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  (Source: The Cable Show)
Comcast's purchase of Time Warner Cable is facing regulatory scrutiny from the FCC

For Time Warner Cable Inc. (TWC) subscribers dreading the pending takeover by Comcast Corp. (CMCSA), the news isn't pretty.  Hopes to avoid getting the "Comcast experience and witnessing the company's beloved customer service appear to be waning as America's largest cable company ratchets up its charm offensive in Washington, D.C. -- and it's "generous" gifts to federal regulators.
 
I. Approval at Any Cost?
 
Having already paid millions to members of Congress in hopes of swaying regulatory decisions regarding the proposed $45.2B USD deal, Comcast appeared to make yet another brazen move this week, donating $110,000 as a "presenting sponsor" for a lavish dinner party honoring U.S. Federal Communications Commission (FCC) Commissioner Mignon L. Clyburne.  Time Warner Cable chipped in a more modest $22,000 USD.
 
The donations were reported on by Politico and Fierce Cable, among others, following a blog by the group Citizens for Responsibility and Ethics in Washington (CREW).
 
The dinner in question -- the Walter Kaitz Foundation’s annual dinner -- is scheduled to be held in September.  The organization -- which "seeks to advance the contributions of women and multi-ethnic professionals in cable" -- is expected to give the "diversity advocate" award to Commissioner Clyburne for her work at the FCC, and prior to that at the Public Service Commission of South Carolina.

Mignon Clyburne
FCC Commissioner Mignon Clyburne [Image Source: Daily Yonder]

Comcast scoffed at critics of the donation arguing it has "long standing financial commitments" to the dinner.  Comcast spokeswoman Sena Fitzmaurice blasted the reports, stating:
 
We've given at the highest level for several years.  We are the industry leader—in our size and in our commitment to diversity—and it is important that we reflect that in our financial support of the Kaitz Foundation. As the industry has consolidated over time, especially after we became the largest operator in 2003, and then again with acquiring NBCUniversal in 2011, we’ve taken a larger role in giving to Kaitz.
 
The identity of the honorees is irrelevant to our long standing financial commitments.  We absolutely dispute the notion that our contributions have anything to do with currying favor with Commissioner Clyburn or any honoree. Such claims are insulting and not supported by any evidence. They are purely fiction.
 
She also pointed out to Newsweek that Comcast gave $140,000 USD, $145,000 USD, and $122,500 USD in 2013, 2012, and 2011, respectively.  Hence this year's donation is actually somewhat smaller than previous years.
 
As the guest of honor at the dinner, Comcast's name will be prominently advertised, and it will be able to invite up to 40 guests.
 
Kaitz Foundation spokesman Bobby Amirshahi similarly brushed of the critics, saying:
 
The [foundation] is the centerpiece of this industry’s efforts to not just recruit but to advance and train people of multi-ethnicity.  The reality is the honoree was not a consideration for us as one of many companies that supported [the dinner.]
 
The donations were disclosed in a filing to the U.S. Senate by Comcast and were pledged in May.  A month later in June, Commissioner Clyburne argued that sometimes monopolies could be "natural" and healthy for consumers, if properly monitored by the government.  



She states:

Well from a regulatory standpoint you have to look at the marketplace. Sometimes there's natural monopolies or oligopolies
 
There are instances... there are entities... where it may makes sense for their to be one or two in the market.
 
Take your uh... primary electric and gas company... there's usually one or two in the area.  You might have marketers that provide you gas.  But in terms of the infrastructure it usually is that legacy ... legacy industrial-owned utility.   It is quite natural. You don't want ten companies digging up the ground at different times.  So it is natural in some instances for their to be a monopoly.
 
In this case [Sirius XM] the commission concluded before I came in... that this might be a natural monopoly...
 
You've got a regulatory body in place that says, "Ok. We're going to look closely at this monopoly to ensure that the consumers that are engaging in this space are protected."
 
Again, that's why you have bodies like mine because we know markers are not perfect...
 
We will put We will evaluate the [Comcast-Time Warner] application and we will put the notice to public so the public can weigh in on this.

To be fair, the donation may not necessarily be causative of Commissioner Clyburne's apparent support of the deal, although it can't hurt.  As a Democratic commissioner she may face pressure to approve the deal from President Obama.  Comcast's chief lobbyist is a top Obama donor.  His fundraising donated more than a million to the Obama campaign in a single event alone.
 
Also a potential factor is the example Comcast set with Meredith Attwell Baker, a former Bush Administration official and Obama appointee.  After Ms. Baker helped secure Comcast approval of its NBC Universal purchase in 2011, Comcast returned the favor appointing her to a much better paying job as one of its lobbyists.
 
II. Let's Make a Deal
 
The merger proposal is one of two major market consolidations on the docket (the other is the $48.5B USD sale of DirectTV (DTV) to AT&T, Inc. (T)).  A third proposal -- a possible buyout of Time Warner Inc. (TWX) by News Corp.'s (NWS) Fox is currently in the works as well.  Rupert Murdoch's firm bid $80B USD to try to acquire Time Warner recently, but were rebuffed.  The media mogul is reportedly considering testing the waters with a larger bid soon.
 
Together these deals could impact the lives of more than 80 million Americans, or roughly 1 in 4 U.S. citizens.
 
The Comcast deal, if approved, is expected to give the company more than a third (33 to 50 percent depending on whose numbers you trust) of the broadband internet market and roughly 30 percent of the paid television market.  Remove satellite TV and Comcast would control roughly 60 percent of the cable TV market, according to Consumer Reports.

Comcast Getty Images
Comcast breached some of its regulatory promises following its NBC Universal purchase. 
[Image Source: Getty Images]

The push for approval is being led by Comcast's top lobbyist, David Cohen.  Mr. Cohen last year pushed $18.8M USD into the federal political arena, according to the Center for Responsive Politics.  That tidy sum was large enough to make Comcast the seventh largest corporate lobbyist.
 
Mr. Cohen won acclaim among Washington, D.C.'s elite special interests when he managed to push through Comcast's controversial $30B USD deal to acquire 80 percent of NBC Universal back in 2011.  His strategy back then was similar to the one now -- flood Congress with cash and make strategic investments to placate the FCC and the U.S. Department of Justice (DOJ) -- the primary two antitrust enforcement bodies capable of shooting down U.S. telecom deals.
 
This time around Comcast might have a tougher time selling its case to the public, at least.  After making big promises during the NBC Universal acquisition, it ended up going back on some of its pledges, a matter which the FCC eventually settled by allowing Comcast to pay a "voluntary" $800,000 USD fine.
 
David Cohen is already getting creative to try to sell the deal.  At one point he told reporters that Comcast and Time Warner did not compete against each other in any market, stating:
 
Comcast and Time Warner Cable do not compete against each other in any area. So this transaction will not result in any reduction in consumer choice in any market.
 
While that claim may be true in many markets, Comcast's own map admits that both companies compete in Louisville, Kentucky; St. Louis, Missouri; and New York City, New York.

Comcast and Time Warner
Comcast's own map admits that the pair compete in some major markets, including New York City.
[Image Source: Comcast]

Another angle tried by Mr. Cohen and his allies is to argue that wireless broadband and wireless video services are viable alternatives to broadband home internet and cable TV.  Time Warner Cable CEO Robert Marcus argued to Congress in May:
 
I would also note that mobile wireless is rapidly becoming a viable alternative to cable broadband given the ever-increasing capabilities of LTE as well as continued advances in compression technology.
 
Critics like Timothy Stenovec from The Huffington Post have called that claim "hilariously absurd" as it fails to account for the fact that most users have data caps and are not free to liberally consume wireless video or data at high speed rates.
 
III. Opposition Grows, DISH Piles On
 
Comcast who has inflated its profits over the last four years by raising basic rates by as much as 70 percent in markets it tightly controls, hasn't promised that customers will see any major price savings from the deal.  However, it claims that they may see peripheral benefits such as high data speeds and improved security.  Given Comcast's history of throttling users, though, claims of speed increases should be taken with a grain of salt.
 
A number of groups including The Free Press [source; PDF], the International Brotherhood of Electrical Workers (IBEW) [source], and Public Knowledge [source] have all written letters to the FCC and/or Congress in opposition of the deal.
Comcast Public Knowledge
[Image Source: Public Knowledge]

Netflix, Inc. (NFLX) also blasted the deal as anticompetitive.

Most recently, satellite cable firm DISH Network Corp. (DISH) blasted the merger in a letter to the FCC.  DISH's deputy counsel Jeffrey Blum addressed the Commission's secretary Marlene H. Dortch, writing:

The ability for Dish and other nondominant players to compete in the broadband and video markets will be impacted by how the commission responds to the mergers before it.  There do not appear to be any conditions that would remedy the harms that would result from the merger.

Comcast spokeswoman Sena Fitzmaurice fired back:

Dish not wanting stronger competitors isn’t surprising and it isn’t new.

DISH also voiced opposition to the AT&T purchase of DirectTV.

Sources: CREW, Politico, Fierce Cable, Newsweek



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Yes they do compete
By Solandri on 8/13/2014 9:19:22 PM , Rating: 2
quote:
Comcast and Time Warner Cable do not compete against each other in any area. So this transaction will not result in any reduction in consumer choice in any market.

This statement presumes their only customers are the folks getting cable TV and Internet service from them.

By requiring Internet companies like Netflix pay them for better access to their customer base, Comcast has turned Netflix and every other Internet website out there into customers. Netflix now has the option to pay Comcast, Pay Time Warner, or pay both. Thus they compete with each other, and their merger would reduce competition. As long as they think Internet companies should pay them, they are competitors.




RE: Yes they do compete
By Samus on 8/13/2014 11:27:17 PM , Rating: 2
According to the map, they compete in Omaha/Council Bluffs, Memphis, and New York City. Those are all huge markets. Cox competes in the Omaha market, but Memphis will no longer have a competing cable provider. New York has plenty of competitors, but either way, Comcast/Time Warner will strongarm the competition there with a complete monopoly.

This merger should not happen. It's even more ridiculous as AT&T trying to buy T-mobile; this is like AT&T and Verizon merging.

This has already happened in the hard disk industry, and now we're all being screwed by the duopoly of WD and Seagate.


RE: Yes they do compete
By kamk44 on 8/14/2014 10:48:40 AM , Rating: 2
Do they actually compete? I think they each provide service within those larger areas but the actual coverage does not overlap. If you are in NYC with TW I don't think you can switch to Comcast. The main problem I have with the merger is that as companies get bigger, especially with the track record of these two, they get worse from a customer point of view (which includes content providers) and have even more political clout.


RE: Yes they do compete
By The Melon on 8/15/2014 11:56:21 AM , Rating: 2
That spot on the map is actually Kansas City[KS,MO] not Omaha/Council Bluffs. Of course I did not look at a list of their service areas so that map may be wrong.

But I do agree that this merger will do no good at all. In the Dallas/Fort Worth area Time Warner has "competition" in Verizon or AT&T. Calling it competition is generous though as AT&T is not the least bit reliable and Verizon is not very available even in their service areas.

All I have to look forward to in this merger is a reduction in QoS and an increase in prices.

It is really sad because in my area Time Warner has been more reliable than most commercial circuits that I have experience with. In 8 years have had 2-3 outages that lasted more than 1 minute, one of which was 2 days because they had to replace a main line on my street that was damaged in construction, and only changed IP addresses when I have replaced firewalls.


RE: Yes they do compete
By AntiM on 8/14/2014 10:08:36 AM , Rating: 2
Comcast and Time Warner Cable do not compete against each other in any area. So this transaction will not result in any reduction in consumer choice in any market.

That's just the problem isn't it. Why don't they compete? Collusion maybe? I thought that was illegal.


RE: Yes they do compete
By gamerk2 on 8/14/2014 11:17:15 AM , Rating: 2
Only if they openly conspire to set prices.

Understand the first rule: NEVER COMPETE ON PRICE. You compete on "features" or "service" or maybe "quality", but never price. All implicit mind you.

Of course, if one company suffers a "DRAM Shortage" and raises prices in response, the others, naturally, must do the same, because they must have the same "DRAM Shortage".

You see the same exact thing in every industry, especially service based ones (Airlines are the most obvious example).

Understand what happens when you allow small business to get gobbled up due to lack of regulation? Small and medium business keeps the big boys honest, as they have to keep prices down to compete. When those small/medium business get acquired, however (usually via a direct buyout (bribe) or hostile takeover), there is no longer any need to keep costs down.

Its the same in every industry: All the small players are gone, and prices are up across the board. Then when the industry collapses due to its own excess, the Feds have to step in to keep the industry afloat, with us footing the bill.

All this has occurred over the last 40 years, since "Supply-Side" business views became the norm by politicians.


RE: Yes they do compete
By JasonMick (blog) on 8/14/2014 11:59:02 AM , Rating: 2
quote:
Only if they openly conspire to set prices.
If you'd have read the article, you'd have notice that this not only CAN happen, it HAS HAPPENED on a massive scale in markets Comcast fully or partially controls.
quote:
Comcast who has inflated its profits over the last four years by raising basic rates by as much as 70 percent in markets it tightly controls , hasn't promised that customers will see any major price savings from the deal.
People in the U.S. fear regulation, but they fail to notice that the actions their two "choices" (really the same choice) politically are taking aren't true regulation at all, just like their system is increasingly straying away from true capitalism.

Cronyism and corruption is the law of the land, increasingly in America today.

Regulation? HA, maybe the government passes "regulations" that push small businesses out of business to the benefit of corporations. But that's not really regulation at all... it's the government behaving as a protectionist racket... sort of like the mafia, but on a much bigger scale.

Comcast makes billions off of breaching its promises to the government to not abuse the NBC Universal acquisition powers it obtained. Typically when citizens break promises with the government or small businesses, they're ask to pay 200% or more in damages.

Is it asked to return 200% of its ill-gotten gains? 100%? 10%? 1%? Nope.

It "volunteers" to pay $800,000 USD and then hires some shills from the FCC.

If you want to read more about the government's current operating philosophy Google the writings of Matt Taibi and also read about "the Holder Memo" (from the Clinton era, when he was a young prosecutor at the DOJ and championed a movement to "cut deals" with corporate criminals, not prosecute them).

Here's a good place to start:
http://onpoint.wbur.org/2014/07/14/matt-taibbi-on-...


Imagine
By inighthawki on 8/13/2014 10:47:56 PM , Rating: 5
Imagine what they could do if they took money from things like this and actually reinvested it into a better network infrastructure... Then they wouldn't HAVE to spend money on things like this.




RE: Imagine
By tamalero on 8/16/2014 4:54:41 AM , Rating: 2
"too expensive, and that would mean giving better service.. NO WAY!"


Is anyone surprised?
By dsquare86 on 8/14/2014 6:08:55 AM , Rating: 2
If you thought that this sort of bribery of public officials hasn't been going on all along then you have had your head in the sand. Comcast will get what they want because they have a big checkbook and plenty of public officials willing to accept their money.




RE: Is anyone surprised?
By Shadowself on 8/14/2014 9:10:23 AM , Rating: 2
This case isn't about bribery. Not at all.

Yes, bribery (and the more pernicious lots and lots of small gifts) does happen, but that's not what this is about.

It's about access. Access gets you a direct chance to influence.

With COMCAST's donation to the dinner it gets to send 40 people to that dinner. You'd better believe that some of those are highly trained and extremely motivated lobbying people (probably each making $500 per hour or more). They will have direct access to talk to the Commissioner off the record. They will have her as a captive audience for part of the event. That buys A LOT of time to influence her thinking.

Before the event these individuals will do many, many hours of research into the Commissioner. They will know virtually everything about her: what her likes are; what her dislikes are; what her hot buttons are; and what her goals are. They will use all this to get her to see things COMCAST's way.

It matters very little that COMCAST says that they've paid similar amounts for the past few years. All that really says is that they've been doing this same thing for several years.


RE: Is anyone surprised?
By ritualm on 8/14/2014 12:42:09 PM , Rating: 2
quote:
This case isn't about bribery. Not at all.

It's not even about "access" or whatever fancy schmancy term you want to use here.

Let's not try to sugarcoat it for what it really is: graft and bribery. It's all perfectly and transparently legal only because the playing field is already too stacked against the population at large.

These guys get to do it all the time. When they eventually get caught, they're slapped with several thousand dollars in fines at most. We do it and we're made an example by the Feds, facing a ruined life behind bars. Those federal laws against bribery are there so that WE, not THEY, have to fall in line. Besides, when THEY do it, they don't have to admit any wrongdoing.


CHCHANGE
By Cluebat on 8/14/2014 9:03:22 AM , Rating: 5
They said that this was going to happen if I voted for Romney.




Third World Corruption
By Uncle Nine on 8/14/2014 9:34:28 AM , Rating: 2
If we allow the Comcast merger, we will have blatantly and absolutely become a corrupt, third world country. America already trails most of the rest of the world in internet speed, quality, technology and cost. Unbelievable. And internet service is already the most profitable product these monopolies sell--by far. With terrible quality, performance and high cost.

If we allow this merger, consumers will watch the cable and telecom monopolies impose a $1K or $2K or $3K annual tax on consumers without any vote of the people. Imposed by regulators bribed by Comcast and others. This is not an exaggeration. David Cohen and the industry lobbying organization have already publicly predicted this.

In the Fall, vote for Representatives and Senators and local officials that promise to stop this corruption. Vote against the cable lackeys. We're screwed if we let this go on.




RE: Third World Corruption
By Spookster on 8/14/2014 4:28:13 PM , Rating: 2
What rock have you been hiding under for the last century? This kind and level of corruption has existed here in the US for a very long time.


Correction...
By tjcinnamon on 8/15/2014 11:34:15 PM , Rating: 2
They are wooing her with free speech




RE: Correction...
By kickoff on 8/19/2014 3:22:36 PM , Rating: 2
LMAO!!! Nice.


'murica
By B3an on 8/13/2014 9:58:13 PM , Rating: 3
So glad i live in a civilised country and with loads of fair competition and don't have to put up with any of this ****.




Natural Monopolies my $@#
By jRaskell on 8/14/2014 9:55:06 AM , Rating: 1
quote:
So it is natural in some instances for their to be a monopoly.


Where I live, Comcast is my only option for High Speed Internet (I do not include satellite because it simply isn't even remotely comparable in performance). I have a buddy who lives in an area that also has Verizon FIOS.

Prior to FIOS becoming available in his area, we had similar cable bills, and similar abysmal customer service experiences from Comcast. After FIOS was made available in his area, his Comcast experience took a complete 180 degree turn. After calling them to disconnect his service to switch to FIOS, they cut his bill by roughly 30%. The reliability of the service for him has improved drastically as well.

For me, same old crap. Zero flexibility in billing. The cable service itself is ok, though not great. Customer Service is a complete joke. It's like I'm dealing with a completely different company than my buddy. Natural monopolies good for the consumer? Absolute garbage. Mignon Clyburne, you are nothing more than a douchebag lackey in Corporate America's pockets. But then again, what politician isn't? So disappointing seeing the road our country is going down.




RE: Natural Monopolies my $@#
By Spuke on 8/14/2014 12:31:45 PM , Rating: 2
It might actually be worth buying one of the Verizon unlimited plans off ebay.


Corruption
By Flunk on 8/14/2014 9:51:32 AM , Rating: 2
When this sort of corruption is found out everyone involved should be fired on the spot and criminal charges laid. How is it that politicians in the USA get away with so much? In my country (Canada) if something like this was found out the outrage would be immediate.




For a different reason...
By Madlyb on 8/14/2014 1:47:28 PM , Rating: 2
I am with Comcast on this one. Why would they need to spend more money...when the industry already pretty owns the FCC?




The Musings of a Socialist
By EricMartello on 8/19/2014 3:11:38 PM , Rating: 2
quote:
Well from a regulatory standpoint you have to look at the marketplace. Sometimes there's natural monopolies or oligopolies


In a properly managed capitalist system, a particular company dominating an industry largely due to being the only game in down doesn't and shouldn't preclude new businesses with new ideas from making an effort to try said ideas in the marketplace.

This statement is basically an endorsement of protectionism, which is the FCC's prime directive. It's secondary directive includes brushing the first amendment aside and imposing "decency" standards for what can and can't be shown on TV broadcasts.

quote:
There are instances... there are entities... where it may makes sense for their to be one or two in the market.


I guess this makes sense if it is the entire justification for the existence of your organization, the FCC.

quote:
Take your uh... primary electric and gas company... there's usually one or two in the area. You might have marketers that provide you gas. But in terms of the infrastructure it usually is that legacy ... legacy industrial-owned utility.


Wait, what? Obama told us that we didn't build that and that government built it. Without government to wipe our collective a55es for us we would be hopelessly lost. [sarcasm_tag]

The fact is that we have outdated federal regulations that allow energy companies to stay in business as monopolies with NO LEGITIMATE REASON. Even if there were people who had new ideas for methods of delivering energy that does not include pipelines or overhead wires - the insurmountable wall of red tape put in place to ensure the industry dinosaurs stay in business keeps innovation firmly at bay.

quote:
It is quite natural. You don't want ten companies digging up the ground at different times. So it is natural in some instances for their to be a monopoly.


Who's to say that the companies, if allowed to compete, would not find another way to lay cables that does not require digging up the ground? Perhaps a modular underground system that is installed once and can easily be upgraded in the future as needed without digging in populated areas.

You would have to be a complete fcuktard to actually believe that this pathetic endorsement of socialism is "natural" and then double down by saying it is "beneficial" to citizens.

quote:
In this case [Sirius XM] the commission concluded before I came in... that this might be a natural monopoly...


Right, because allowing potential competitors to launch their own satellites would be a real nuisance.

quote:
You've got a regulatory body in place that says, "Ok. We're going to look closely at this monopoly to ensure that the consumers that are engaging in this space are protected."


Ahhhh, here we go. Now the spin is in high gear. So all of these impediments to business - while simultaneously being an expansion of government regulatory power - are all about making it safe for those hapless consumers.

quote:
Again, that's why you have bodies like mine because we know markers are not perfect...


So the assumption is that a collective of idiots is perfect?

quote:
We will put We will evaluate the [Comcast-Time Warner] application and we will put the notice to public so the public can weigh in on this.


I move to abolish the FCC and deregulate our nations telecomm industry.




Wow
By room200 on 8/13/2014 9:35:24 PM , Rating: 1
I can't stand b!tches like this.




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