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
See more stories about...
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 »
IN ADDITION TO DNC AND DCCC
Clinton Campaign Also Hacked
2 hours ago
THE LATEST
1.5 MILLION MORE TUNED IN FOR TRUMP
More People Watched Trump’s Acceptance Speech
3 hours ago
THE DETAILS

Hillary Clinton hopes that television ratings for the candidates' acceptance speeches at their respective conventions aren't foreshadowing of similar results at the polls in November. Preliminary results from the networks and cable channels show that 34.9 million people tuned in for Donald Trump's acceptance speech while 33.3 million watched Clinton accept the Democratic nomination. However, it is still possible that the numbers are closer than these ratings suggest: the numbers don't include ratings from PBS or CSPAN, which tend to attract more Democratic viewers.

Source:
AFFECTS NOVEMBER ELECTIONS
North Carolina Voter ID Law Struck Down
6 hours ago
THE DETAILS

The US Fourth Circuit Court of Appeals on Friday overturned North Carolina's 2013 voter ID law, saying it was passed with “discriminatory intent." The decision sends the case back to the district judge who initially dismissed challenges to the law. "The ruling prohibits North Carolina from requiring photo identification from voters in future elections, including the November 2016 general election, restores a week of early voting and preregistration for 16- and 17-year-olds, and ensures that same-day registration and out-of-precinct voting will remain in effect."

Source:
NORTH DAKOTA TO ILLINOIS
Massive Oil Pipeline Approved for the Midwest
7 hours ago
THE DETAILS

An oil pipeline almost as long as the much-debated Keystone XL has won final approval to transport crude from North Dakota to Illinois, traveling through South Dakota and Iowa along the way. "The U.S. Army Corps of Engineers gave the final blessing to the Dakota Access pipeline on Tuesday. Developers now have the last set of permits they need to build through the small portion of federal land the line crosses, which includes major waterways like the Mississippi and the Missouri rivers. The so-called Bakken pipeline goes through mostly state and private land."

Source:
DISAPPOINTING RESULTS
GDP Grew at 1.2% in Q2
8 hours ago
THE DETAILS

The U.S. economy grew at an anemic 1.2% in the second quarter, "well below the 2.6% growth economists surveyed by The Wall Street Journal had forecast." Consumer spending was "robust," but it was offset by "cautious" business investment. "Since the recession ended seven years ago, the expansion has failed to achieve the breakout growth seen in past recoveries. "The average annual growth rate during the current business cycle, 2.1%, remains the weakest of any expansion since at least 1949."

Source:
×