Opponents say Comcast deal won’t boost New York broadband
HOST 1 INTRO: The nation’s largest cable and Internet company wants to buy #2. Comcast has asked the federal government for permission to buy Time Warner Cable for 45 billion dollars.
HOST 2 INTRO: That would give Comcast access to New York City’s cable market, which Time Warner Cable currently dominates. But opponents of the deal say it won’t do anything to bring those customer’s Internet service up to speed. Matt Collette reports.
Comcast went with a science fiction theme for its big Super Bowl ad.
FADE UP SOUND: Comcast/Star Trek commercial [background: “Enterprising Young Men” from 2009 Star Trek soundtrack – composer Michael Giacchino]
SPOCK: What is this place?
CHEKOV: Where are we?
WOMAN: This is where we bring together the fastest Internet and the best in entertainment. We call it the X1 Entertainment Operating System.
CHEKOV: It looks like the future! (0:11)
Spock and Chekov from the new Star Trek movies make it seem like the future, but so does the fact that most Americans can’t get the warp-speed Internet service the ad describes. People in a few dozen other countries … can.
Penn State telecom policy professor Rob Frieden (FREE-din) says the merger could start to bring the U-S up to speed.
FRIEDEN: You’re going to have scale, you’re going to have companies that are certainly well-financed and able to make the investments in next generation network infrastructure to provide, sort of, world class broadband access. (0:14)
But bigger revenues might just turn into profit, says Tim Karr of the advocacy group Free Press.
KARR: They’re not invested back into the network. In fact, when you take away competition and allow competing entities to merge, there is less of an incentive for them to improve their services because they have a captive customer base. (0:14)
Free Press is one of several groups calling on the federal government to block the Comcast deal on antitrust grounds. The group has sued to stop similar mergers before, and may do that again, Karr says.
Groups like Free Press think there’s not enough competition for Internet service.
The local cable company is often a customer’s only option for broadband. Otherwise it’s something from the phone company, like DSL or Verizon’s faster FiOS system, which runs on fiber optics instead of copper wire. But that’s not available in at least a quarter of the households in New York City. Penn State’s Rob Frieden says there isn’t much incentive for companies to improve their service.
FRIEDEN: When you allow companies to acquire market share the easy way — not by innovating but by buying somebody out — companies can get sort of fat and happy. (0:10)
If the deal is approved, Comcast would get Time Warner Cable’s 11 million subscribers and the copper wires that provide them with television and Internet service. Those are slower than fiber, and the best cable companies can hope for are incremental increases in speed. New infrastructure requires digging holes or stringing cable — and that’s expensive. In total, Comcast would grow to around 30 million customers. That’s more than a third of the U-S broadband market.
Here in New York, city officials have a different concern. They’re worried about households in the city that don’t have Internet service at all because they can’t afford it. And they say good broadband service can help people climb out of poverty in the same way good schools and affordable housing can. Maya Wiley the new counsel for Mayor Bill de Blasio.
WILEY: We can’t be a 21st century city if our city’s children’s actually have to go to McDonald’s to go online. (0:06)
Wiley says she’ll focus on getting broadband providers to uphold their franchise agreements, which the city says they’re not doing very well.
Internet entrepreneur Andrew Rasiej, who founded the New York Tech Meetup, thinks the de Blasio administration’s new approach to broadband might be enough to do that because the city has something to offer.
RASIEJ: It could be an opportunity for this mayor to go to Time Warner and Comcast and say, ‘If you want us to support this merger, then please make concessions to us that you’re going to help us figure out how to get low-cost broadband into the hands of more New Yorkers.’ (0:18)
Comcast’s formal filings are due to the federal government at the end of March. The Department of Justice and the Federal Communications Commission will each review different parts of the proposal and a final decision will take months.
Matt Collette, Columbia Radio News.