10 Even Worse Things You Don’t Know About Comcast’s Proposed Merger With Time Warner
Talk about revenge of the C students! The nation’s biggest telecom company, Comcast, which took over NBCUniversal a year ago, wants to buy the second biggest company, Time-Warner Cable, to create an empire of 30-million subscribers. That’s a third of all American homes with cable for its TV, internet service and telephones.
The merger has to be approved by federal regulators as being in the public interest and not a monopoly. How Comcast, the world’s largest media company and one of America’s most reviled companies threads that needle will be a sight to behold. Here are 10 things about its record—on customer service, profiteering, lobbying and sky-high political connections—that you may not know.
1. Worst Company In America Lists. It’s bad enough that both Comcast and Time-Warner are regularly cited on “worst company” lists and are at the bottom of consumer surveys for subscription television services. Consumerist, which ranked it the third worst company in 2013, has a string of reports describing the numerous ways that Comcast rips off subscribers—overpromising and underdelivering—including CEO Brian Roberts’s reply last fall blaming his customers for Comcast’s bad reputation, saying that it is noticed only because a giant company like his gets lots and lots of service calls.
2. Local Cable Already Is A Monopoly. As most cable users know, cable companies already are a monopoly. There is no alternative provider offering the mix of TV, internet and phone in most locales. The nation’s business press thinks that’s fine and has lauded Comcast—such as this Forbes article—for succeeding “by providing less customer service.” Industry spin like that has lead to a phenomenon rarely seen in online journalism: torrents of incredibly detailed comments describing just how much people despise Comcast and wish there was competition for telecom services.
“Comcast is one of the worst companies in this country,” replied Sandi D to that Forbes piece, saying how she spent nine weeks to resolve issues and only got a response after filing a formal complaint with the Better Business Bureau. Another writer, Allawash, was billed for data speeds that Comcast’s equipment wouldn’t deliver, telling Forbes, “They are relying on customer’s lack of knowledge to nickel and dime them.” Commenter Craig Oren said, “Half of the [customer service] representatives cannot speak English fluently.” Other websites have dozens and dozens of comments following Comcast articles with examples detailing their lousy experiences with the service, tech support and billing.
3. Their Pricing Is Predatory And Will Become Worse. Like big banks, Comcast is always looking for new fees and charges to top off its pricey monthly cost—which is four times as expensive as Europe. Last November, it announced a new $1.50 “broadcast TV fee” would begin in 2014 in addition to the monthly rate, Consumerist reported. “Others, like AT&T and Charter have similar tack-on fees, but unlike those companies, which have not benefitted in any way from increased retransmission fees charged by broadcasters, Comcast also happens to own NBC,” it said, making the point that Comcast already owns much of the content—such as coverage of the Olympics—that it’s charging double for.
What will customers receive for this fee? According to TechDirt.com, more commercials, especially when people are watching reruns of old TV series. “Basically, Comcast wants to flip the current advertising system upsides-down and have older episodes of primetime shows carrying the same commercial load as the most recent episode,” it reported. These are examples of why a deal giving Comcast—already America’s biggest cable company and internet-service provider—more monopoly power is bad for the public.
4. Comcast’s Contempt for Customers Is More Widespread. It’s astounding to read what Comcast executives have said about how they treat customers. Matt Strauss, senior vice-president of video services, boasted to The New York Post in December that their on-demand video service system disables fast-forwarding through commercials, which frustrates users but earns Comcast billions more from ad sales. In another example of its greed trumping the video viewers’ experience, The Wall Street Journal reports that it is talking to Netflix about making its shows available to subscribers, but Comcast won’t give Netflix access to the best-quality video streaming. “Netflix believes the technology is critical,” the Journal reported last October, adding, “No deal is imminent.”
5. Comcast’s Antics Include Its Broadband Service. Comcast isn’t just a TV company. It is a giant internet service provider, as well as phone company for some people. When it comes to the internet, TechDirt reports that Comcast “is still continuing its stealthy push toward capped broadband.” Techdirt is referring to charging people by how much data flows into their homes. The trade journals DSLreports.com said Comcast recently raised prices in “uncompetitive” rural media markets in Maine and Georgia. It said, “Augusta locals tell the local media they were surprised to suddenly see they had a 300 GB cap and had to pay $10 for every 50 GB they travel.” Predatory pricing like that is what accounts for its $64.76 in revenues in 2013, with $7.1 billion in net profits.
6. Comcast Blames Users For Its Predatory Pricing. As TechDirt notes, price gouging in media markets where Comcast is the only provider is accompanied by more ridiculous industry spin: Comcast “spokespeople ‘informing’ reporters that ‘most people’ don’t use that much data and that sneaking in usage caps is the ‘fairest’ way to make sure data hogs don’t use up all the Internet.” TechDirt’s bottom-line: “It’s just a way to make users pay more for their services.”
7. Comcast says Americans Don’t Want Faster Broadband. That explanation for price gouging is the tip of the distorted public relations iceberg that its top executive roll out. A Philadelphia Enquirer op-ed by lobbyist David Cohen touts mediocre broadband speeds by claiming that few people want anything faster. “The reality is that the United States is leading the way in speed, reach, and access—and doing so in a vast, rural nation that poses logistical connectivity challenges unlike any other country,” he wrote, ignoring the fact that much of world has far faster and much cheaper internet service. Comcast’s “triple-play” monthly packages—for TV, internet and phone—cost from $100 to $200, compared to France, for example, where it’s $40 a month and download speeds are 10 times faster and upload speeds are 20 times faster.
As Benjamin N. Cardozo School of Law Professor Susan Crawford detailed in Salon, the broadband service in the U.S.—provided by Comcast and other telecoms—is far inferior to most of Europe and East Asia. “In a nutshell, America has a series of regional cable monopolies controlling the pricing and capacity of fixed high-speed Internet access (and every other form of data reaching Americans),” she said.
8. Comcast Also Says People Don’t Want Alternatives. In that same Philadelphia Enquirer op-ed, lobbyist Cohen says that Americans don’t need what a real competitor, Google Fiber, is offering—a one-gigabit per second connection via a fiber-optic line. “Most websites can’t deliver content as fast as current networks move,” he said, adding, “most U.S. homes have routers that can’t support the speed that’s already available.” Nowhere in this dig at Google does Comcast’s lobbyist suggest that his company would upgrade the gear that it’s put in millions of homes unless user paid more to do it.
“Consumers are demanding faster speeds, though,” TechDirt countered. “When someone like Google comes along and offers a gigabit connection for $30/month, it’s delivering what consumers actually want: higher speeds and lower prices… Comcast frequently throw(s) data caps into the mix, which nullifies the positive effects of a speed boost.”
9. Comcast Wants The Next Big Telecom Monopoly. Comcast’s corporate goal in its pending takeover of Time Warner Cable goes far beyond subscriptions to television and video and today’s most popular internet uses. They want to stand like sentries at a toll gate that prevent people from crossing and using every emerging broadband-based tool unless they pay its fees. “The cable companies, with their inherently better bandwidth than phone company DSL lines, are becoming natural monopolies for wired-line internet access except in the few places where other providers have installed fiber lines,” wrote Dan Gillmor in The Guardian. Every era has its highways. In the late 1800s, it was the railroads and telegraph lines. In the mid-20th century, it was telephones, highways and broadcast networks. In the early 21st century, it’s the internet and broadband.
10. Comcast Has Political Friends In The Highest Places. By any objective standard, Comcast’s proposed takeover of Time Warner is not the public interest. But there are real reasons to more than suspect that neither the Federal Communications Commission nor the Department of Justice will veto the deal, citing anti-monopoly legal standards. The company’s power and influence is enormous. Last year, after the FCC approved the deal acquiring NBC Universal, FCC Commissioner Meredith Baker was hired by Comcast. Top lobbyist Cohen held a fundraiser at his home for President Obama in 2011 netting $1.2 million. And last summer, Obama and other top White House officials, including Attorney General Eric Holder—who heads the Justice Department that must approve Comcast’s merger with Time Warner—vacationed at Comcast CEO Brian Roberts’ Martha’s Vineyard home.
As The New York Post noted, “A source told us the reception was ‘very relaxed, with no speeches. People were sitting out on the terrace.’ Roberts has reportedly been close to the president for years and endorsed the Affordable Care Act.”