Bad News for Comcast Deal in FCC Report

The cable giant did well in the study, but it undercuts a Comcast argument for buying Time Warner Cable.

POMPANO BEACH, FL - FEBRUARY 13: A Comcast truck is seen parked at one of their centers on February 13, 2014 in Pompano Beach, Florida. Today, Comcast announced a $45-billion offer for Time Warner Cable. (Photo by Joe Raedle/Getty Images)
National Journal
Brendan Sasso
June 18, 2014, 12:19 p.m.

Com­cast per­formed well in an In­ter­net speed study re­leased Wed­nes­day, but the fed­er­al re­port could still be a blow to the cable gi­ant’s plan to buy Time Warner Cable.

The Fed­er­al Com­mu­nic­a­tions Com­mis­sion re­port found that DSL con­tin­ues to lag be­hind oth­er In­ter­net ser­vice op­tions such as cable and fiber, call­ing in­to ques­tion just how com­pet­it­ive the broad­band mar­ket really is.

A key ar­gu­ment that Com­cast is mak­ing for why it should be al­lowed to buy Time Warner Cable is that con­sumers have an ar­ray of oth­er choices for In­ter­net ser­vice. The Justice De­part­ment and FCC are cur­rently re­view­ing wheth­er the mer­ger of the top two cable com­pan­ies would il­leg­ally sup­press com­pet­i­tion.

In testi­mony be­fore the Sen­ate Ju­di­ciary Com­mit­tee earli­er this year, Dav­id Co­hen, Com­cast’s ex­ec­ut­ive vice pres­id­ent, said DSL pro­viders are “for­mid­able broad­band com­pet­it­ors.”

“While some may scoff at the com­pet­it­ive vi­ab­il­ity of DSL ser­vice, mar­ket real­it­ies and in­vest­ments by tel­cos in DSL tech­no­logy that have led to in­creased DSL speeds re­but those con­cerns,” Co­hen said.

While the re­port found that many In­ter­net ser­vices have got­ten faster in re­cent years, DSL pro­viders showed “little or no im­prove­ment in max­im­um speeds.”

Ad­di­tion­ally, DSL pro­viders are ad­vert­ising faster speeds than they ac­tu­ally de­liv­er, the agency found. Ac­cord­ing to the re­port, DSL pro­viders were the only com­pan­ies to fail to de­liv­er at least 90 per­cent of the speeds that they ad­vert­ised.

The re­port also found that con­sumers are in­creas­ingly de­mand­ing faster ser­vice, fur­ther un­der­cut­ting Com­cast’s claim that many con­sumers would be will­ing to switch to DSL.

Com­cast and oth­er cable pro­viders per­formed well in the study. Com­cast de­livered 108 per­cent of its ad­vert­ised down­load speeds dur­ing peak hours, a slight im­prove­ment over last year’s res­ults.

The FCC sent let­ters to the DSL pro­viders and oth­er un­der­per­form­ing com­pan­ies de­mand­ing more in­form­a­tion about why their cus­tom­ers aren’t get­ting the speeds they paid for.

In a state­ment, FCC Chair­man Tom Wheel­er said it is “en­cour­aging” that some pro­viders are im­prov­ing their ser­vices but he is “con­cerned that some pro­viders are fail­ing to de­liv­er con­sist­ent speeds to con­sumers that are com­men­sur­ate to their ad­vert­ised speeds.”

Har­old Feld, the seni­or vice pres­id­ent of con­sumer-ad­vocacy group Pub­lic Know­ledge, said the re­port is “one more piece of evid­ence” that the gov­ern­ment should kill the cable mer­ger.

“Cable broad­band is not a dir­ect com­pet­it­or to DSL in a rel­ev­ant way,” he said, point­ing to “in­her­ent lim­it­a­tions” in DSL tech­no­logy.

He ad­ded that the re­port could ac­tu­ally bol­ster AT&T’s case for why it should be al­lowed to buy Dir­ecTV. AT&T has ar­gued it needs ad­di­tion­al rev­en­ue to up­grade its DSL net­work.

Com­cast did not re­spond to a re­quest to com­ment, but the Na­tion­al Cable and Tele­com­mu­nic­a­tions As­so­ci­ation, a lob­by­ing group that rep­res­ents Com­cast and oth­ers, pub­lished a blog post tout­ing the strong per­form­ance of cable pro­viders.

“The good news from a cable per­spect­ive is that pro­viders are de­liv­er­ing speeds that con­sist­ently meet or ex­ceed ad­vert­ised num­bers,” the as­so­ci­ation wrote.

What We're Following See More »
TAKING A LONG VIEW TO SOUTHERN STATES
In Dropout Speech, Santorum Endorses Rubio
1 days ago
THE DETAILS

As expected after earlier reports on Wednesday, Rick Santorum ended his presidential bid. But less expected: he threw his support to Marco Rubio. After noting he spoke with Rubio the day before for an hour, he said, “Someone who has a real understanding of the threat of ISIS, real understanding of the threat of fundamentalist Islam, and has experience, one of the things I wanted was someone who has experience in this area, and that’s why we decided to support Marco Rubio.” It doesn’t figure to help Rubio much in New Hampshire, but the Santorum nod could pay dividends down the road in southern states.

Source:
‘PITTING PEOPLE AGAINST EACH OTHER’
Rubio, Trump Question Obama’s Mosque Visit
1 days ago
WHY WE CARE

President Obama’s decision to visit a mosque in Baltimore today was never going to be completely uncontroversial. And Donald Trump and Marco Rubio proved it. “Maybe he feels comfortable there,” Trump told interviewer Greta van Susteren on Fox News. “There are a lot of places he can go, and he chose a mosque.” And in New Hampshire, Rubio said of Obama, “Always pitting people against each other. Always. Look at today – he gave a speech at a mosque. Oh, you know, basically implying that America is discriminating against Muslims.”

Source:
THE TIME IS NOW, TED
Cruz Must Max Out on Evangelical Support through Early March
1 days ago
WHY WE CARE

For Ted Cruz, a strong showing in New Hampshire would be nice, but not necessary. That’s because evangelical voters only make up 21% of the Granite State’s population. “But from the February 20 South Carolina primary through March 15, there are nine states (South Carolina, Alabama, Arkansas, Georgia, Oklahoma, Tennessee, Kentucky, Mississippi, and North Carolina) with an estimated white-Evangelical percentage of the GOP electorate over 60 percent, and another four (Texas, Kansas, Louisiana, and Missouri) that come in over 50 percent.” But after that, he better be in the catbird’s seat, because only four smaller states remain with evangelical voter majorities.

Source:
CHRISTIE, BUSH TRYING TO TAKE HIM DOWN
Rubio Now Winning the ‘Endorsement Primary’
1 days ago
WHY WE CARE

Since his strong third-place finish in Iowa, Marco Rubio has won endorsement by two sitting senators and two congressmen, putting him in the lead for the first time of FiveThirtyEight‘s Endorsement Tracker. “Some politicians had put early support behind Jeb Bush — he had led [their] list since August — but since January the only new endorsement he has received was from former presidential candidate Sen. Lindsey Graham.” Meanwhile, the New York Times reports that fueled by resentment, “members of the Bush and Christie campaigns have communicated about their mutual desire to halt … Rubio’s rise in the polls.”

Source:
ARE YOU THE GATEKEEPER?
Sanders: Obama Is a Progressive
1 days ago
THE LATEST

“Do I think President Obama is a progressive? Yeah, I do,” said Bernie Sanders, in response to a direct question in tonight’s debate. “I think they’ve done a great job.” But Hillary Clinton wasn’t content to sit out the latest chapter in the great debate over the definition of progressivism. “In your definition, with you being the gatekeeper of progressivism, I don’t think anyone else fits that definition,” she told Sanders.

×