New Bill Would Prevent Comcast-Loyal States From Blocking Broadband Competition

from the when-Comcast-writes-the-law dept

We've long noted how state legislatures are so corrupt, they often quite literally let entrenched telecom operators write horrible, protectionist laws that hamstring competition. That's why there's now 21 states where companies like AT&T, Verizon and Comcast have successfully lobbied for laws banning towns and cities from building their own broadband networks, even in instances where the incumbent refuses to. In many states, these laws even ban public/private partnerships, often the only creative solution for better broadband in low ROI markets.

FCC efforts to pre-empt states from engaging in this kind of protectionism have been shot down by the courts, and voters continue to elect lawmakers whose top priority is protecting entrenched telecom duopolies, ensuring this cycle of pay-to-play dysfunction continues.

Occasionally lawmakers propose bills attempting to shake up this cronyism, but the ISP-stranglehold over lawmakers usually ensure they go nowhere. Case in point: Rep. Anna Eshoo has introduced the Community Broadband Act of 2018 (HR 4814), which would not only ban states from passing rules prohibiting community broadband, but would ensure that any community broadband networks that get built don't get preferential treatment by regulators if they compete with private-sector ISPs. As bill co-sponsor Mike Doyle notes, these networks are often the only way many towns and cities get decent service:

"All too often, communities around the country struggle to get service from private providers, and where people can get service all too often it’s too slow and costs too much,” Doyle said in a statement. “Communities that build out their own broadband networks offer competitive options that not only bring service to the unserved, but also promote competition in underserved areas."

AT&T, Verizon and Comcast's stranglehold over state and federal lawmakers ensures this effort will likely be killed in committee, just like the two previous efforts to pass such a law were (one by Eshoo last year, and another by Senator Cory Booker in 2016). Like net neutrality, having access to better, cheaper broadband has stupidly become a "partisan" issue thanks to ISPs eager to sow discord on the subject. And when it comes to municipal broadband, ISPs do so by framing the concept as automatic taxpayer boondoggles (actual residents tend to disagree).

Ignored in that argument is the fact that these towns and cities aren't getting into the broadband business because they think it's fun, they're doing so after decades of disgust at available private options. Also ignored is the fact that making local infrastructure decisions should be left up to the communities themselves, not competition-phobic Comcast executives sitting half a world away. If ISPs wanted to stop community broadband, they could offer better, cheaper service. Instead, lawsuits, disinformation, and protectionist state laws tend to be their option of choice.

Unfortunately for these ISPs, the attack on net neutrality is only driving more interest than ever in locally owned and operated creative alternatives to the broken status quo. And as the Trump administration rushes to remove all federal and state oversight of these uncompetitive duopolies, the resulting shit show will only make such options more appealing than ever to under-served communities.

Filed Under: anna eshoo, broadband, competition, mike doyle, municipal broadband, states rights

A Perfect Storm Of Comcast Unaccountability Is Brewing

from the utterly-Comcastic dept

If you've been napping, Comcast lobbyists recently convinced the government to kill net neutrality rules, dismantle broadband privacy protections, and bury efforts to make the cable box market more competitive. And they're just getting warmed up. Comcast lobbyists have also successfully convinced the Trump administration to eliminate nearly all state and federal oversight of large telecom monopolies. Should they be successful, consumers and innovators will face a massive new era of little to no accountability for one of the most despised, least-competitive business sectors in America.

This new wave of regulatory capture comes at an inopportune time for American consumers and the nation's startups. Comcast was already facing less broadband competition than ever in many markets thanks to incumbent telcos effectively giving up on upgrading millions of aging DSL lines. With neither government oversight nor healthy competition present to keep Comcast in check, the company's awful customer service has become legend, and the rise of arbitrary, unnecessary fees and usage caps have become the norm.

As an added bonus for Comcast, the conditions applied to the company's 2011 merger with NBC just expired over the weekend, raising additional concerns about the potential impact of an unshackled Comcast on the emerging streaming video market. Those conditions prohibited Comcast from charging streaming competitors unfair rates, or from meddling in Hulu management to prevent disruption of Comcast's own services. They also required Comcast adhere to some aspects of the FCC's 2010 net neutrality rules, even if they were dismantled in court (they were).

With the DOJ suing to block AT&T's own media megamerger, some FCC Commissioners are wondering why Comcast gets a free pass here:

On the one hand, several of the conditions didn't mean all that much, since voluntarily proposing your own meaningless conditions is a long-standing tradition in the telecom space. And in many instances Comcast was found to have ignored them completely, a lack of trust in Comcast's word being one of the reasons that regulators blocked Comcast's attempted acquisition of Time Warner Cable. Still, some of the conditions were important, and last year analysts warned that their expiration could allow Comcast to find new, creative ways to screw over competitors and consumers:

"The conditions have served as backstop against any concern about anti-competitive behavior that would have arisen,” said Craig Moffett, an analyst at MoffettNathanson LLC.. "All those concerns will be front and center again if Comcast is completely unshackled from these rules."

Comcast, for its part, unsurprisingly argues that oversight of Comcast is no longer needed because the streaming video market is just so damn competitive:

"All of the market segments in which we do business are more robust and more competitive now than they were before our NBCUniversal transaction, including the explosive growth of online video distributors," a company spokeswoman said.

But again, we're not just talking about the death of NBC merger conditions. Should Comcast's assault on net neutrality survive the courts, and should ISPs be successful in gutting FCC, FTC, and state oversight of ISPs, things could get cumulatively very stupid, very quickly. There could soon be literally almost nothing standing between Comcast and an ocean of anti-competitive possibilities, whether that's using unnecessary usage caps to make streaming video from competitors be more expensive, or using licensing restrictions to try and drive competing services out of business.

Under this new zero-oversight scenario, Comcast could easily use interconnection shenanigans to drive up rates for competing content companies. It could engage in paid prioritization, giving Comcast and Comcast's partner's content an unfair leg up in the market. Comcast could ramp up use of zero rating to penalize competitors. And, under Comcast lobbyists planned scenario, there's not much the FCC, FTC, or states could do about it.

There's still a segment of folks that believe that eliminating all regulation in the telecom sector somehow magically results in Utopia. And while this deregulatory approach may work in more functional, competitive markets, that's simply not how the telecom sector (where Comcast holds a natural monopoly over the last mile) works. You need either healthy competition or objective, sensible regulatory oversight to prevent abuse. If you hadn't noticed, we've got neither. And instead of fixing the problem, we're doubling down on letting Comcast run roughshod over an already very broken market.

Filed Under: competition, merger conditions
Companies: comcast

FCC Backs Off Plan to Weaken Broadband Definition, But Still Can't Admit Limited Competition Is A Problem

from the two-centimeter-high-jump dept

You might recall that a few years ago the FCC under Tom Wheeler bumped the standard definition of broadband to 25 Mbps downstream, 3 Mbps upstream. This greatly upset the broadband industry (and the numerous lawmakers and policy flacks paid to love them) because it highlighted a lack of broadband competition and deployment. That's especially true at higher speeds, where two-thirds of the U.S. lacks access to more than one ISP at that speed.

But recently, the FCC under industry BFF Ajit Pai began playing around with the idea of weakening this definition. Under Pai's plan, the FCC would have declared that 10 Mbps down, 1 Mbps up wireless also counts as "broadband competition," letting the industry effectively say "mission accomplished." The problem is that wireless is often more expensive, capped (especially in rural areas), and inconsistently available (carrier coverage maps are notoriously unreliable).

Fortunately, the FCC last week stated that for some, unspecified reason they'd be backing away from the plan. Section 706 of the Telecommunications Act of 1996 requires the FCC to continually assess whether broadband is being deployed on a "reasonable and timely basis," and if not -- to do something about it. While the FCC hasn't released its full assessment yet, Pai ponied up a statement (pdf) last week that makes it clear that Pai believes everything is going swimmingly in the broadband market, thanks largely to his frontal assault on consumer protections like net neutrality:

"The draft report indicates that the pace of both fixed and mobile broadband deployment declined dramatically in the two years following the prior Commission’s Title II Order. However, the draft report also discussed how, over the course of the past year, the current Commission has taken steps to reduce barriers to infrastructure investment and promote competition in the broadband marketplace. Taken together, these policies indicate that the current FCC is now meeting its statutory mandate to encourage the deployment of broadband on a reasonable and timely basis."

So we'll note for about the hundredth time that the claim that net neutrality hurt investment is a lie easily disproved by publicly-available data. We'll also remind you that in Pai's world, "reducing barriers to infrastructure investment" means gutting broadband programs for the poor, protecting the cable industry's monopoly over the cable box from competition, making it easier for prison phone monopolies to rip off inmate families, dismantling generations old media consolidation rules simply to aid Sinclair Broadcasting's merger ambitions, killing net neutrality, killing meaningful broadband privacy protections, and helping protect the business broadband and wireless backhaul industry from actual competition. You know, potato, potAHto.

Fortunately, buried in Pai's rose-colored glasses assessment of the sector is the admission that he won't work to erode the base definition of broadband, and an acknowledgement that wireless isn't a valid replacement for fixed-line broadband:

"The draft report maintains the same benchmark speed for fixed broadband service previously adopted by the Commission: 25 Mbps download/3 Mbps upload. The draft report also concludes that mobile broadband service is not a full substitute for fixed service. Instead, it notes there are differences between the two technologies, including clear variations in consumer preferences and demands."

Yay? While that's a tiny bit of good news, it's pretty much standard operating procedure for revolving door regulators like Pai to fiddle with the numbers to pretend a lack of competition isn't a real problem. After all, if the data suggests there's a problem, as a public servant you might just be required to push policies aimed at addressing it. So while Pai has retreated from this particular effort to lower the bar to ankle height, you should expect the effort to resurface somewhere else with a decidedly different hue of public relations paint.

Filed Under: ajit pai, broadband, competition, fcc

Colorado Cities Keep Voting To Build Their Own Broadband Networks

from the roll-your-own dept

So we've long mentioned how incumbent ISPs like Comcast have spent millions of dollars quite literally buying shitty, protectionist laws in more than twenty states. These laws either ban or heavily hamstring towns and cities from building their own broadband networks, or in some cases from even engaging in public/private partnerships. It's a scenario where ISPs get to have their cake and eat it too; they often refuse to upgrade their networks in under-served areas (particularly true among telcos offering DSL), but also get to write shitty laws preventing these under-served towns from doing anything about it.

This dance of dysfunction has been particularly interesting in Colorado, however. While lobbyists for Comcast and CenturyLink managed to convince state leaders to pass such a law (SB 152) in 2005, the legislation contains a provision that lets individual Colorado towns and cities ignore the measure with a simple referendum. With frustration mounting over sub-standard broadband and awful customer service, more than 100 towns and cities have done so thus far.

Late last year in Fort Collins, for example, 57.15% of locals voted to open the door to community-run broadband despite Comcast and Centurylink spending nearly $1 million on misleading ads claiming the plan would cause the city to fall into disrepair. And this week, the city council voted unanimously on a plan that will help deliver cheap, ultra-fast (gigabit) fiber broadband to most city residents. Under the proposal, the city will take out a $1.8 million loan to help the local utility with startup costs, with expansion funded by bonds:

"Last night's three unanimous votes begin the process of building our city's own broadband network," Glen Akins, a resident who helped lead the pro-municipal broadband campaign, told Ars today. "We're extremely pleased the entire city council voted to support the network after the voters' hard fought election victory late last year. The municipal broadband network will make Fort Collins an even more incredible place to live."

With the Trump administration's assault on net neutrality, broadband privacy rules and pretty much all meaningful oversight of telecom duopolies, interest in these kinds of creative solutions as an escape from the broken telecom market is only going to grow. In Fort Collins, a city planning document indicates the city is promising to operate a network that actually adheres to net neutrality and avoid usage caps:

"The network will deliver a 'net-neutral' competitive unfettered data offering that does not impose caps or usage limits on one use of data over another (i.e., does not limit streaming or charge rates based on type of use). All application providers (data, voice, video, cloud services) are equally able to provide their services, and consumers' access to advanced data opens up the marketplace."

ISP lobbyists, executives, and their paid policy parrots like to paint these community broadband efforts as automatic boondoggles. In reality, they're just like any business plan, with some good and some arguably awful. But lost in this claim is the fact that ISPs are bribing state legislatures to take local infrastructure decisions out of the hands of local voters -- simply because they're terrified of anything vaguely resembling competition. Also lost is the fact that these towns and cities wouldn't be looking into these efforts if U.S. broadband wasn't such an anti-competitive, uncompetitive shitshow.

But why should ISPs like Comcast compete when it's much easier to buy awful state laws, then sue any community broadband efforts into oblivion (as Comcast attempted to do in Chattanooga)? The problem for incumbent ISPs is their ham-fisted efforts to obliterate things like net neutrality is only fueling anger in communities looking for any alternative to the dysfunctional status quo.

Filed Under: broadband, colorado, competition, municipal networks

Those Annoying Cable Channel Blackouts Are Only Going To Get Worse In 2018

from the more-money-for-the-same-substandard-service dept

The last few years, cable TV customers have faced a growing number of obnoxious carriage fee blackouts, which occur when broadcasters and cable operators can't agree on new programming contracts. Such feuds usually go something like this: a broadcaster will demand a fairly obnoxious price hike for the same content, to which the cable provider (already awash in complaints about higher rates) will balk. Instead of negotiating their differences like adults, this content is subsequently blacked out for paying customers to force a settlement. Customers never see refunds for the inconvenience of being used as props.

For weeks, consumers are bombarded with PR missives, new websites and on-screen tickers all trying to amplify public outrage and drive greater pressure for one side or the other to buckle. After a while, the two sides strike a new confidential deal, and the higher rates are then quickly passed on to consumers. In a letter to lawmakers last year, Dish Network argued that consumers have faced 750 such broadcaster blackouts since 2010, with the retransmission consent fees that broadcasters demand growing a whopping 27,400% between 2005 and 2016.

It's an idiotic cycle of dysfunction that's unsustainable and only acts to drive consumers to alternative video options (like piracy). The fact that these costs are only driving users away from the traditional pay TV ecosystem is irrelevant to many cable and broadcast executives, who seem inclined to believe that they'll be able to nurse this dying cash cow in perpetuity.

The annoying phenomenon shows no sign of slowing down in 2018. Frontier customers in Seattle this week lost access to CBS after the company says it was told it needed to pay 80% more money for the same exact content:

"Cox’s bullying and heavy-handed blackout tactics hurt consumers,” said Steve Ward, Frontier Senior Vice President Video Technology and Content. "Their demands for an outrageous price increase would have to be passed on to customers in the form of higher monthly service rates. It’s time for Cox to agree to a fair and reasonable solution."

Meanwhile, Suddenlink and Optimum (formerly Cablevision) customers woke up to the new year with the news that they'd no longer be able to access Starz after their cable provider and the broadcaster failed to strike a new deal. For now, customers of those cable providers are being told that if they want access to Starz content, they'll need to pay extra to access it via Starz online streaming platform:

"Given that Starz is available to all consumers directly through Starz' own over-the-top streaming service, we don't believe it makes sense to charge all of our customers for Starz programming, particularly when their viewership is declining and the majority of our customers don't watch Starz," Altice said in its statement. "We believe it is in the best interest of all our customers to replace Starz and StarzEncore programming with alternative entertainment channels that will provide a robust content experience at a great value."

Of course with regulatory capture and the death of net neutrality, it's likely that this is one of several problems in the telecom and cable world that will only get worse before it gets better. Regulators from both parties were already inclined to dismiss this problem as just "boys being boys," wary of getting involved in what they believe are simple business disputes. And while there have been occasional talks about banning these blackouts as an act of bad-faith negotiations, nothing much ever appears to come of them. The hope was that the threat of regulatory intervention would be enough.

And while it's certainly true that this behavior will only drive customers to new streaming alternatives, broadcasters still dictate licensing for (or outright own) those services as well, meaning it's only a matter of time before this problem expands to hamper access to online content. There have been several different times where broadcasters blocked user access to their online services as well (usually by ISP IP range); behavior that only ceased due to companies being worried that they might run afoul of net neutrality (since many ISPs are broadcasters, like Comcast) or adult regulatory supervision.

With both of those concepts on the chopping block, expect carriage fee bickering (and the subsequent blackouts) to get both worse and more sophisticated in the new year.

Filed Under: blackouts, broadcasters, cable, competition, tv

FCC Prepares To Weaken Broadband's Definition To Hide Competitive, Coverage Issues

from the not-particularly-subtle dept

Under Section 706 of the Telecommunications Act, the FCC is required to consistently measure whether broadband is being deployed to all Americans uniformly and "in a reasonable and timely fashion." If the FCC finds that broadband industry is failing at this task (you may have noticed that it is), the agency is required by law to "take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment" and by "promoting competition in the telecommunications market."

Of course given that the telecom sector is often the poster child for regulatory capture, this mandate often gets intentionally lost in the weeds. This is usually accomplished by simply pretending the lack of competition doesn't exist. Or worse, by meddling with broadband deployment metrics until the numbers show something decidedly different from the reality on the ground. It's a major reason why broadband ISPs (and the lawmakers who love them) whine incessantly every time we try to update the definition of broadband to a more reasonable and modern metric.

As such, we engage in this endless tug of war depending on how grossly-beholden the current FCC regulators are to regional telecom duopolies. Regulators not blindly loyal to giant ISPs will usually try to raise the bar to match modern needs, as Tom Wheeler did when he bumped the standard definition of broadband to 25 Mbps down, 4 Mbps up back in 2015. Revolving door regulators in turn do everything in their power to manipulate or ignore real world data so that the industry's problems magically disappear.

Case in point: the FCC is expected to vote in February on a new proposal that would dramatically weaken the standard definition of broadband. Under the current rules, you're not technically getting "broadband" if your connection in slower than 25 Mbps down, 4 Mbps up. Under Pai's new proposal, your address would be considered "served" and competitive if a wireless provider is capable of offering 10 Mbps down, 1 Mbps up to your area. While many people technically can get wireless at these speeds, rural availability and geography make true coverage highly inconsistent.

The original notice of inquiry (pdf) proposed by the FCC tries to frame this manipulation of the data as a matter of efficiency, asking:

"Given that Americans use both fixed and mobile broadband technologies, we seek comment on whether we should evaluate the deployment of fixed and mobile broadband as separate and distinct ways to achieve advanced telecommunications capability. Taking into account the differences between the various services and the geographic, economic, and population diversity of our nation, we seek comment on focusing this Section 706 Inquiry on whether some form of advanced telecommunications capability, be it fixed or mobile, is being deployed to all Americans in a reasonable and timely fashion. Would such an inquiry best follow the statutory instruction to evaluate the deployment of advanced telecommunications capability "without regard to any transmission media or technology?"

And while that's designed to sound reasonable on its surface, industry analysts like Doug Dawson have quickly pointed out that there's all manner of issues with this effort. One, wireless simply isn't equivalent to a fixed-line connection and may not be for a decade or more in many rural markets, where users not only pay an arm and a leg for capped and metered service, but are often kicked off the network for using these connections like traditional, unlimited fixed-line connections. Folks who believe wireless to be some magical competitive panacea often like to ignore usage caps and higher prices of cellular:

"There is a monstrous difference in price between landline and cellular data. A household using 100 gigabytes of cellular data in the month might pay nearly $1,000 per month. Most ISPs report that the average US household now uses between 150 and 200 gigabytes of broadband per month. It’s hard to think of cellular broadband as a substitute for landline broadband with such disparate pricing."

Folks that think wireless competition will come and save us all also like to ignore the fact that just two carriers hold a monopoly over business data services and backhaul connections that feed towers, something Ajit Pai's FCC also recently tried to downplay when they redefined what constitutes competition in that segment as well. Again, the goal here isn't efficiency, it's illusion:

"The major reason that counting cellular data as equivalent to landline data is that it’s going to largely take the FCC off the hook for promoting broadband. They currently have directed billions from the Universal Service Fund to help build faster broadband networks, mostly in rural America. They can discontinue such programs and not expand their effort if most of rural America is considered to have broadband. With a simple vote a large percentage of rural homes on the wrong side of the digital divide will suddenly have broadband. That’s going to be big news to rural people who already understand that cellular broadband is not really broadband."

Again, it's so much easier to justify your apathy to a problem (in this case, broadband coverage and pricing problems caused by market failure and a lack of competition) when you manipulate the data to suggest the problem somehow doesn't exist.

Filed Under: ajit pai, competition, definitions, fcc, speed

Comcast & The Cable Industry Greets The New Year With A Flurry Of Price Increases

from the we-don't-have-to-compete,-we're-the-cable-and-broadband-industry dept

What do you do when you're faced by an existential, evolutionary shift that threatens your entire, overly-comfortable industry? Why you raise rates, of course! Comcast is one of six cable providers who have informed customers that they've raised the rates for the new year, despite the record-setting shift toward cord cutting during 2017. Everything Comcast offers is seeing price hikes of some kind, ranging from increases in the company's traditional channel bundles, a price increase for Comcast's standalone streaming platform, and even the fee charged for renting a modem (which is now $11 per month).

Comcast's even jacking up the obnoxious fees it's currently facing several lawsuits over. That includes the "Broadcast TV fee," which is simply a part of the cost of doing business (paying for content) buried below the line, letting Comcast advertise one rate -- then sock consumers with another price entirely once the bill comes due. That fee, which Comcast has insisted is just its way of "being transparent," was just $1.50 when introduced in 2013 -- and will be bumped to $8 per month in the new year:

With cord cutting setting records, why doesn't Comcast feel the need to actually adapt to changing markets? It doesn't have to. The company is securing a bigger monopoly over broadband in a growing number of markets thanks to telcos that no longer think it's worth it to upgrade aging DSL lines.

That means there are more markets than ever where if you want a decent broadband connection that meets the FCC's 25 Mbps definition of broadband, Comcast is your only option. As a result, Comcast knows that it can simply jack up the cost of broadband as well to counter any TV revenue losses without being punished by the pesky nuisance of competition. This, of course, includes Comcast's implementation of arbitrary and unnecessary usage caps and overage fees, which have proven a handy weapon in hamstringing streaming alternatives. It doesn't take an economics degree to know that when you're the only provider in a market for a product that many feel is a necessity, that prices will rise quickly.

Publicly, Comcast and other cable providers will lay the blame squarely at the feet of broadcasters, who consistently demand higher and higher rates for the same product. But that ignores the fact that Comcast is a broadcaster (NBC Universal, several regional sports networks), and is jacking up pricing on numerous services, hardware rental costs, and other products that have nothing to do with the cost of programming.

Granted, with the Trump administration laying the groundwork for gutting federal and state oversight of an already quite dysfunctional and broken cable and broadband market, you can expect a lot more where this came from over the next few years.

Filed Under: cable, competition, fcc, fees, internet access, price hikes
Companies: comcast