The Telecom Scam: 5 Behemoths That Strangle Innovation and Ensure You Pay Too Much for Bad Service
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Comcast has long coveted “content” or programming as part of its business model. While it failed in an effort to acquire Disney in 2004, it succeed securing interests in the Golf Channel, E! Entertainment, G-4, Style and regional sports cable services as well as the lifestyle website, Daily Candy. It also runs the Philadelphia Flyers NHL franchise and the NBA's Philadelphia 76ers. This whetted its appetite for a bigger play.
In its pre-acquisition days, NBC was one the nation’s leading media conglomerates. Owned by GE, it was one of the four major broadcast networks and controlled 33 local TV stations, the Spanish-language network, Telemundo, 13 cable networks (including USA, CNBC, Bravo, SyFy, MSNBC, CNBC, NBC Sports, Oxygen, the Weather Channel) as well as Universal, a major movie studio (and Focus Features, a boutique “art house” micro-studio) as well as the Universal theme parks in LA and Florida. In addition, it controls numerous websites including a stake in Hulu, the free online TV rebroadcaster owned with Fox and Disney; Hulu is now on the block.
The acquisition of the NBC-U may radically transform Comcast. It will likely raise to a new level the classic battle between the demands of the “pipe” and the “content.” It may also well spike a round of media mergers in which the big pipes, most notably AT&T and Verizon, will seek to acquire major content companies like Viacom and possibly Paramount or Sony Entertainment.
Most instructive, the federally approved merger made few demands on Comcast. It agreed to offer programming at competitive terms and not discriminate “in the transmission of an online video distributor's lawful network traffic to a Comcast broadband customer." However, it was not required to open its network to other ISPs or cable operators.
Comcast is introducing new programming services to hold onto its subscribers. One is called Xcalibur that integrates social media into TV viewing; it allows customers to “like” shows through Facebook and offer suggestions based on their friends’ recommendations. Another new service is X-Finity that offers significantly higher data transport speeds. For example, Extreme 50: downstream at 50 Mbps and upstream at 11 Mbps and Extreme 105: downstream at 116 Mbps and upstream at 11 Mbps. And, of course, one pays a higher rate for higher speeds.
This practice of metered pricing based on usage, or data caps, is effectively ending an Internet and web based on the principals of net neutrality. Exploiting a fictitious crisis over network capacity, a new pricing and value system has been introduced to turn the Internet into just another metered service. The Internet was originally conceived as a free public thoroughfare for digital communications. The telecom trust seeks to reduce it to a walled garden to maximize quarterly profits.
Time Warner Cable
Henry Luce and Briton Hadden founded Time magazine in 1923 and it peaked as a media conglomerate in the mid-2010s. At its height, its tentacles stretched from print publishing, music, TV programming and movies to a huge cable operation (offering telephone services) and a leading online network. Today, it is a shadow of its former self.
A half-century after it was founded, in 1972, Time-Life launched Home Box Office (HBO), a breakthrough monthly pay service, distributed through coax and microwave relays; in 1975, it was the first “cable” service to jump to satellite signal distribution. In 1989, Time merged with Warner Communications creating TimeWarner (TW) and, in 1996, it acquired Turner Broadcasting. In 1999, TW entered into a joint venture with AT&T to offer local telephone service in 33 states over its cable infrastructure.