VARIETY OF VIEWS EMERGE IN COMMENTS ON PROPOSED CABLE MERGER
Coalition of 38 national and state groups, including Consumers Union, Cal. Public Interest Research Group, Center for Digital Democracy (CDD), Mass. Consumer Coalition, Empire State Consumer Assn., Tex. Watch and Va. Citizens Consumer Assn., came out against proposed merger of AT&T Broadband and Comcast. Comments on $72 billion deal were due on at FCC Mon., replies May 14. Merger would combine first and 3rd largest cable companies in U.S. “A combined AT&T Comcast, the nation’s largest cable company, would have the power to continue raising prices, limit choice in programming, dictate technology standards and network architecture, and ignore customer service issues,” said Mark Cooper, dir. of research for Consumer Federation of America. Organizations argued that cable industry and FCC in past had believed erroneously that alternative technologies such as satellite and DSL would discipline cable’s market power. Groups said cable “still dominates” video and high-speed Internet service and has charged low price for digital video and high prices for cable modem, although each service costs “substantially the same.” They said efficiencies claimed by Comcast Pres. Brian Roberts in recent Senate hearing (CD April 24 p3) were “not likely to be passed on to consumers because of a lack of competition,” that open set-top box standard wouldn’t be advanced by merger and that open communications networks would suffer setback as result of deal. Merger would increase level of concentration in regional and national markets by 5 times DoJ threshold, they said.
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American Cable Assn. (ACA) said merger “presents many exciting possibilities for consumers, including for customers served by smaller cable businesses,” but worried that AT&T would control Headend-In-The-Sky (HITS) digital distribution and have “ultimate leverage” over many smaller cable businesses and consumers. ACA asked FCC to ensure that combined company would continue to make HITS services available to smaller cable systems for “fair and reasonable prices, terms and conditions.” It asked whether company would permit program distribution currently withheld from small cable systems because of exclusive contracts. Progress & Freedom Foundation said Commission should view proposed merger as “procompetitive, efficiency-enhancing and consistent with the public interest,” saying it would promote more facilities-based competition for high-speed Internet access and other broadband service, as well as more facilities-based competition in local telephone market. “As the Commission itself has recognized over and over again, it is facilities-based competition -- not regulated resale -- that, in the long run, will most benefit consumers by stimulating investment and innovation,” foundation wrote. It also said FCC shouldn’t impose conditions on merger, while consumer groups in past, at very least, have called for “open access” conditions. Comcast has rejected “open access” conditions.
Verizon filing said Commission first had to level playing field between cable and DSL and other broadband service providers in rules for broadband. With current regulatory regime, merger would have to be denied, carrier said, because its dominant position in negotiations with video producers and Internet content providers would hamper Verizon and other companies like it from attracting that content. “We're not going to be in a position to counter their negotiating power,” Verizon official said. Sacramento Metropolitan Cable TV Commission, in ex parte presentation to FCC, said it had concerns about higher cable TV rates “accompanied by very poor customer service” now delivered by AT&T Broadband. Sacramento group asked FCC for regulatory oversight of customer service on cable modem offering by combined AT&T Comcast. Braintree Electric Light Dept. (BELD) Broadband, single cable system with 4,300 customers in Braintree, Mass., said AT&T Broadband’s “continuing denial” of access to New England Cable News because of exclusive agreement showed how merger could hurt diversity and competition.