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The Incredible Incompetence of Comcast
New Book Investigates How Big Companies Like AT&T Rip Us Off
A recent book by David Cay Johnston, The Fine Print, examines specifically how big companies have found ways to take advantage of the tax and regulatory systems to their benefit and to the detriment of consumers. The sad part - we don't even realize it.
Johnston discusses how big companies and their leaders exploit tax rules to re-distribute wealth upwards. Johnston also examines how this exploitation is almost never covered in the media, encouraging big companies to stoop to new lows in ripping off consumers. Telecommunications is one of the industries he covers in the new book.
In the first chapter (read the first chapter via Democracy Now!), Johnston describes how friend and journalist, Bruce Kushnick, came across twenty years' worth of telephone bills in his elderly aunt's possessions. Kushnick tracked the changes in her bills, systematically reviewing and comparing every charge. Kushnick found an array of confusing and cryptic "fees," "charges," and "taxes." The end result:
When he cross-checked his aunt’s telephone bills over the years, he could hardly believe the numbers. His aunt paid $9.51 for her local phone service in 1984. By 2003 her bill had swollen fourfold to $38.90. In the two decades since the breakup of the AT&T monopoly, even after adjusting for inflation, his aunt’s telephone cost $2.30 for each dollar paid in 1984. And that was without any charges for long-distance calls.
Johnston notes the method used by telecoms to increase prices over time:
EPB Fiber Increases Residential Speeds at No Extra Cost
Chattanooga's EPB Fiber just announced that current customers will receive a bump up in speed at no extra cost for its FI-Speed Internet service.
Residential customers on three separate tiers will automatically receive an increase in speed with no increase in price. The upgrade has already happened and customers can immediately take advantage of the new speeds.
According to an Ellis Smith article in the Chattanooga Times Press:
EPB, which offers gigabit fiber-optic Internet speeds across its Chattanooga service area, is upgrading customers to celebrate its third anniversary in the fiber-to-the-home market, said Harold DePriest, president and CEO.
“Enhancing our FI-Speed Internet was something we could do to celebrate, so we did it,” DePriest said.
This is the second time EPB has upgraded service to customers for free. In 2010, EPB upgraded 15 Mbps service to 30 Mbps service. Oh, and the prices haven't increased over the three years. Look back at your cable bills from Comcast, Time Warner Cable, or others, and you'll likely find that rate increases outnumber speed boosts.
New speed (and old rates) look like this:
$57.99 - 30 Mbps symmetrical increases to 50 Mbps symmetrical
$69.99 - 50 Mbps symmetrical increases to 100 Mbps symmetrical
$139.99 - 100 Mbps symmetrical increases to 250 Mbps symmetrical
As an added bonus to cutomers on the 1 Gbps symmetrical tier, their rates will drop from $349.99 to $299.99.
Fierce Telecom's Sean Buckly shared some perspective on the change:
While major cable MSOs, including local operator Comcast, have been responding to the higher speed FTTH offerings made by the likes of Verizon and their 300 Mbps tier, it's clear cable's best offerings don't come close to what EPB can offer.
Comcast's 105/20 tier is priced at $115 per month plus the price of the modem rental, while Chattanooga EPB customers can get 250 Mbps symmetric service for $139.
A Match to Watch: Tennis Channel v. Comcast
Back in 2010, we reported on the merger between Comcast and NBC, which was in the works at the time. One of the issues that came up was how programming is chosen.
At the time, the Tennis Channel had filed a suit against Comcast, alleging that Comcast did not make Tennis Channel programming available to as many subscribers as the Golf Channel and NBC Sports (both belong to Comcast). Comcast, under the Communications Act and Commission rules, is required to place channels owned by others on tiers equal to its own similar types of channels and can't play favorites.
The FCC had reviewed the case at various levels for two years (there was an appeal) and finally, in July of this year, issued a decision in favor of the Tennis Channel. The Tennis Channel alleged discrimination, Comcast argued the Tennis Channel was using the FCC to get out of a contract it wanted to escape. According to a Meg James LA Times article:
The FCC ordered Comcast to provide the Tennis Channel with distribution comparable to the two sports channels, which would effectively increase its coverage by about 18 million homes, and force Comcast to pay Tennis Channel millions of dollars more each year in programming fees.
It was the first time that a major cable operator has been found in violation of federal anti-discrimination program carriage rules that were established in 1993.
Comcast was ordered to remedy the situation within 45 days, a window that would make the Tennis Channel available in more homes during one of the biggest tennis events of the year, the U.S. Open in New York. The channel is currently available in about 34 million homes nationally.
Comcast immediately asked for a stay from the remedy, appealing to the U.S. Court of Appeals for the D.C. Circuit. Comcast was granted the stay while the case is argued on appeal. Once again, Comcast's army of lawyers are strategically using the court as a way to slow down an adversary's remedy.
Antitrust Allegations Against Comcast Nothing New
Ramsey County and Saint Paul Under Fire for Network Plan
Community Broadband Bits 10 - Vince Jordan from Longmont, Colorado
Chattanooga Gets 150 More Jobs... From Comcast
Just on the heels of Time Warner Cable announcing 81 new jobs in Kansas City in response to the newly competitive environment created by Google's Gig, we learned that Comcast is adding more jobs to its workforce in Chattanooga.
In talking points, the lobbyists and spokespeople for these major carriers often claim that community networks will result in less investment from the existing providers, not more. This is theoretically absurd, as competition drives increased investment. And empirically, we almost always see existing providers invest more as a response to losing their monopoly, not less.
According to Ellis Smith of the Chattanooga Times Free Press, 150 new jobs will be added by the end of the year. Ellis spoke with Jim Weigert, vice president and general manager of Comcast Chattanooga:
"Chattanooga is often at the top, not only in our division but across the country in terms of performance,” Weigert said. “Our strength and record of success made it a contributing factor when they selected a location."
Comcast and others, including AT&T, have had to step up their game in Chattanooga to keep customers who suddenly had a real choice.
Regardless of whether or not today's Chattanoogans connect to its publicly owned network, they benefit. Consumers get better service, affordable rates, and advanced technology simply because the network has created competition.
Community Broadband Bits 8 - Jim Moorehead of Mendocino County, California
Wall Street: Lack of Competition Allows Comcast to Raise Prices Whenever It Wants
The Lafayette Pro-Fiber Blog alerted us to a piercingly honest analysis from Wall Street. The article on SeekingAlpha.com, titled We-re Big Fans Of Comcast's Cash-Flow Generation captures one of the major policy failures of our time:
Comcast's traditional Cable Communications continues to grow and generate copious cash flow. Video revenue, Xfinity and other cable TV products, grew 2.8% to $5 billion, while High-Speed Internet revenue grew 8.9% to $2.4 billion. We're big fans of the firm's Video and High-Speed Internet businesses because both are either monopolies or duopolies in their respective markets. Further, we believe that both services have become so sticky and important to consumers that Comcast will be able to effectively raise prices year after year without seeing too much volume-related weakness.
Wow.
SeekingAlpha.com, describes itself as "…the premier website for actionable stock market opinion and analysis, and vibrant, intelligent finance discussion."
We want to empower local businesses and communities to control their own destiny. Monopolistic telecommunications companies, with their Goliath market share, Wall Street priorities, and armies of lobbyists continue to attack local control and self-reliance. They are extracting assets from Main Street and shipping it to Wall Street.
Yet we see the FCC, Congress, and many states pretending that the public interest is best served by giving more power to these massive companies. And we will continue to hear industry-funded think tanks claiming that broadband has robust competition and should be subject to less public oversight. Coming soon to an op-ed page near you.Photo courtesy of JSquish via Wikipedia Commons