broadband and on-demand television services were unavailable for about three hours this morning after routine maintenance turned into a nationwide outage that affected early risers trying to go online.

Things began to go wrong at around 4:30am ET when Time Warner Cable Internet connections began dropping across the country. The problems also affected on-demand viewing for Time Warner Cable TV customers and brought down Time Warner Cable’s own website.

The company blamed a problem with their backbone connection during routine maintenance. The company said it schedules such work for the very early morning hours to minimize customer disruptions. But once alarm clocks on the east coast began ringing, customers discovered they had no Internet service.

The outage persisted until around 6am ET, although some customers were not back online until after 7am.

Although complaints about Time Warner Cable began flooding social media networks as the sun went up, customers also used the outage as an opportunity to oppose the Comcast-Time Warner Cable merger. The outage demonstrates that a single technician making a mistake at one of the nation’s largest cable companies can disable services for millions.

Virtually every provider experiences a significant outage affecting many or most of their customers at least once a year:

This outage map depicts this morning’s service disruption at Time Warner Cable.

• 10 months ago, Comcast’s heavily promoted X1 platform suffered a national outage lasting three hours;
• In 2012, Comcast suffered a nationwide e-mail outage also lasting approximately three hours;
• AT&T U-verse went down across the country in April for more than four hours;
• Even wireless isn’t perfect: In 2012, Verizon Wireless suffered a national 4G LTE outage lasting nearly four hours.

Time Warner Cable will credit you for their outage, but only if you ask:

• Phone: 855-225-7898
• Complete the menu options to launch an Online Chat
• E-Mail: [email protected]

Meanwhile, New York Gov. Andrew Cuomo promised an investigation in a statement issued Wednesday:

Today’s widespread internet outage that has apparently impacted more than 11 million customers at Time Warner – which is based in New York – is a stark reminder that our economy is increasingly dependent on a reliable broadband network. That is one of the reasons why I pushed for a stronger standard of review for cable company mergers earlier this year.

I have directed the New York State Department of Public Service to investigate this outage as part of its review of Comcast’s proposed merger with Time Warner. The Department will also review whether the outage affected Time Warner’s provision of telephone service in any way. In addition, the Department will include its analysis of this event in its ongoing study of the telecom industry, which is exploring potential changes to the regulatory landscape pertaining to telephone, internet and cable. Dependable internet service is a vital link in our daily lives and telecommunications companies have a responsibility to deliver reliable service to their customers.

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.

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:

N.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.”

David 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.”

 

Joe 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.”

David 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.”

 

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

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

 

Joe 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.”

David 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.”

 

Joe 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.”

Comcast 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.”

 

Joe 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.

David 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.”