Cable Lobbying Group Claims More Competition Would Hurt Consumers

from the insult-to-injury dept

The FCC recently voted 4-1 to approve Charter's $79 billion acquisition of Time Warner Cable and Bright House Networks. The agency just released its full order (pdf) pertaining to the deal, outlining the various conditions the FCC hopes to enforce to keep Charter from simply becoming another Comcast. Among them are a seven-year ban on usage caps, a seven-year ban on charging for direct interconnection (the heart of the telecom industry's battle with Netflix last year), and a ban on any attempt to pressure broadcasters into refusing deals with streaming video providers.

But the FCC says the merger conditions also require Charter to deploy broadband service to an additional 2 million locations, one million of which need to already be served by another competing provider. The faint threat of competition was enough to upset the American Cable Association (ACA), the lobbying organization for smaller cable providers. According to ACA CEO Matthew Polka, the added competition will actually be a horrible thing for consumers, because, uh, well, just because:

"The requirement on Charter to overbuild competitors will harm consumers in two ways...First, it will harm Charter's customers by preventing Charter from investing its resources most efficiently, such as by upgrading its networks to higher speeds. Second, it will harm customers of local, small providers when these customers are satisfied with their existing service."

And here you were thinking competition was a good thing. Of course, if these smaller cable operators don't want Charter coming to town and taking their milk money, they could simply offer cheaper, faster service themselves. Granted that's a totally foreign concept in the cable industry, where large and small cable operators alike have grown comfortable with not only local regulatory capture, but a lack of competition in the broadband space entirely.

Any disruption of this paradigm, no matter how minor, results in all manner of histrionics -- and a quick onset of amnesia regarding the fact that nobody likes cable companies after a generation of poor service and apathy, and therefore will never, ever feel bad for them.

If history is any indication the ACA really doesn't need to worry all that much. Traditionally in telecom, FCC conditions requiring that an ISP "expand to X number of additional homes" are usually conditions that the merging companies volunteer themselves. Why? It's most frequently because that expansion either already happened (and the paperwork hasn't been filed yet) -- or was slated to happen as a matter of course. Or it may not happen at all; such expansion promises are usually never really independently audited by the FCC, which lets companies string the FCC along with an endless flood of expansion promises that more often than not aren't even real.

In other words, the ACA's decision to insult the intelligence of an already annoyed customer base by pretending competition would be bad for them -- only adds insult to injury. Instead of whining about competition, how about just competing? Better yet, how about competing with Charter using a strange, outdated idea known as better customer service?

Filed Under: broadband, cable, competition, fcc, matthew polka
Companies: aca, american cable association, bright house networks, charter, time warner cable