Broadband will be critically impacted by any merger of Comcast and Time Warner Cable in New York. The two companies could not be more different in their philosophies regarding access, pricing, and speeds.

This merger will have an especially profound impact on broadband service in upstate New York, largely left behind out from getting Verizon’s fiber upgrades. New York’s digital economy critically needs modern, fast, and affordable Internet access to succeed. Verizon has not only ceased expansion of its FiOS fiber to the home network in New York, it has virtually capitulated competing for cable customers in non-FiOS areas by agreeing to sell Time Warner Cable service in its wireless stores.[1]  In cities like Rochester, served by Frontier Communications’ DSL, Time Warner Cable is the only provider in town that can consistently deliver broadband speeds in excess of 10Mbps.

Time Warner Cable has never been the fastest Internet provider and had a history of being slower than others to roll out speed increases. But it is also the only cable provider in the country that experimented with usage caps and consumption billing and shelved both after subscribers bitterly complained in market tests in cities including Rochester.[2]

Then CEO Glenn Britt announced the end of the usage cap trial just two weeks after it became public.[3] Britt would later emphasize that he now believed there should always be an unlimited use plan available for Time Warner Cable customers who do not want their Internet use metered.[4] In study after study, the overwhelming majority of customers have shown intense dislike of limitations on their Internet usage, whether from strict usage caps Comcast maintained for several years or usage allowances that, when exceeded, would result in overlimit fees.[5] Just this month, the Government Accounting Office confirmed these findings in a new study that reported near-universal revulsion for usage caps on home wired broadband service:[6]

In only two groups did any participants report experience with wireline UBP [usage-based pricing].

However, in all eight groups, participants expressed strong negative reactions to UBP, including concerns about:

• The importance of the Internet in their lives and the potential effects of data allowances.
• Having to worry about data usage at home, where they are used to having unlimited access.
• Concerns that ISPs would use UBP as a way of increasing the amount they charge for Internet service.

Time Warner Cable has learned an important lesson regarding consumer perception of usage-based billing and usage caps on Internet service. In 2012, the company introduced optional usage caps for customers interested in a discount on their broadband service. Out of 11 million Time Warner Cable broadband customers, only a few thousand have been convinced in enroll such programs.[7]

Despite results like that, Comcast has not learned that lesson and has twice imposed unilateral, compulsory usage limits on their broadband customers, starting with a nationwide hard usage cap of 250GB per month introduced in 2008. Violators risked having their broadband service terminated by Comcast.[8] Today, for some that would be comparable to losing electricity or telephone service. The threat has profound implications in areas where Comcast is the only broadband provider.

Comcast temporarily rescinded its cap in May 2012, but has gradually reintroduced various forms of usage-related billing and caps with market trials in several Comcast service areas[9]:

Nashville, Tennessee: 300 GB per month with $10/50GB overlimit fee;

Tucson, Arizona: Economy Plus through Performance XFINITY Internet tiers: 300 GB. Blast! Internet tier: 350 GB; Extreme 50 customers: 450 GB; Extreme 105: 600 GB. $10 per 50GB overlimit fee;

Huntsville and Mobile, Alabama; Atlanta, Augusta and Savannah, Georgia; Central Kentucky; Maine; Jackson, Mississippi; Knoxville and Memphis, Tennessee and Charleston, South Carolina: 300 GB per month with $10/50GB; XFINITY Internet Economy Plus customers can choose to enroll in the Flexible-Data Option to receive a $5.00 credit on their monthly bill and reduce their data usage plan from 300 GB to 5 GB. If customers choose this option and use more than 5 GB of data in any given month, they will not receive the $5.00 credit and will be charged an additional $1.00 for each gigabyte of data used over the 5 GB included in the Flexible-Data Option;

Fresno, California, Economy Plus customers also have the option of enrolling in the Flexible-Data Option.

Comcast customers in these areas do not have the option of keeping their unlimited-use broadband accounts. Despite the fact Comcast executive vice president David Cohen refers to these as “data thresholds,” they are in fact de facto limits that carry penalty fees when exceeded.[10]

Cohen predicts these usage limits will be imposed on all Comcast customers nationwide within the next five years.[11] Time Warner Cable has committed not to impose compulsory limits on its broadband customers. Verizon has never attempted to place limits on its home broadband customers. Frontier shelved a usage limit plan of 5GB per month attempted in 2008 and currently provides unlimited service.

Comcast CEO Brian Roberts sat for an interview with CNBC in June in which he implied usage growth was impinging on the viability of its broadband business, justifying usage caps. At the end of the interview, Time Warner Cable ran advertising emphasizing it has no usage caps.[12] Both companies have highly profitable broadband services, as do other providers across the country.[13]

As our group has found, usage caps and consumption billing on cable Internet and DSL are little more than a transparent rate increase and anti-competitive maneuver to restrict the growth of the industry’s biggest potential competitor: online video. If a consumer can stream all of their video programming over a broadband account, there is no reason to retain a cable TV package. Comcast’s usage cap provides a built-in deterrent for customers contemplating such a move.

While a Comcast representative offered (without any independent verification) that the average Comcast broadband user consumes fewer than 20GB of data per month, Sandvine released evidence in its Global Internet Phenomena Report 1H2014 study that cord-cutters in the U.S. – at least those whose usage indicates the use of streaming as a primary form of entertainment – now consume about 212GB of data per month (with 153GB of that going toward “real-time entertainment usage”).[14]

That would put many customers perilously close to Comcast’s current market tested usage allowance.

Approving the transfer of franchises from Time Warner Cable to Comcast has the potential of saddling the majority of New York residents with usage caps and/or consumption billing with little or no savings or benefit to the consumer while introducing a major impediment to potential online video competition to help curtail cable television pricing.

—

[1]http://www.verizonwireless.com/wcms/page-unavailable.html?e=404&req=/home-services/twc.html

[2]https://www.reuters.com/article/us-timewarnercable/time-warner-cable-shelves-broadband-usage-billing-idUSTRE53F6EQ20090416

[3]http://stopthecap.com/2009/04/16/we-won-time-warner-killing-usage-caps-in-all-markets/

[4]https://newsroom.charter.com/

[5]

[6]

[7]http://stopthecap.com/2014/03/13/time-warner-cable-admits-usage-based-pricing-is-a-big-failure-only-thousands-enrolled/

[8]https://arstechnica.com/uncategorized/2008/08/its-official-comcast-starts-250gb-bandwidth-caps-october-1/

[9] 

[10] 

[11]https://techcrunch.com/2014/05/14/comcast-wants-to-put-data-caps-on-all-customers-within-5-years/

[12]http://stopthecap.com/wp-content/uploads/2014/04/nocaps.png

[13]https://gigaom.com/2014/02/12/comcast-and-time-warner-cable-forget-tv-it-is-all-about-broadband/

[14]http://www.multichannel.com/news/technology/cord-cutters-gobble-down-bits-sandvine-study/374551#sthash.JYFP7o69.dpuf

“Hey look, is that the Verizon FiOS truck?”

New York City comptroller Scott Stringer is lukewarm at best about the idea of Comcast taking over for Time Warner Cable. In a letter to the New York Public Service Commission released today, Stringer says the deal needs major changes before it comes close to serving the public interest.

“As New York City residents know all too well, our city is stuck in an Internet stone age, at least when compared to other municipalities across the country and around the world,” Stringer wrote. “According to a study by the Open Technology Institute at the New America Foundation, New Yorkers not only endure slower Internet service than similar cities in other parts of the world, but they also pay higher prices for that substandard service. Tokyo residents enjoy speeds that are eight times faster than New York City’s, for a lower price. And Hong Kong residents enjoy speeds that are 20 times faster, for the equivalent price.”

Stringer should visit upstate New York some time. While the Big Apple is moving to a Verizon FiOS and Time Warner Cable Maxx or Cablevision/Optimum future, upstate New York is, in comparison, Raquel Welch-prehistoric, especially if your only choice is Verizon “No, We Won’t Expand DSL to Your House,” or Frontier “3.1Mbps is Plenty” Communications. If New York City’s speeds are slow, upstate New York speeds are glacial.

“The latest data from the FCC shows that, as of June 30, 2013, over 40 percent of connections in New York State are below 3Mbps,” Springer added.

Come for the Finger Lakes, but don’t stay for the broadband.

Should the merger be approved, Comcast would be obligated to comply with the existing franchise agreement between Time Warner Cable and the City of New York. However, in order for the proposed merger to truly be in the public interest, Comcast must have a more detailed plan to address these ongoing challenges and to further close the digital divide that leaves so many low-income New Yorkers cut off from the information superhighway. To date, Comcast’s efforts to close the digital divide have focused on its “Internet Essentials” program, which was launched in 2012.iii The program offers a 5 megabit/second connection for $9.95/month (plus tax) to families matching all of the following criteria:

• Located within an area where Comcast offers Internet service
• Have at least one child eligible to participate in the National School Lunch Program
• Have not subscribed to Comcast Internet service within the last 90 days
• Does not have an overdue Comcast bill or unreturned equipment

While the aim of the program is laudatory, its slow speed, limited eligibility, and inadequate outreach have kept high-quality connectivity beyond the reach of millions of low-income Americans. Not only are the eligibility rules for Internet Essentials far too narrow, but the company has done a poor job of signing up those who do meet the criteria. In fact, only 300,000 (12 percent) of eligible households nationwide have actually signed up since the program was launched in 2011.

It is critical that the PSC not only press Comcast to significantly expand the reach of Internet Essentials, but also that it engage in appropriate oversight to ensure that the company is meeting its commitments to low-income residents of the Empire State.

Phillip “Comcast isn’t the answer, it’s the problem” Dampier

In fact, the best way New York can protect its low-income residents is to keep Comcast out of the state. Time Warner Cable offers everyday $14.99 Internet access to anyone who wants it as long as they want it. No complicated pre-qualification conditions, annoying forms, or gotcha terms and conditions.

When a representative from the PSC asked a Comcast representative if the company would keep Time Warner’s discount Internet offer, a non-answer answer was the response. That usually means the answer is no.

“We have seen how telecommunications companies will promise to expand access as a condition of a merger, only to shirk their commitments once the merger has been approved,” Springer complained. “For instance, as part of its 2006 purchase of BellSouth, AT&T told Congress that it would work to provide customers ‘greater access and more choices for broadband, no matter where they live or work.’ However, later reports found that the FCC relied on the companies themselves to report their own merger compliance and did not conduct independent audits to verify their claims.”

Big Telecom promises are like getting commitments from a cheating spouse. Never trust… do verify or throw them out. Comcast still has not met all the conditions it promised to meet after its recent merger with NBCUniversal, according to Sen. Al Franken (D-Minn.).

Stringer also blasted Comcast for its Net Neutrality roughhousing:

While the FCC has not declared internet providers to be “common carriers”, state law has effectively done so within the Empire State. Under 16 NYCRR Part 605, a common carrier is defined as “a corporation that holds itself out to provide service to the public for hire to provide conduit services including voice, data, or video by electrical, electronic, electromagnetic or photonic means.”

Importantly, the law requires these carriers to “provide publicly offered conduit services on demand to any similarly situated user on substantially similar terms, subject to the availability of facilities and capacity.”

In recent months, Comcast has shown that it is willing to sacrifice net neutrality in order to squeeze additional payment out of content providers, such as Netflix. As shown in the chart below, Netflix download speeds on the Comcast network deteriorated rapidly prior to an agreement whereby Netflix now pays Comcast for preferential access.

Consumers have a legitimate fear that if access to fiber-optic networks is eventually for sale to the highest bidder, then not only will it stifle the entrepreneurial energy unleashed by the democratizing forces of the Internet, but will also potentially lead to higher prices for consumers in accessing content. Under that scenario, consumers are hit twice—first by paying for Internet access to their home and second by paying for certain content providers’ preferred access.

Internet neutrality has been a core principle of the web since its founding and the PSC must examine whether Comcast’s recent deal with Netflix is a sign that the company is eroding this principle in a manner that conflicts with the public interest.

Stringer may not realize Comcast also has an end run around Net Neutrality in the form of usage caps that will deter customers from accessing competitors’ content if it could put them over their monthly usage allowance and subject to penalty rates. Comcast could voluntarily agree to Net Neutrality and still win by slapping usage limits on all of their broadband customers. Either causes great harm for competitors like Netflix.

“I urge the Commission to hold Comcast to that burden and to ensure that the merger is in the best interest of the approximately 2.6 million Time Warner Cable subscribers in New York State and many more for whom quality, affordable Internet access remains unavailable,” Stringer writes. “And I urge Comcast to view this as an opportunity to do the right thing by introducing itself to the New York market as a company that values equitable access and understands that its product—the fourth utility of the modern age—must be available to all New Yorkers.”

If Comcast’s existing enormous customer base has already voted them the Worst Company in America, it is unlikely Comcast will turn on a dime for the benefit of New York.

The best way to ensure quality, affordable Internet access in New York is to keep Comcast out of New York.

No cable company has ever resolved the rural broadband problem. Their for-profit business model depends on a Return on Investment formula that prohibits expanding service into unprofitable service areas.

These rural service problems remain pervasive in Comcast areas as well, and always have since the company took over for AT&T Cable in the early 2000s. Little has changed over the last dozen years and little will change in the next dozen if we depend entirely on companies like Comcast to handle the rural broadband problem.

A more thoughtful solution is encouraging the development of community co-ops and similar broadband enterprises that need not answer to shareholders and strict ROI formulas.

In the meantime, for the good of all New York, let’s keep Comcast south (and north) of the border, thank you very much.

Plan on downgrading your Rogers cable, phone or Internet service? Be ready for messages injected into your web browsing sessions by the cable company trying to win back your business.

Daryl Fritz from Toronto decided to cancel his Rogers’ home phone and television service and downgrade his Internet service. Fritz soon found this banner intruding on every web page he tried to visit:

Your decision to leave Rogers is not something we take lightly. We value your business and care about how happy you are with your Rogers experience, so we would like to extend a special offer* in the hope that you will reconsider your decision. Please call 1-855-410-7589 (M-F 9am-9pm/Sat 10am-6pm ET) before your service disconnects to let us know why you are thinking of leaving Rogers. We appreciate your time and consideration. Please click on the “X” in the top right hand corner to acknowledge that you have received this message.

*-Offer available for a limited time for the account indicated (non-transferable) and subject to change without notice.

The banner usually disappears after the customer acknowledges receiving it. Stop the Cap! has learned the number directs callers to Rogers’ customer retention department where customers are pitched special discounts to change their mind. The prices are comparable, if not better, than new customer promotions found on Rogers’ website. Rogers is far less annoying than Comcast is when it faces losing a customer. If a customer rejects the offer (or never calls in to hear one), they are not bothered any longer and the representative thanks them for their time.

Rogers retention offers are often extremely aggressively priced, especially if mentioning you are leaving for a competitor (especially Bell). Rogers reps can slash prices, put you on a high usage broadband plan at prices lower than what regular customers pay for slower speeds, waive usage caps for a few dollars more, lock in rates for up to eight years, and offer heavy discounts off almost everything.

One current example for cable television:

• 30% off basic cable ($28/mo instead of $40)
• TFC ($15/mo)
• NextBox 2.0 set-top (free) NextBox 3.0 ($2.50/mo)
• Digital Services Fee (eliminated)
• CRTC LPIF (it’s the government — $0.50/mo)

This can knock your Rogers cable bill down to $46/month before GST and other taxes.

Broadband customers can grab a 50% discount off plans like Hybrid Fibre 150 (GTA), normally $86 a month, but $43 on a retention plan. Customers get 150Mbps and 350GB of usage. If you don’t want a cap, demand a deal to remove it (it regularly costs $25/month extra for unlimited). The modem rental is included.

If you still want Rogers Home Phone, you are paying too much if it costs over $20 a month. Home Phone Favourites, including Call Display and one other calling feature of your choice is $15/month on retention. Add 500 long distance minutes for $5/month extra.

All three services combined should cost no more than about $104 a month before GST, which adds $13.52 in Ontario. Provincial taxes vary.

New Rogers customers can also get very aggressively priced deals. This week Rogers is selling 30/5Mbps Internet service (includes 270GB allowance and free modem) for $54.95. Regularly, it’s $61.99 with only a 70GB monthly usage allowance. That is still outrageously high by American standards, but isn’t bad for Rogers. New customers should call 1-800-605-6678 to ask about current offers.

Nearly 10 percent of GCI’s revenue is now earned from overlimit fees collected from Alaskan broadband customers who exceed their cable or wireless usage limits.

GCI is Alaska’s largest cable operator and for many it is the only provider able to deliver stable speeds of 10Mbps+, especially to those who live too far away for comparable DSL speeds from ACS, one of GCI’s largest competitors.

The result has given GCI a de facto monopoly on High Speed Internet (10+ Mbps) access, a position that has allowed the company to dramatically raise prices and slap usage limits on broadband users and charge onerous overlimit fees on those who exceed their allowance.

GCI already charges some of the highest broadband service prices in the country and has insisted on imposing usage caps and overlimit fees on even its most expensive plans, creating high profits for them and enormous bills for customers who have no reliable way to consistently track their usage. GCI’s suspect usage meter is often offline and often delivers usage estimates that customers insist are far from accurate. GCI says it has the last word on the accuracy of that meter and has not submitted its meter to independent testing and verification by a local or state regulatory body specializing in measurement accuracy.

GCI also makes it extremely difficult for customers to understand what happens after customers exceed their usage limits. The website only vaguely offers that overlimit fees vary from “$.001 (half penny) to $.03 (three cents) per MB,” which is factually inaccurate: $.001 does not equal a half-penny. It can equal bill shock if a customer happens to be watching a Netflix movie when their allowance runs out.

KC D’Onfro of Bethel subscribes to GCI’s Alaska Extreme Internet plan, which in February cost $100 a month for 4/1Mbps service with a 25GB usage cap. While that allowance is plenty for the countless e-mails GCI promises you can send, any sort of streaming video can chew through that allowance quickly.

Business Insider explains what happened:

One fateful night, she and her roommate decided to watch a movie on Netflix. Both of them fell asleep halfway through, but the movie played ’til the end, eating up two GBs of data too many and consequently doubling their bill for that month. (One hour of HD video on Netflix can use up to 2.3 GB of data.)

“Now, I don’t even consider Netflix until near the very end of the month, and I have to be sure that I’m no more than three-fourths of the way into my total data, at the absolute most,” KC says. (Her provider, a company called GCI, allows subscribers to view their daily usage and sends them a notice when they’ve hit 80%.) “It’s a very serious business – I have to poll people to figure out what that one very special movie should be.”

That left the D’Onfro family with a $200 broadband bill – $100 for the service and an extra $100 overlimit fee for that single Netflix movie. Today, GCI demands $114.99 a month for that same plan (with the same usage allowance) and those not subscribing to their TV service also face a monthly $11.99 “access fee” surcharge for Internet-only service.

“Many Alaska consumers have brought their GCI broadband bills to ACS for a comparative quote, providing dozens of examples of GCI overage charges,” said Caitlin McDiffett, product manager of Alaska Communications Systems (ACS), the state’s largest landline phone company. “Many of these examples include overage charges of $200 to $600 in a single month. In one instance, a customer was charged $1 ,200 in overage fees.”

GCI also keeps most customers in place with a 24-month contract, making it difficult and costly to switch providers.

McDiffett told the FCC the average Alaskan with a Netflix subscription must pay for at least a 12Mbps connection to get the 60GB usage allowance they will need to watch more than two Netflix movies a week in addition to other typical online activities. GCI makes sure that costs average Alaskans real money.

“A customer purchasing 12Mbps for standalone (non-bundled) Home Internet from GCI pays $59.99 per month plus an $11.99 monthly “access” fee for a total of $71.98 per month with a 60GB usage limit ($0.004/MB overage charge),” reports McDiffett. “Thus, the monthly bill for this service is more typically $76.98, including a $5.00 overage charge. To purchase a service with a usage limit of at least 100GB per month, a GCI customer would have to pay $81.98 per month (the $69.99 standalone rate plus $11.99 monthly access fee), subject to an overage charge of $0.003/MB.”

Rural Alaskans pay even more when using GCI’s expensive wireless ISP.

Regular Alaskan Stop the Cap! reader Scott reports that no matter what plan you choose from GCI, they are waiting and ready to slap overlimit fees on you as soon as they decide you are over your limit.

Their super-deluxe re:D service — up to 200Mbps, now available in Anchorage, MatSu, Fairbanks, Juneau, Kenai, Ketchikan, Sitka, and Soldotna areas, is not cheap.

“It’s a whopping $209.99 + taxes, and if you don’t have cable TV service bundled, the $11.99 monthly access fee also applies,” Scott says.

For that kind of money, one might expect a respite from the usage meter,  but not with GCI.

“As a top tier service, you’d think they could just offer it as ’unlimited’ at that rate,” Scott says. “Actually, it has a 500GB usage cap and $.50/GB overage fee. Again, we have a metering provider who claims the overages were to penalize bandwidth hogs, yet then offer [faster] service, increasing overall load on their network, instead of just offering a fair amount of bandwidth per customer and eliminating overages by offering unlimited usage.”

One of ACS’ strong selling points is no data caps, but DSL isn’t available to everyone.

In a filing with the FCC, ACS’ McDiffett suspects usage caps are all about the money.

“GCI reported 2012 Home Internet revenue of $86 million of which $7.9 million (nearly ten percent) was derived from overage charges,” said McDiffett. “On average, about $5 per customer per month can be attributed to GCI overage charges. GCI imposes usage limits or data caps at every level of Home Internet service, from its 10 Mbps service (10GB limit, $0.005/MB overage charge) to its 100 Mbps service (500GB limit, $0.0005/MB overage charge).”

Over time, and after several cases of bill shock, Alaskan Internet customers have become more careful about watching everything they do online, fearing GCI’s penalties. That threatens GCI’s overlimit revenue, and now Stop the Cap! readers report sudden, long-lasting problems with GCI’s usage checker, often followed by substantial bills with steep overlimit penalties they claim just are not accurate.

“I currently pay $184.99 a month for GCI‘s highest offered broadband service. 200/5Mbps, with a 500GB monthly data cap,” shares Stop the Cap! reader Luke Benson. “According to GCI, over the past couple months our usage has increased resulting in overage charges at $1.00 a GB.”

In May, Benson was billed $130 in overlimit fees, but after complaining, the company finally agreed to credit back $100. A month later, they recaptured $60 of that credit from new overlimit fees. This month, Benson would have to unplug his modem halfway through his billing cycle or face another $50 in penalties.

GCI’s bandwidth monitor has proved less than helpful, either because it is offline or reports no usage according to several readers reaching out to us. GCI’s own technical support team notes the meter will not report usage until at least 72 hours after it occurs. GCI itself does not rely on its online usage monitor for customer billing. Customer Internet charges are measured, calculated, and applied by an internal billing system off-limits for public inspection.

“I have reached out to GCI multiple times asking for help, suggestions, resolution,” complains Benson. “All I get told is to turn down the viewing quality of Netflix, don’t allow devices to auto update, etc. They pretty much blamed every service but their own.”

Other customers have unwittingly fallen into GCI’s overlimit fee trap while running popular Internet applications that wouldn’t exist if GCI’s caps and overlimit fees were common across the country. Lifelong Bethel resident and tech consultant John Wallace knows the local horror stories:

• Two girls had unwittingly allowed Dropbox to continuously sync to their computers, racking up a $3,500 overcharge in two weeks;
• One user’s virus protection updater got stuck on and it cost him $600;
• Wallace has heard people say, “I was gaming and I got a little out of hand and I had to pay $2,800;”
• Two six-year-old girls ran up $2,000 playing an online preschool game. Mom was totally unaware of what was going on, until she got the bill.

GCI’s own Facebook page was the home of a number of customer complaints until the complaint messages mysteriously disappeared. Stop the Cap! itself discovered it was not allowed to even ask questions on the company’s social media pages, apparently already on their banned list.

“It’s about equal access and opportunity,” Wallace told Business Insider. “The Internet was meant to improve the lives of people in rural Alaska, but – because of the data caps and the sky-high overage fees – it ends up costing them huge amounts of money. We have one of the highest unemployment rates in the nation, and some of the highest rates of suicide, sexual assault, and drug abuse. The people who can’t afford it are the ones that are getting victimized.  It was supposed to bring access – true availability of goods and services – but it really just brought a huge bill that many can’t afford.”

Phillip “I got whiplash just watching” Dampier

A former policy director at the Federal Trade Commission and antitrust attorney at the U.S. Justice Department has managed an impressive 180 in just a few short months regarding the merger of Time Warner Cable and Comcast.

In February, David Balto told TheDeal the proposed takeover of Time Warner Cable “is a bad deal for consumers.” Today, Mr. Balto’s panoply of guest editorials, media appearances and columns — suddenly in favor of the merger — are turning up in the New York Times, the Orlando Sentinel, Marketplace, WNYC Radio, and elsewhere.

Balto’s arguments are based on “research” which, in toto, appears to have been limited to thumbing through Comcast’s press releases and merger presentation. That was enough:

First, this deal should create benefits for Time Warner customers, who will gain a significantly faster Internet and more advanced television service.

Second, competition is increasing in both the pay-TV and broadband businesses. Ninety-eight percent of viewers have a choice of three or more multichannel services, plus growing options online. Yahoo just announced a new video service, joining Netflix, Amazon and YouTube. In the last five years, cable has lost about seven million customers, satellite has gained nearly two million, and the telecommunications companies have gained six million.

Third, Comcast’s post-merger share of broadband falls closer to 20 percent when including LTE wireless and satellite providers. Over all, 97 percent of households have at least two competing fixed broadband providers — three or more if mobile wireless is included.

We used to wonder why government officials and regulators were so easily fooled by the corporate government relations people sent into their offices armed with press releases, talking points, cupcakes, and empty promises. We understand everyone isn’t a Big Telecom expert, but too often regulators’ reflexive acceptance of whatever companies bring to their table threatens to win them rube-status. We’d like to think Mr. Balto isn’t Comcast’s sucker, and we certainly hope there are no unspoken incentives on the table in return for his recent, very sudden conversion to celebrate all-things Comcast. Maybe he’s simply uninformed.

Balto

Although our regular readers — nearly all consumers and customers — are well-equipped to debunk Mr. Balto’s arguments, for the benefit of visitors, here is our own research.

First, Comcast’s Internet service is not faster than Time Warner Cable. Mr. Balto needs to spend some time away from Comcast’s merger info-pack and do some real research. He’ll find Time Warner Cable embarked on a massive upgrade program called TWC Maxx that is more than tripling broadband speeds for customers at no extra charge. Those speeds are faster than what Comcast offers the average residential customer, and come much cheaper as well. Oh, and TWC has no compulsory usage limits and overlimit penalties. Comcast’s David Cohen predicts every Comcast customer will face both within five years.

Second, that “advanced TV platform” Balto raves about requires a $99 installation fee… for an X1 set-top box. It also means equipment must be attached to every television in the house, because Comcast encrypts everything. At a time when customers want to pay for fewer channels, Comcast wants to shovel even more unwanted programming and boxes at customers. Older Americans who want their Turner Classic Movies have another nasty surprise. They will need to buy Comcast’s super deluxe cable TV package to get that network, at a cost exceeding $80 a month just for television. Ask Time Warner customers what they want, and they’ll tell you they’d prefer old and decrepit over an even higher cable TV bill Comcast has already committed to deliver.

Has competition truly increased? Not in the eyes of most Americans who at best face a duopoly and annual rate hikes well in excess of inflation. Even worse, for most consumers there is only one choice for 21st century High Speed Internet service – the cable company. Mr. Balto conveniently ignores the fact cable’s primary competitor is still DSL which is simply not available at speeds of 30+Mbps for most consumers. In some areas, like suburban Rochester, N.Y., the best the local phone company can deliver some neighborhoods like ours is 3.1Mbps. That isn’t competition. Verizon and AT&T have both stopped expanding DSL. Verizon has ended FiOS expansion and AT&T’s U-verse still maxes out at around 24Mbps for most customers. AT&T’s promised fiber upgrades have proven to be more illusory than reality, available primarily in a handful of multi-dwelling units and new housing developments. In rural areas, both major phone companies are petitioning to do away with landline service and DSL altogether.

Raise your hands if you want Comcast’s “benefits.” In New York, out of 2,300 comments before the PSC, we can’t find a single one clamoring for Comcast’s takeover. The public has spoken.

Cable “competition” in Minneapolis. Charter and Comcast have also teamed up to trade cable territories as part of the Time Warner Cable merger package deal.

Satellite television’s days of providing the cable industry with robust competition have long since peaked. AT&T is seeking to further reduce that competition by purchasing DirecTV, not because it believes in satellite television, but because it wants the benefits of DirecTV’s lucrative volume discounts.

Any antitrust attorney worth his salt should be well aware of what kind of impact volume discounting can have on restraining and discouraging competition. Comcast’s deal for Time Warner will let it acquire programming at a substantial discount (one they have already said won’t be passed on to customers) so significant that any would-be competitors would be in immediate financial peril trying to compete on price.

Frontier Communications learned that lesson when it acquired a handful of Verizon FiOS franchises in Indiana and the Pacific Northwest. After losing Verizon’s volume discounts, Frontier was so alarmed by the wholesale renewal rates it received, it let loose its telemarketing force to convince customers fiber was no good for television and they should instead switch to a satellite provider they partnered with. It’s telling when a company is willing to forfeit revenue in favor of a third party marketing agreement with an outside company.

So what does this mean for a potential start-up looking to get into the business? Since programming is now a commodity, most customers buy on price. The best triple-play deals will go to the biggest national players with volume discounts – all cable operators that have long agreed never to compete directly with each other.

In the Orlando Sentinel, Mr. Balto seemed almost relieved when he concluded Comcast and Time Warner don’t compete head-to-head, somehow easing any antitrust concerns. It is precisely that fact why this deal must never be approved. Comcast has been free to compete anywhere Time Warner provides service, but has never done so. Letting Comcast, which has even worse approval ratings than Time Warner, become the only choice for cable broadband is hardly in the public interest and does nothing for competition. Instead, it only further consolidates the marketplace into a handful of giant companies that can raise prices and cap usage without restraint.

If Mr. Balto truly believes AT&T and Verizon will ride to the rescue with robust wireless broadband competition, his credibility is in peril. Those two companies, among others, are completely incapable of meeting the growing broadband demands (20-50GB) of the home user. With punishing high prices and staggeringly low usage caps, providers are both controlling demand and profiting handsomely from rationing service at the same time. Why change that?

No 3G/4G network under current ordinary traffic loads can honestly deliver a better online experience than DSL, and customers who attempt to replace their home broadband connection in favor of wireless will likely receive a punishing bill for the attempt at the end of the month. The only players who want to count mobile broadband as a serious competitor in the home broadband market are the cable and phone companies desperately looking for a defense against charges they have a broadband monopoly or are part of a comfortable duopoly.

One last point, while Mr. Balto seems impressed that Comcast would continue to voluntarily abide by the Net Neutrality policies he personally opposes, he conveniently omits the fact Comcast was the country’s biggest violator of Net Neutrality when it speed limited peer-to-peer traffic, successfully sued the government over Net Neutrality after it was fined by the FCC for the aforementioned violation, and only agreed to temporarily observe Net Neutrality as part of its colossal merger deal with NBCUniversal. It’s akin to a mugger promising to never commit another crime after being caught red-handed stealing. A commitment like that might be good enough for Mr. Balto, but it isn’t for us.