merger

Content tagged with "merger"

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In Fear of Comcast Warner Cable

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It is hard to say just how bad of an idea it is for us to allow Comcast to buy Time Warner Cable. This is not just about consumers having to pay more, which they do every time we allow massive consolidation, but about access to information. I can't help but think back to our conversation with Barry Lynn on monopoly a few weeks ago. People get so focused on consumer prices and a narrow view of competition that they miss important impacts of consolidation. One impact is moving Comcast from the seventh biggest DC lobbyist to the fourth. This consolidation is a recognition that the private sector simply will not provide meaningful competition for Internet access. Communities need to recognize what a do-nothing approach means: relying on a distant cable monopoly for the most important services of the 21st century. If I had to guess what will happen - Comcast will buy Time Warner Cable but have to sell off some pieces to get approval. Comcast will grow larger and more powerful, making future mergers even more difficult to stop despite more and more evidence that these firms are strangling our economy. We can stop it - but will we? Specifically, will we force our representatives in DC to stop it? Stay tuned to the organizations that are covering it well - Free Press, Karl Bode, Public Knowledge, Common Cause, and many others.
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AT&T's Many Broken Merger Promises

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AT&T and others regularly woo their regulators and policymakers with promises to built increase investments or expand networks in return for deregulation or merger approval. A recent Gerry Smith Huffington Post article examines a familiar pattern of broken promises made by telcos, what has developed into a chronic wham-bam-thank-you-ma'am attitude by these massive corporations.

We actually have a name for this, Kushnick's Law: "A regulated company will always renege on promises to provide public benefits tomorrow in exchange for regulatory and financial benefits today." 

Smith revisits promises made back in 2006 when AT&T merged with BellSouth. AT&T promised to roll out broadband to every customer in its territory by 2007. Tell that to Cedric Wiggins from rural Mississippi. From the article:

But five years after that deadline, Wiggins, 26, is still waiting. Inside his trailer, his only affordable Internet option is a sluggish dial-up modem that takes five minutes to load the online job listing sites he has visited since being laid-off as a truck driver in May. Every few months, he calls AT&T to ask when he will receive a faster connection. The answer never changes.

“They said they don’t offer it in my area right now,” he said. “There’s nothing I can do.”

Smith found that promises made to gain merger approval are traditionally broken and/or so weakly constructed that the players can comply with little or no effort. Empty promises continue to be accepted by the feds and conveniently forgotten, except people like Wiggins.

No one knows the pattern better than those on the inside:

“We have a problem at the commission, historically, with following-up on merger conditions,” said Michael Copps, who served on the FCC from 2001 to 2011, and who voted to approve the AT&T-BellSouth merger. “A lot of these conditions that get attached are not that great, and they are not always really enforced.”

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Comcast Gamed FCC for Internet Essentials "Concession" in NBC Merger

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Last year, when Comcast unveiled its Internet Essentials program, the corporate powerhouse received accolades from FCC Chairman Julius Genachowski. The program was promoted as an example of corporate philanthropy helping to bridge the digital divide.

Comcast received all kinds of positive media coverage for its program. Most of that coverage failed to note that the FCC required Comcast to integrate the program as one of the supposed concessions offered in return for Comcast being able to take over NBC -- giving the largest cable monopolist in the US even more market power.

DSLReports has publicly exposed what many of us suspected all along -- the program was not a concession on Comcast's part. Internet Essentials was originally conceived as a program that would offer slower connections to certain low income households at affordable rates that nevertheless remain profitable for Comcast.

A recent Washington Post Technology profile on Comcast's Chief Lobbyist David Cohen, notes how the program was actually conceived in 2009, but:

At the time, Comcast was planning a controversial $30 billion bid to take over NBC Universal, and Cohen needed a bargaining chip for government negotiations.

“I held back because I knew it may be the type of voluntary commitment that would be attractive to the chairman” of the Federal Communications Commission, Cohen said in a recent interview.

Eligibility depends on four factors:

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Community Broadband Bits 20 - Amalia Deloney

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Amalia Deloney (follow on Twitter) joins us for our 20th Community Broadband Bits podcast to discuss how her work with the Media Action Grassroots Network and the Center for Media Justice overlaps with our focus on community broadband networks. We talk about the digital divide, particularly in relation to the attempted merger between AT&T and T-Mobile that would have raised prices among vulnerable populations. We also discuss the present campaign for Prison Phone Justice to ensure families are able to talk to incarcerated loved ones at affordable rates. While many of our readers are mostly concerned with how we access the Internet, telecommunications impacts millions of Americans in a different way -- they cannot, or can barely afford to talk to each other because the cable/DSL/wireless networks are ignoring, or worse - exploiting - their needs. We want to build networks that will connect everyone. Read the transcript from this call here. We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address. This show is 20 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment! Listen to previous episodes here. You can download the Mp3 file directly from here. Find more episodes in our podcast index. Thanks to Fit and the Conniptions for the music, licensed using Creative Commons.
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AT&T Abandons Wireless Consolidation Attempt

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It is hard to avoid becoming cynical when watching the federal government interact with big corporations like AT&T. So when AT&T announced it would merge with T-Mobile, giving AT&T and Verizon a combined 3 out of 4 cellular subscribers, I thought two things: 1) What a terrible idea. Higher prices, fewer jobs, less choices, etc. 2) The Federal Government will likely not prevent it - instead opting for some minor concessions that no one will bother to enforce. Sometimes, it is very good to be wrong. Cecilia Kang of the Washington Post, decodes the language from Wall Street to explain the biggest winner from the federal government blocking the merger: consumers.
“Without the combination, we think the wireless industry will be further weakened by continued hypercompetitive activity, particularly regarding subscriber acquisition costs,” said Nomura Securities analyst Mike McCormack. That means customers can still get lower rates as the industry competes for their dollars. T-Mobile, for example, will continue to be a low-cost competitor, according to consumer advocacy group Consumers Union. A survey showed that data plans from T-Mobile were $15 to $50 less per month than those offered by AT&T.
An excellent reminder that what is best for Wall Street is not what is best for the 99%. Big companies like AT&T find competing for customers a hassle that lowers their profits -- they consider a market with four sellers to be hypercompetitive. In wireline, they have acquiesced to the "competition" of two competitors -- cable and DSL. This is one reason communities build their own networks -- the private sector is not truly competitive when it comes to ISPs and most communities have no prospect real of improvement absent a public investment. But we should rejoice in this victory -- because we earned it. Without the hard work of many grassroots groups, it is hard to imagine the Department of Justice or FCC standing up to such a powerful corporation.
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Comedian Louis CK Takes Internet Seriously

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Louis CK, the comedian responsible for the FX show "Louie" and for making people laugh at his brutally candid assessment of how much his young daughter's opinion about anything matters, has bypassed the major studios, channels, and cable distribution systems to sell one of his concerts directly to his fans. For $5, they can easily download it and can then put it on any medium they choose. Some have put it up on pirate sites so others can use it without paying. But more than enough have paid to make it well worth his while -- as explored by the NY Times media critic, David Carr:
While I was talking with him on the phone Thursday night, he checked his Web site and about 175,000 people had bought his special through PayPal. He expected 200,000 total downloads by the weekend, which meant he would have grossed $1 million. After covering costs of about $250,000 for the live production and the Web site, that’s a $750,000 profit. And he owns the rights, and the long tail of buyers, in perpetuity. The transparency of the enterprise, including its cost in relation to how many people bought in, was the subject of media coverage all last week. ... “O.K., so NBC is this huge company and they have all these studios and these satellites to beam stuff out,” he said, “but on the Web, both NBC.com and LouisCK.com have the same amount of bandwidth. We are equals and there are things you can do with that. This has been a fun little experiment.”
His "fun little experiment" demonstrates the threat posed by the Internet to the old business models of cable companies and content owners like Viacom and Disney. And this is why Comcast's purchase of NBC is worrisome. Comcast is still fighting for the authority to prioritize some sites over others - it wants to violate the historic principle of network neutrality that prevents a service provider from interfering with what sites a subscriber visits.
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AT&T&T Merger and DOJ: What is Happening?

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In the aftermath of AT&T accidentally admitting they have nothing but a smokescreen to justify buying one of their few competitors, it seemed that nothing had changed and AT&T was going to continue pushing this anti-competition, anti-consumer deal through. But then the Department of Justice filed suit to prevent it. What does that mean and what is next? Public Knowledge tells us below. In the meantime, Sprint has also filed suit under the Clayton Act to separately oppose the takeover. Why do we care here at Community Broadband Networks? Because the biggest companies - AT&T, Comcast, Verizon, CenturyLink, etc. - have tremendous market power that allows them a disturbing amount of power over the future of access to the Internet and as they become even larger, the prospects of any community building a network in their territory becomes more bleak.
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More Consolidation, Fewer Jobs, No Duh

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We watch in frustration as the federal government, dressed as Charlie Brown asks AT&T, wearing Lucy's blue dress and smiling brightly, if she really will hold the football properly this time. "Oh yes, Charlie, this time I really will create all those jobs if you let us buy T-Mobile," says AT&T Lucy. Over at HuffPo, Art Brodsky recently revisited AT&T's promises in California to create jobs, lower broadband prices, and heal the infirm if the state would just deregulate the cable video market -- which it did, 4 years ago. California upheld its end of the bargain -- wanna guess if AT&T did? Hint: Charlie Brown ended up on his back then too. The answer comes from James Weitkamp (via Art's HuffPo post), from the Communications Workers of America, a union that all too often acts in the interests of big companies like AT&T and CenturyLink rather than workers:
"AT&T and Verizon have slashed the frontline workforce, and there simply are not enough technicians available to restore service in a timely manner, nor enough customer service representatives to take customers' calls. Let me share some statistics. Since 2004, AT&T reduced its California landline frontline workforce by 40%, from about 29,900 workers to fewer than 18,000 today. The company will tell you that they need fewer wireline employees because customers have cut the cord going wireless or switched to another provider, but over this same period, AT&T access line loss has been just under nine percent nationally. I would be shocked if line loss in California corresponds to the 40 percent reduction in frontline employees. 
"Similarly, since 2006 Verizon California cut its frontline landline workforce by one-third, from more than 7,000 in 2005 to about 4,700 today. I venture that Verizon has not lost one third of its land lines in the state."
Note that AT&T, Verizon, and other massive incumbents like Comcast have been wildly profitable over this term. The same trend holds in cellular wireless - as noted by the Wall Street Journal:
The U.S. wireless industry is booming as more consumers and businesses snap up smartphones, tablet computers and billions of wireless applications.
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Susan Crawford: Why Comcast/NBCU Matters

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The Comcast/NBCU merger poses a real threat to the future of innovation, competition, and the open Internet. Put simply: size matters. The larger Comcast gets, the more market power it has and the more all other markets that depend on broadband and media will be distorted. Susan Crawford knows this better than most and explains why everyone should be concerned about it. As we've harped on time and time again:
The crucial thing to understand is that high-speed Internet access to the home really is a crushingly-expensive natural monopoly service to install. The telephone companies haven’t found a way to make this work, because it’s so much more expensive to dig up the streets to install fiber than it is to upgrade cable electronics to DOCSIS 3.0. So they have backed off. The cable industry has made its investment, and is ready to reap its rewards of scale and high fixed costs - secure in the knowledge that no competition is coming after it, and having divided up the country neatly among its members. Meanwhile, the telcos are steadly losing fistfuls of money. As Morgan once said of railroads, “The American public seems to be unwilling to admit . . . that it has a choice between regulated legal agreements and unregulated extralegal agreements. We should have cast away more than 50 years ago the impossible doctrine of protection of the public by railway competition.” In the cable world, we are deep into unregulated extralegal agreements, and competition is not going to rescue us.
The longer communities wait to build this important infrastructure, the harder it will be. It is hard to imagine national candidate speaking more stridently about the important of the open Internet than did Obama and even he bowed to the pressure of the private Internet access providers. While we should pressure the federal government to regulate in the public interest, we must take responsibility for our future at the local level with smart investments.
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