Cable Industry Lobbyist Proclaims Cable TV Industry 'Failing' While Advocating Against Broadband Consumer Rights

from the sigh dept

I'll forgive our dear readers if they don't have the name Matthew Polka floating in their memories right at this moment. As a refresher, he's the CEO of American Cable Association, the lobbying group that represents smaller cable and broadband providers. One would think that a group like this would be very interested in breaking up the near-monopolies held by the larger players in this industry and fostering more competition within the marketplace, except that Polka has literally said the opposite. The ACA has also been involved in battles against any sort of regulation in the broadband industry, against privacy rules with any real teeth, and against the plan to require cable companies to open service to third-party cable boxes.

And in some respects on those last points, I get it. Hey, the ACA is lobbying for its member clients, not for the American people. Even as Polka has made noise about how great non-competition would be for America, everyone knew that was silly. What he says is clearly crafted to make his cable company clients as happy as possible, obviously.

The cable TV business is in trouble—in fact, it is "failing" as a business due to rising programming costs and consumers switching from traditional TV subscriptions to online video streaming, according to a cable lobbyist group.

"As a business, it is failing," said Matthew Polka, CEO of the American Cable Association (ACA). "It is very, very difficult for a cable operator in many cases to even break even on the cable side of the business, which is why broadband is so important, giving consumers more of a choice that we can't give them on cable [TV]."

Well, that's certainly different. These comments by Polka about how the cable television industry is failing differ from the doom-and-gloom sideshow too often pitched as a reason for cable companies to not do all sorts of things that would benefit customers. Instead, Polka's tone appears to be sincere on this point: the cable television industry, as we have come to know it, is in its death throes. Given cord-cutting and a new customer adoption rate that has been falling in the younger generations, it's refreshing to hear a cable lobbyist come out and admit all of this.

The problem is that when you square this with the other point he made -- the importance of broadband -- a shiver bolts down the spine.

That's one reason cable companies in the ACA see broadband as "their future," Polka said. A cable company executive who appeared alongside Polka on the C-SPAN show echoed those comments.

Video is "certainly our worst product," said Tom Larsen, senior VP of government and public relations for cable company Mediacom. "It makes the least amount of money."

Larsen and Polka both praised the FCC's new Republican leadership for taking a deregulatory approach to broadband.

This, of course, refers in part to the gutting of net neutrality, the death of which is being to served to the American public by the same new leadership Polka is so happy to praise. It should be immediately clear what the ACA is hoping for when you take into account the sum of its previous stances, nearly all of which have been de facto anti-competition, as well as this newfound full focus on the broadband portion of its members' services. It expects to be able to strangle the ISP industry in the same way its anti-competitive practices helped pave the way for cable providers being unable to respond to customer demands.

Filed Under: broadband, cable, competition, consumer rights, tv
Companies: aca

TV Cord Cutting Poised To Smash Records During Second Quarter

from the inevitable-(r)evolution dept

So we've already noted that with the rise of streaming video competition, more people cut the TV cord last year than any other time in history. MoffettNathanson analyst Craig Moffett has noted that 2016's 1.7% decline in traditional cable TV viewers was the biggest cord cutting acceleration on record. SNL Kagan agrees, noting that traditional pay TV providers lost around 1.9 million traditional cable subscribers. That was notably worse than the 1.1 million net subscriber loss seen last year. And once you factor in the fact that people are buying and moving to new homes without signing up for cable, the full numbers are actually worse.

And things are only going to accelerate as companies like Dish (Sling TV), Sony (Playstation Vue), Google (YouTube TV), Amazon and others flood the market with cheaper, more flexible, streaming alternatives.

Pay TV providers already lost roughly 789,000 subscribers this year. Wall Street analysts expect the second quarter to see more than 1 million subscriber defections away from cable. The second quarter is already historically the worst of the year for cord cutting, as college students cancel school service and pad the defections. This year, however, the belated rise in real streaming competition means things will be arguably worse:

"Pay TV providers could lose more than a million subscribers in the current period, a team of analysts at UBS led by John C. Hodulik wrote in a research note distributed Tuesday. "That would be the worst result on record and equate to a 2.5% annual decline," compared to 2.1% last quarter, the analysts wrote.

And things for the industry could only get worse, the analysts wrote.

"We estimate this will put the industry on pace for a 3.3% decline in 2017 and 4.0% in 2018," they said in their note.

You might just notice a bit of a trend after UBS put its estimates into visual form:

As we've long noted, none of this will be fatal for industry giants like Comcast, who plan to counter lost TV revenues by jacking up broadband prices via arbitrary and otherwise unnecessary usage caps, using bundled pricing to force people to take TV bundles they may not even want. The broadcast and cable TV sector could also easily counter these losses by doing something uncharacteristic and unthinkable for the sector: listening to these defecting customers and actually competing on price and package flexibility.

Filed Under: cable, cord cutting, tv

The Rate Of TV Cord Cutting Is Actually Worse Than You Think

from the the-miracle-of-competition dept

It's funny what a little added competition can do. It's no surprise that with the rise of streaming alternatives from AT&T (DirecTV Now), Dish (Sling TV), Google (YouTube TV) and Sony (Playstation Vue) -- last quarter saw one of the biggest cord cutting spikes on record. MoffettNathanson analyst Craig Moffett has noted that 2016's 1.7% decline in traditional cable TV viewers was the biggest cord cutting acceleration on record. SNL Kagan agrees, noting that traditional pay TV providers lost around 1.9 million traditional cable subscribers. That was notably worse than the 1.1 million net subscriber loss seen last year.

The shift has finally forced a number of denial prone industry executives to admit things are changing, even if few want to adapt their products and services (read: lower prices) in order to weather the storm.

But while the simple metric of subscriber totals tells quite a tale, the story gets worse for traditional cable if you look a little deeper at the numbers. For example, Moffett has been one of the only analysts to emphasize how people who are moving or buying new homes aren't signing up for cable at their new location. Millennials moving out of their parents' houses aren't either. So while the pay TV sector lost around 762,000 customers during the first three months of the year, that total is actually higher if you include movers and home buyers:

"By Moffett’s estimates, if you include the people who should have signed up for pay TV when they moved into new homes, “nearly a million homes either cut the cord or chose not to take one in the first place in Q1.” The diagnosis: “Identifying the root cause of the acceleration in cord-cutting isn’t hard. It’s not demand (the demand has always been there). It is supply. Would-be cord-cutters and cord-nevers are finally being given options,” like Netflix, HBO Now and, to a lesser degree, those skinny bundles.

Many of these folks have been labeled "cord nevers," since they've never really subscribed to traditional cable -- and have no intention to. You may recall that originally, these folks were mocked as irrelevant by the cable industry (including by Moffett, who used to be a cord cutting skeptic). And many cable and broadcast executives quite incorrectly believed that once these younger viewers got married and settled down, they'd see the error of their ways and return to traditional cable. That's simply not happening.

And things really are only just starting to heat up. Amazon, Apple, and countless others are soon expected to throw their hats into the live TV streaming ring as well, ramping up what's been already quite heated competition among streaming video alternatives. And while the push to kill net neutrality (which in turn lets companies like Comcast use usage caps to punish users that leave the Comcast pasture) could pour some amount of cold water on this evolution, this trend isn't likely to be slowed down by much of anything.

And as we've long noted, it's really not too late for the cable industry to adapt. They simply need to lower prices and offer more flexible viewing options. But while the industry has paid lots of empty lip service to this concept, most cable companies continue to blindly pass on endless broadcaster rate hikes, resulting in obnoxious retransmission disputes and blacked out content -- only accelerating the rate of defections by disgusted subscribers.

Filed Under: cord cutting, tv

Cord Cutting Is Very Real, And 25% Of Americans Won't Subscribe To Traditional Cable By Next Year

from the head-buried-firmly-in-the-sand dept

For years the traditional cable and broadcast industry has gone to great lengths to deny that cord cutting (getting rid of traditional cable TV) is real. First, we were told repeatedly that the phenomenon wasn't happening at all. Next, the industry acknowledged that sure -- a handful of people were ditching cable, but it didn't matter because the people doing so were losers living in their mom's basement. Then, we were told that cord cutting was real, but was only a minor phenomenon that would go away once Millennials started procreating.

Of course none of these talking points were true, but they helped cement a common belief among older cable and broadcast executives that the transformative shift to streaming video could be easily solved by doubling down on bad ideas. More price increases, more advertisements stuffed into each minute, more hubris, and more denial. Blindness to justify the milking of a dying cash cow instead of adapting.

But given the numbers we've seen over the last year or two, even the cable and broadcast industry has had to scale back its "head firmly in the sand" approach to market evolution. Last month MoffettNathanson analyst Craig Moffett, the telecom industry's top media quote machine, pointed out that 2016's 1.7% decline in traditional cable TV viewers was the biggest cord cutting acceleration on record. Kagan agreed, a recent report indicating that Pay TV providers lost around 1.9 million subscribers last year, the firm predicting a notable spike in the number of broadband-only homes:

"At the same time, American broadband-only homes grew much faster in 2016 — increasing by more than 2 million. Kagan estimated the U.S. had 15.4 million non-multichannel broadband homes at the end of last year, up from 13.3 million end of 2015. That suggest that 13% of the country’s occupied households make the decision not to take a traditional multichannel TV package."

Another new report by Convergence Research predicts that this broadband-only trend will only continue:

"US TV subscriber losses and cord cutter/never household additions saw a major increase in 2016 as compared to 2015: We estimate 2016 saw a decline of 2.05 million US TV subscribers, 2015 saw a decline of 1.16 million, and forecast a decline of 2.11 million TV subscribers for 2017...As of YE2016 we estimate 27.2 million US households (22.3% of HHs) did not have a traditional TV subscription with a Cable, Satellite, or Telco TV access provider, up from 24.2 million (20% of HHs) YE2015, and we forecast 30.3 million (24.6% of HHs) YE2017. 2015 saw 2.1 million, 2016 3 million, and we forecast 3.1 million 2017 cord cutter/never household additions.

The shorter version: by next year, one quarter of Americans will no longer subscribe to traditional cable. And that's only going to accelerate as cheaper, better, streaming alternatives emerge.

In a functioning, healthy market, these companies would see the writing on the wall and adapt, benefiting users. And to be fair, some have tried (Dish's Sling TV, AT&T's DirecTV Now). But with the cable industry's growing monopoly over broadband, a return to rubber-stamp regulation, and the looming death of net neutrality, many of these companies correctly understand they won't have to seriously compete anytime soon. They can simply impose unnecessary usage caps and overage fees on uncompetitive broadband markets, then use zero rating to give their own services a leg up -- while penalizing competitors.

Unfortunately for them, even that likely won't "solve" the tectonic evolution that's only just starting to take place. Ultimately, denial-prone cable and broadcast executives will be left with just one, unthinkable option: actually competing on cable TV price, flexibility and quality.

Filed Under: cable, cord cutting, internet, trends, tv

AT&T Settles With DOJ Over LA Dodgers Channel Collusion Allegations

from the competitors-playing-too-nicely dept

In 2013, Time Warner Cable (since acquired by Charter Communications) struck an $8.35 billion deal with the LA Dodgers to create LA SportsNet, the exclusive home of LA Dodgers games. To recoup its investment, Time Warner Cable demanded exorbitant prices from competing cable providers if they wanted access to the channel. Unsurprisingly, all of Time Warner Cable's competitors in the region balked at the $5 per subscriber asking price.

Several years later, a massive portion of Los Angeles still can't watch their favorite baseball team, since Time Warner Cable's asking price not only kept competing cable operators from delivering the channel, but prohibited over-the-air broadcasts of the games.

Last November, a new wrinkle emerged in the standoff after the Department of Justice sued AT&T (now owner of DirecTV) for being a "ringleader" in a collusion effort involving the channel. The DOJ effectively claimed that DirecTV, Cox, and other regional cable providers violated antitrust law by sharing private company data during their coordinated effort against Time Warner Cable's exclusive arrangement and higher rates. The original complaint stated that this "unlawful information exchange" violated consumers' rights to fair channel price negotiations:

"As the complaint explains, Dodgers fans were denied a fair competitive process when DIRECTV orchestrated a series of information exchanges with direct competitors that ultimately made consumers less likely to be able to watch their hometown team,” said Deputy Assistant Attorney General Jonathan Sallet of the Justice Department’s Antitrust Division. “Competition, not collusion, best serves consumers and that is especially true when, as with pay-television providers, consumers have only a handful of choices in the marketplace."

Fast forward a few months and a new administration, however, and the Department of Justice has announced that it has settled its lawsuit against AT&T. According to the DOJ, AT&T has agreed to monitor its employees so they do not illegally share information about sensitive contract negotiations with competitors. This, the DOJ states, should wind up being a boon for consumers:

"When competitors email, text, or otherwise share confidential and strategically sensitive information with each other to avoid competing, consumers lose,” said Acting Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “Today’s settlement promotes competition among pay-television providers and prevents AT&T and DIRECTV from engaging in illegal conduct that thwarts the competitive process."

And yes, it makes sense to enforce existing antitrust law prohibiting covert collusion between companies. The problem, of course, is that nothing in the settlement fixes the original issue of Los Angeles residents being unable to actually watch these games due to Charter's exclusive deal with the Dodgers. Nor does it address the fact that cable providers increasingly pad consumer bills with "regional sports fees" that pay for these networks (which they often already own), but are designed to help providers falsely advertise a lower rate at the point of sale (something regulators truly couldn't care less about).

So while the settlement slaps the wrists of companies that technically broke the law to do battle with Charter's exclusive arrangement, nothing about it really makes things arguably better for the consumer. And with the DOJ's new incoming antitrust boss having formerly lobbied for both AT&T and Dish Network (he's previously supported AT&T's $85 billion plan to acquire Time Warner) the all-too-familiar anti-consumer dysfunction bone-grafted to the cable and broadcast sector isn't likely to evaporate anytime soon, even with the added benefit of streaming competition.

Filed Under: baseball, collusion, la sportsnet, merger, sports, tv
Companies: charter, dodgers, time warner cable

The Cord Cutting The Cable Industry Says Isn't Happening, Keeps Happening

from the not-just-a-river-in-Egypt dept

For years, we've noted how many cable and broadcast executives have decided that their best reaction to the growing threat of cord cutting is to bury their head in the sand and pretend it isn't happening. Some industry executives like to insist that cord cutting remains an unimportant trend that will magically disappear once more Millennials begin procreating. Others -- often with help from the press -- like to insist the idea of cord cutting is some kind of myth perpetrated by mean bloggers, just to ruin everybody's good time.

As a result, too many in the cable and broadcast industry have decided that the best response to a changing TV marketplace is more of the same: more rate hikes, more advertisements, more tone deafness, and more denial.

You may be shocked to realize that this isn't working. In fact, MoffettNathanson analyst Craig Moffett, the telecom industry's top media quote machine, pointed out this week that 2016's 1.7% decline in traditional cable TV viewers was the biggest cord cutting acceleration on record thus far:

"With the results now in from all of the largest operators, it is clear that cord-cutting of legacy distribution services—that is, without including OTT-delivered virtual MVPD bundles like Sling TV and DirecTV Now (and soon, YouTube TV)—has at last meaningfully accelerated,” Moffett said. “While there admittedly remain a few smaller operators left to report, the pay-TV business (as defined by traditional providers) ended 2016 shrinking at 1.7% per year, its fastest quarterly acceleration on record."

Companies like AT&T and DirecTV have "solved" the problem of cord cutting by rolling subscribers of their streaming TV services (DirecTV Now and Sling TV) into their TV subscriber totals, hoping you'll ignore that these users pay significantly less for service than their traditional TV counterparts. Other companies, like Comcast, have actually managed to eke out small quarterly gains in cable TV customers by leveraging their broadband monopoly and effectively giving TV services away on promotion -- a short-term fix.

But the train is rolling all the same. ESPN, the poster child of industry cord cutting denial, only just recently acknowledged it will finally crack and offer the kind of stand alone streaming services it spent years claiming weren't viable. The company's also gearing up for a new round of layoffs to help counter the millions of lost subscribers (due to cord cutting and the rise of pared-down "skinny bundles"). It's estimated that, at this juncture, ESPN's losing around 10,000 subscribers per day -- the lion's share of which are paying too much money for content they don't watch.

As always, you'll have a good idea that the era of cord cutting denial is over when cable providers truly begin competing on price when it comes to their traditional cable TV offerings. Right now, however, the overarching name of the game for the sector is to insist that this cataclysmic shift the industry is experiencing is just a temporary phenomenon that needs riding out -- and not, as the truth should make clear, genuine adaptation.

Filed Under: cable, cord cutting, internet, tv

Comcast's Decision To Charge Roku Users A Bogus Fee Highlights Its Uncanny Ability To Shoot Innovation In The Foot

from the sabotaging-innovation dept

So when we last checked in with Comcast, the company was whining about a now deceased FCC plan to bring some much-needed openness and competition to your dusty old cable box. The FCC had proposed requiring that cable providers let users pick the cable box of their choice, later modifying the plan (after endless industry pearl-clutching) to simply requiring that cable providers bring their existing content in app form to existing streaming boxes. Granted, Comcast was at the heart of a massive, bizarre disinformation effort claiming the plan would end civilization as we know it.

Of course, what it would have ended was not only $21 billion in cable box monopoly rental fees, but a cornerstone of the closed, locked down walled garden that helps prop up the cable industry's gatekeeper power. Comcast, for what it's worth, claimed that bringing its content to third-party devices would harm copyright, increase piracy, hinder cable industry "innovation," and was technically impossible anyway. Regardless, the FCC's plan is dead, and it's not coming back any time soon.

But Comcast still has to drive the impression that it's listening to consumers and driving innovation, so the cable giant recently announced it would be bringing its Xfinity cable TV service to Roku streaming hardware. The app, currently in beta, lets users access their existing Comcast TV content without the need for a cable box, highlighting, Comcast insists, the company's innovation in the TV space:

"Featuring an immersive guide with rich graphics, imagery, personalized recommendations and detailed information for tens of thousands of movies and TV shows, the app will allow Xfinity TV customers to watch live and on demand programming, including local broadcast and Public Educational and Governmental channels, as well as their cloud DVR recordings, delivered over Comcast’s secure private managed network, on Roku devices in the home."

On its surface this sounded great. But this being Comcast, the company couldn't allow itself to be innovative without saddling customers with entirely unnecessary fees. Reports quickly began to emerge that Comcast would be charging customers that use Roku in this fashion an additional $7.95 every month, for no coherent reason whatsoever:

"What makes this fee striking is that it's not designed to pay for any particular cost to Comcast's business. The $9.95 fee that 99 percent of cable customers pay for set-top boxes is listed on bills as an equipment "rental fee." Even the Cablecard fee includes a bit of hardware from the cable operator. But the Roku app is purely software. It doesn't require a piece of equipment supplied by the cable company, nor does it require a technician to come to your home to set it up."

But Gigi Sohn, who served as a senior adviser to former FCC Chairman Tom Wheeler, said she knows why.

"It's gravy to them," Sohn said. "You're already paying handsomely for the service. And now they're making you pay a second time."

It is, in effect, a $7.95 "because we can" fee, and a big reason the FCC wanted to standardize this process to keep cable executive "creativity" under control. Of course, this being Comcast, the company was also quick to make sure this service wouldn't count against the completely unnecessary broadband usage caps it continues to deploy across the least competitive portions of the company's footprint. Comcast's FAQ on the new Roku beta correctly notes that this technically isn't a net neutrality violation, because this traffic never actually touches the general internet:

The Xfinity TV service delivered through the Xfinity TV Beta app is not an Internet service and does not touch or use the Internet. Rather, it is a Title VI cable service delivered solely over Comcast's private, managed cable network, so it will not count toward your Xfinity Internet Data Usage Plan.

So yeah, while not technically a violation of net neutrality (not that those rules will be around long anyway), it still gives Comcast a competitive advantage. If you're trying to choose between a new streaming live TV service like Sony's Playstation Vue or Dish's Sling TV or Comcast's offering, the fact that those services will erode your Comcast usage cap could very likely drive you back into the arms of Comcast. Of course, that's quite by design, and is a perfect example of how every "innovation" Comcast pushes into the market tends to have a nasty underlayer of price gouging and anti-competitive shenanigans.

Filed Under: fees, innovation, set top boxes, tv
Companies: comcast, roku

T-Mobile Not So Subtly Hints That It Wants To Disrupt The Cable TV Industry

from the a-swift-kick-in-the-pants dept

While T-Mobile isn't without its faults (like its opposition to net neutrality, or the time its CEO mocked the EFF), there's little doubt that T-Mobile has been a good thing for the wireless industry. The company has managed to drag the industry kicking and screaming in an overall positive direction, including the elimination of the carrier-subsidized handset model, the elimination of annoying hidden fees, and the recent return to more popular unlimited data options. And its brash CEO John Legere, while sometimes teetering into absurd caricature, has at least managed to bring a sense of industry to a traditionally droll telecom sector.

And while T-Mobile had been mocking AT&T and Verizon's forays into video as "distractions," the company this week strongly hinted that it may bring a little bit of disruption to a sector that needs it most. Both Legere and T-Mobile COO Mike Sievert made numerous comments during their earnings call this week making it pretty obvious they wanted to test the market's reaction to the idea of some kind of T-Mobile video service:

"Talk about a poster child for an industry that has really kind of ignored customers and ignored customer cares and gouged at every corner,” Legere said of the pay-TV market during T-Mobile’s earnings call Tuesday. “Clearly, I salivate when I think about the possibilities of changing some of those (video) industries. And frankly, I’m fascinated with how little AT&T has done since they spent the mother lode buying DirecTV, and pretty much have let it sit on the side, and still be an old, crappy linear TV that they bundle weakly with their unlimited offer, so maybe more to come."

Subtle. Legere didn't get into specifics about how T-Mobile would enter the sector, but one possibility remains some kind of M&A with Dish Network, which has plenty of TV assets and a long-harbored desire to jump into the wireless sector (Dish has been not-so-quietly hoarding wireless spectrum for a long while). Like Legere, Sievert also spent more than a little time making fun of the cable sector, which continues to sport some of the lowest customer satisfaction ratings in any industry in America:

"The data on this is really clear. The cable industry is statistically one of the most unloved industries in the history of the consumer economy. So, obviously, it’s ripe for innovation in this area,” T-Mobile COO Mike Sievert said on the call. “I’ll tell you one thing, in 2017 we will reach the point where people have more screen time on mobile devices than on any other kind of screen, that’s really something incredible when it comes to watching their video. So we’ll see how this convergence unfolds, but in it we’re where the industry is going, not where it’s coming from, and we’ve got a brand that really resonates with people and possibly could resonate in an industry that’s even more maligned than we found ours four years ago when we got here."

A Dish M&A is one of the more palatable consolidation possibilities facing the telecom sector under what's expected to be a dramatically more M&A-friendly Trump administration. T-Mobile is also a rumored acquisition target for Comcast or Charter Communications, neither of which would be likely to continue T-Mobile's foray into price competition or disruption. Similarly, a Sprint acquisition of T-Mobile would reduce the number of overall wireless carriers in the space, reducing competition and potentially putting T-Mobile's disruptive run to an ignominious end.

Filed Under: cable tv, competiton, disruption, john legere, tv
Companies: t-mobile

How Comcast's Growing Broadband Monopoly Is Helping It Temporarily Fend Off The TV Cord Cutting Threat

from the innovation-through-monopoly dept

Comcast's earnings report this week indicated that the company managed to add 80,000 basic video subscribers during the fourth quarter, and 161,000 net video customers for the full year. And while news outlets were quick to proclaim that Comcast had magically bucked the cord cutting trend, you'd be hard pressed to find a single outlet that could be bothered to actually explain how. When an explanation is given, it's usually just regurgitation of Comcast's claim that the cable giant's fending off cord cutting thanks to the company's incredible innovation in the set top box market:

"The turnaround in the cable business helped Comcast beat profit estimates for the fourth quarter. Executives attribute the momentum in their cable-TV business largely to their new video platform, called X1, which makes it easier to search for shows and movies on TV and on Netflix from their cable set-top box."

Except it's not cable box innovation that's helping Comcast fend off cord cutting, it's the company's growing monopoly over the broadband last mile.

In countless markets Comcast competes solely with AT&T and Verizon, who have made it abundantly clear they're no longer interested in the fixed-line residential broadband business. Both companies have made slinging ads and content at Millennials their primary focus, as evident by Verizon's acquisition of AOL and Yahoo and focus on creative new snoopvertising technologies. As a result, these telcos are quite literally trying to drive many of these customers away with a combination of apathy and price hikes. If these users want broadband connections any faster than 3-6 Mbps, their only option is, increasingly, Comcast.

When these users arrive at the nation's biggest cable giant, they discover that signing up for TV and broadband is notably cheaper than just signing up for broadband alone. The problem is: while many have claimed that Comcast's "bucking cord cutting," there's no evidence that many of these users are even watching the cable connections they pay for, nor that they'll stick around as a traditional television viewer long term. Many just signed up because having television was actually less expensive than getting rid of it.

But should they try and get rid of it Comcast's got that angle covered too: the company's growing monopoly means less broadband competition than ever in many of its markets, allowing it to impose draconian and unnecessary usage caps on the company's customers. Caps that apply to competing streaming services, but not Comcast's own content. All told, between bundling and usage caps, Comcast's broadband monopoly means it simply doesn't feel the pain a company would feel in the face of real competition, which is why it has little to no incentive to fix its historically bad customer service.

Often Comcast obfuscates its growing monopoly over broadband and its ham-fisted implementation of usage caps with creative claims of incredible new innovation that gets gobbled up by the press. Like the company's announcement this week that it will soon be letting customers watch Comcast cable TV on Roku devices. This new beta is Comcast's attempt to quiet criticism that emerged during the FCC's failed attempt to bring competition to the monopolized cable box. And, in obedient fashion, the press was quick to highlight the partnership as a surefire example of Comcast's incredible innovation.

But upon closer inspection the service comes with a number of caveats, including the fact that users must subscribe to Comcast cable TV and Comcast broadband, and must pay Comcast an extra fee just to use Roku hardware they already own. Also buried in the FAQ for Comcast's new Roku beta is the proclamation that this service also won't count against Comcast's usage caps:

"Will the XFINITY TV Beta app use data from my XFINITY Internet Data Usage Plan?

No. The XFINITY TV service delivered through the XFINITY TV Beta app is not an Internet service and does not touch or use the Internet. Rather, it is a Title VI cable service delivered solely over Comcast's private, managed cable network, so it will not count toward your XFINITY Internet Data Usage Plan. Usage of any other apps on Roku devices, including any TV Everywhere apps accessible with your XFINITY TV credentials, do use the Internet and will count against your XFINITY Internet Data Usage Plan.

Comcast is effectively arguing that this isn't a net neutrality violation (for whatever that's worth with the rules about to be deep sixed by a duopoly-adoring Congress) because the data doesn't travel over the common internet. Still, the function of these added restrictions cumulatively remains the same: to tilt the playing field and keep customers in house and away from competing services. With a growing cable monopoly and the rise of rubber-stamping regulators under Trump, Comcast will soon face less pressure than ever before to shore up its miserable customer service or to lower prices.

That's great news if you're a Comcast executive or investor, but less stellar if you're one of the countless millions of consumers or competitors already bored to tears by several decades of Comcast's anti-competitive behavior and overall dysfunction.

Filed Under: cable, cord cutting, monopoly, tv
Companies: comcast

Verizon Eyes Charter Megamerger, Because Who Likes Broadband Competition Anyway?

from the ma-bell-and-the-ill-communication dept

Charter Communications just got done spending $79 billion to acquire Time Warner Cable and Bright House Networks. And like most telecom megamergers, the promises made before the deal (more jobs! better service! incredible new innovation!) have only a fleeting resemblance to what's actually happening in the real world. Instead, acquired markets have enjoyed frozen broadband deployments, rate hikes and scaled back social media support. With Charter already having among the worst customer service in any industry in America, support in the wake of the merger has been precisely what you'd expect.

With the ink barely dry on that deal, the telecom sector is looking to consolidate even further. Charter stock took a nice joy ride this week on the news that Verizon has reached out to Charter to merge, consolidating the sector even further. The deal would create a telecom giant the likes of which the sector has never really known:

"Verizon serves 114 million cellphone subscribers, 4.6 million TV customers and 7 million Internet subscribers; Charter has 17 million TV customers and 21 million Internet subscribers. Together, the two companies' high-speed Internet businesses would add up to more than Comcast's 25 million broadband customers; at 21.6 million, their combined base of TV customers would be roughly on par with Comcast's. Both Verizon and Charter declined to comment."

Rumors of a Verizon and cable industry megamerger have been floating around the industry for several weeks, with Comcast also being tossed about as an M&A partner. Most of the analysis suggests that Verizon's either interested in using Charter's large footprint to help shore up the company's fifth generation (5G) wireless ambitions, or feels threatened from the cable industry's plan to jump into the wireless sector -- Verizon hoping to head off any additional wireless competition at the pass via M&A.

Less talked about of course is the fact that Charter and Verizon directly compete in many markets (like New York City), and the deal would result in an already relatively uncompetitive sector getting less competitive than ever. Or the fact that time and time again, promises of job creation and improved service in the wake of these deals never actually materialize. In fact, quite often the opposite is the result as redundant positions are eliminated and competitive incentive to compete (or, say, improve utterly abysmal customer service) is eroded further.

Of course the X factor in this latest megamerger rumor is whether or not the Trump administration will approve of the deal. On the campaign trail, Trump promised to not only block AT&T's $100 billion acquisition of Time Warner, but even went so far as to claim he'd somehow break up the already completed Comcast NBC merger, completed back in 2011. Most Wall Street and telecom analysts however believe Trump was just grousing over the negative coverage by NBC and Time Warner-owned CNN, and the ideological bent of his regulatory appointments (like new FCC boss Ajit Pai) suggest standing in the way of such super-unions won't actually be a formal administration policy.

Since historically companies like AT&T and Verizon have had incredible success conning convincing the press and public that these kinds of deals are a great boon for job growth and improved infrastructure, it seems rather likely that Trump will somehow approve and co-opt the deals under a flurry of promises that will never actually materialize. Should these kinds of deals be approved, the cognitive dissonance among Trump supporters still convinced he's somehow a champion of the little guy (despite clear intent to gut consumer protections like net neutrality and his laundry list of ultra-industry friendly administration appointments) should prove equal parts entertaining and terrifying.

Filed Under: broadband, competition, merger, tv
Companies: charter, verizon