After Blowing $336 Million On Failed Merger, Comcast Again Proves New Neutrality Rules Won't Harm Broadband Investment

from the watch-what-we-do,-not-what-we-say dept

Comcast's earnings this week indicate that the cable giant everybody loves to hate spent $99 million on trying to get its $45 billion merger with Time Warner Cable approved last quarter. All told, Comcast spent $336 million on trying to sell the deal before it was ultimately squashed by regulators for being just too big and ugly. And that's likely not including all of the costs of the deal, like the money thrown at minority and other groups to create the illusion of diversity of support for the deal. That's money that could have been spent on Comcast's historically abysmal customer service, which contributed to the negative public sentiment surrounding the deal.

Neither the failed merger nor the FCC's new net neutrality rules appear to have stopped the company from its plan to deploy still-unpriced, 2 gigabit service to 18 million homes by the end of the year (including to some cities it had previously sued, threatened, and otherwise manhandled to try and stop precisely these kinds of services from being deployed). Speaking to investors and analysts, Comcast cable CEO Neil Smit proclaimed that the FCC's reclassification of ISPs as common carriers hasn't impacted the way Comcast does business in the slightest:

"On Title II, it really hasn't affected the way we have been doing our business or will do our business. We believe on Open Internet and while we don't necessarily agree with the Title II implementation, we conduct our business the same we always have, transparency and nonpaid peering and things like that. I think how it will emerge remains to be seen. We have been flexible in our packaging with HSD. We have invested significantly in our capacity and will continue to do so and that includes both the -- we launched a 2 gigabit speed, 2 gigabit symmetrical speed recently. We are rolling that out across 18 million homes by the end of the year..."

Which, again, is odd given the fact that Comcast's participating in a lawsuit where the primary argument is the FCC's new rules are so "arbitrary and capricious," they'll demolish sector investment. If you're playing along at home, Smit's only the latest broadband industry executive to admit that the FCC's rules really won't hurt the sector. Frontier, Cablevision, Sprint, Sonic and even Verizon executives have all said, at one point or another, that the FCC's new neutrality rules aren't going to even dent sector investment.

And while some of these executives have claimed their comments have been taken out of context. They keep making the same statements. Time Warner Cable CEO Rob Marcus this week also proclaimed that nothing really changes under Title II:

"At this point in time no changes to our overall philosophy. Obviously, we're going to be watching closely how things unfold on the Title II front. We have said [in] the past that [our] normal business practices comply entirely with the notion of the open Internet. No blocking, no discrimination, no throttling, and transparency are fundamental parts of the way we do business. So to the extent that's the full scope of what gets implemented under Title II, I think you won't see a change in the way we do business. To the extent that something more comes from this, as we would describe it, excessively broad granted authority, then we will have to revisit the way we are approaching investment and pricing.

Charter CEO Tom Rutdledge offered a similar sentiment:

"Well, look on the regulatory side, I mean I think every situation is different. Title II was a -- it's actually a longstanding issue. The issue of net neutrality has been around for a long time and companies have been agitating. It's been part of the President's agenda all along, and he campaigned on it initially. So it's not surprising that the forces that prevailed there did. Although I wish it were structured differently and I thought that the outcome was less than ideal, I don't think that is particularly related to being friendly or not friendly to cable in general."

And here again we have Comcast not only saying that Title II doesn't hurt them, but proving as much by continuing with an 18 million home fiber deployment that wasn't supposed to be possible under the "innovation chilling" new neutrality regime. So yeah, perhaps cable executives can sit down with their lawyers currently suing the government and compare notes. Because the network investment bogeyman just isn't scary when you consistently admit he's just not real.

Filed Under: broadband investment, fcc, merger, net neutrality
Companies: charter, comcast, time warner cable

Tone Deaf Zuckerberg Declares Opposition To Zero Rated Apps An 'Extremist' Position That Hurts The Poor

from the new-AOL,-brought-to-you-by-Mother-Teresa dept

Last month we noted how Facebook CEO Mark Zuckerberg has been getting a crash course in net neutrality over in India, while the government fields public comment over new neutrality rules. The debate has been particularly heated in regards to Facebook's Internet.org initiative, which offers free, walled-garden access to some content and services (namely Facebook and its deep pocketed partners). Companies have been vocally dropping out of the effort, complaining they don't like the idea of Facebook and its partner ISPs getting to decide what content gets to be cap exempt (aka: zero rating).

Zuckerberg has proven to be rather tone deaf to the criticism so far, the CEO arguing repeatedly that creating walled gardens and breaking the very principles of the open Internet is OK -- provided you claim to have good intentions (in this case, aiding the poor by marketing to them in a Facebook walled garden). To hear Zuckerberg tell it, what Internet.org is doing can't possibly violate net neutrality because he's providing poor families a fractured, Facebook-dominated version of AOL. He's repeatedly implied that if you oppose Facebook's vision (and what it will turn into for generations to come), you're hurting the poor.

With that defense not working, the CEO has taken to the Internet.org website to post a video to try again, announcing that Internet.org is being opened to to a broader selection of websites. And that's great, until you start reading the massive number of restrictions "approved" content must adhere to. Namely, the websites can't integrate "VoIP, video, file transfers, high resolution photos, or high volume of photos." They can't integrate Flash, Javascript or Java applets. They also can't use encryption, something that's increasingly important in developing and developed nations alike.

Now again, Zuckerberg really may have noble intentions here, but the list of restrictions combined with some of the rhetoric from the video suggests an ongoing tone deafness to his critics. After telling a few anecdotes about how Facebook is helping "local fishermen" and "chicken farmers in Zimbabwe," Zuckerberg wades into the meat of his argument, declaring that those opposed to zero rating apps hold an "extreme" definition of net neutrality:

"Some may argue for an extreme definition of net neutrality that says that it’s somehow wrong to offer any more services to support the unconnected, but a reasonable definition of net neutrality is more inclusive. Access equals opportunity. Net neutrality should not prevent access."

Except declaring zero rating to be a core net neutrality violation is far from extreme. The governments of Canada, The Netherlands, Norway, Chile, Slovenia, Estonia, Japan, Finland and now potentially India have all passed neutrality rules banning zero rating of apps. Realizing that zero rating makes life more difficult for smaller companies, independents and non-profits isn't extreme, it's common sense. Even with Internet.org's new, wider walled garden gateway, you've still got Facebook declaring what is or what isn't "acceptable content," which by its very nature runs in stark contrast to the definition of net neutrality.

It's already insulting to declare opposition to neutrality a position that's held by "extremists," but Zuckerberg takes things one step further by declaring these folks are engaged in a form of "intellectual purity" that's hurting the poor:

"Are we a community that values people and improving people’s lives above all else, or are we a community that puts the intellectual purity of technology above people’s needs?"

That's numerous times over the last few months where Zuckerberg has implied that if you're opposed to zero rating and Facebook's vision of a new Compuserve for developing nations, you're opposed to helping the poor. That's simply disingenuous and obnoxious. Nothing about opposing zero rating "prevents access," and nobody is stopping Facebook or Internet.org from funding discounted access to the real Internet. Zuckerberg's basically cementing his company's gatekeeper authority over developing nations for generations to come under the bright banner of selfless altruism, then taking offense when told that these countries might just be better off with un-apertured, subsidized access to the real Internet.

Filed Under: internet.org, mark zuckerberg, net neutrality, poor, security, winners and losers, zero rating
Companies: facebook, internet.org