A little background is in order: Comcast, the nation’s largest cable television company, wants to acquire Time Warner, the nation’s second largest cable television company, and create one immense service provider that dwarfs the competition. However, because the merger will create such a huge, powerful entity, it must be approved by the federal government and by each of the states in which it does business.
It may take a state as large as California to stand up to the cable behemoth.
The Golden State’s Public Utility Commission says it will approve the acquisition, but has proposed some conditions that leave Comcast officials frowning. The company charged that California’s demands “create a more intrusive regulatory regime.”
Comcast Executive VP David Cohen, the public face of the company’s Internet Essentials program, was quick to speak out against the proposed conditions:
“We are reviewing the proposed decision and conditions closely and look forward to engaging with the full California Public Utilities Commission (CPUC) as it completes its review of the transaction,” Cohen said in a statement. “While we have just received the recommended decision, it appears that a number of the conditions are ones that will benefit consumers and the company can work with. Some of the suggested conditions, however, could potentially prevent the full benefits of this transaction being realized by Californians, and create a more intrusive regulatory regime where innovative services could be hampered rather than helped. In addition, at least some of the suggested conditions simply lie outside the authority of the CPUC or are unrealistic.”
What does that mean? As with most statements from government regulators and corporate spokespeople, the real meaning is shrouded in a haze of words, but Cohen did reveal some specific requirements to which the corporation objects:
- Comcast must increase the pace at which it brings broadband to underserved populations
- Comcast must make more people eligible for its Internet Essentials program, which delivers internet to the poor for just $10 per month
- Comcast must also offer Internet Essentials throughout Time Warner’s territory
- Comcast must double download speeds to 10Mbps
- Comcast must provide free Wi-Fi routers to all Internet Essentials customers
- Comcast must connect schools and libraries in underserved areas
- Comcast must sign up at least 45% of eligible households within two years
- Comcast must submit specific plans and reveal how it intends to sign up more low-income subscribers, reduce wait times, and make the application process simpler
Are California’s requirements impossible to fulfill?
Cohen’s statement argues Comcast’s case against some California PUC’s proposed requirements:
“[S]ome of the penetration rates and time frames suggested by the conditions are simply unattainable under market conditions, especially with populations that have been slowest to adopt broadband,” Cohen wrote. “Deeper broadband penetration among all populations is a goal we share, and one we’ve worked very hard on for the nearly two decades we’ve been marketing broadband. Nationally, across our footprint though we only have a penetration rate of 40 percent of homes we pass taking our broadband service. In California, it’s about the same. And that’s after we’ve spent billions marketing and advertising those services.”
Our reading of the PUC’s demands seems to show that Comcast and Cohen has a little wiggle room.
As ArsTechnica.com explained, “The California proposal does give Comcast leeway on the 45 percent number. If Comcast can show that its penetration rate is less than 45 percent among potential customers with incomes too high for Internet Essentials, then it can target that lower number rather than 45 percent. (Note that the 40 percent figure offered by Cohen included all homes regardless of income, and thus isn’t relevant to the proposed condition.)”
Putting Comcast on notice
We could go on and on analyzing the various demands made by the California PUC, but there is one that is of particular interest to our readers — Comcast must agree not to work against municipalities that want to build their own broadband networks.
We have often editorialized against the abuse of power of the cable television industry’s powerful team of lobbyists who go into action to block the construction and operation of municipalities that want to serve their citizens by building their own high speed fiber networks.
One of the most interesting demands foisted on Comcast by the Public Utilities Commission says:
“Comcast shall for a period of five years following the effective date of the parent company merger neither oppose, directly or indirectly, nor fund opposition to, any municipal broadband development plan in California.”
We are huge supporters of Comcast’s Internet Essentials program. It already brings high speed internet service to millions of Americans and the Comcast-Time Warner merger will surely assure that it brings the same (or even better) service to millions of additional needy Americans. We are almost able to support the merger for that reason alone.
However, we agree with the California PUC’s demand that Comcast abstain from working against municipalities that want to bring reliable, high-speed, low-priced internet services to their citizens.
On the other hand, the cable television industry is certain to face substantial technological headwinds in the next few years. Although Comcast and Time Warner are sure to generate substantial profits for the next few years and can probably “afford” to deliver everything requested by the PUC, there is no guarantee that they will be able to afford them in the long term.
That is why we urge the California PUC to tread carefully. Consider the merger carefully and get as much as you can for California’s economically-challenged citizens. But don’t make demands that will kill the goose that lays the golden egg.
Betty L Bradley says
Dawn is correct!
What about us disabled elderly residing in Long Beach, Ca. and across the United States; When is any of these low income internet providers going to realize they too will one day be old and essentially homebound paying high rents that consume 80-90% of our monthly incomes.
WE NEED A LOW INCOME INTERNET PROVIDER NOW-NOT LATER!
Dan Janson says
I am 44 unemployed with my unemployment exhausted and taking any cheap labor jobs I can get despite my education and years of experience,
I am very fortunate in that a friend has been kind enough to make room for me in one of the properties he rents out. I have no children so that means I don’t currently qualify for their current program which boggles my mind a bit – i feel I was responsible in that I told my fiancee that we were not making enough to raise a child and it wouldn’t be fair nor do I want to subsist on govt programs or feel like everybody else has to chip in to help me raise my kid (as soon as i lost my job I lost my fiancee too – go figure),
The options left to me are library internet access which is a luck/timing issue as the all of them are usually being used by other job seekers or transients.
Come on Comcast you have knocked all the other low cost options off the table, hell with all the $$ you fat cats are rolling in you should be well able to provide FREE internet access for everybody (kids or not) making less the 30k a year greedy basts.
Dawn says
ok so you have a program for low income with kids WHAT ABOUT US SENIORS WHO WORKED ALL OUR LIVES HAVE NO KIDS AN ON A FIXED INCOME?????? we cant afford your $70 a month for net
phillip hull says
would like to know if I can get internet service in California and Washington State with the same internet provider. Also I would like to know if I qualify as low income.
JD says
All the utility companies I’m aware of are are greedy and monopolistic in nature. Internet service, unless it’s dial up, is not economic for retirees and low paid employees. Comcast is the highest telephone, cable and internet services we have in my city and other than AT&T, Comcast seems to have shut all other internet provders out, including Verizon.
Also, where I live (Jacksonville, Florida) the water and electric provider monopoly we have in this city even have the nerve and balls to raise our rates every Christmas in order to use the rate increase to give bonuses to their employees, usually beginning at about $5,000.00 for lower end employees and on upwards to higher level employees. PLUS they call themselves a “non-profit” organization. Absurd!
This company, by the way is called the Jacksonville Electric Authority (JEA) and nobody seems to be able to do anything about these crooks. They bought or pushed the only other water company we once had, out of business. This water company’s rates were much lower for 3 months of service than JEA has ever been for just ONE month of service.
Sharon Fritz says
I need help. I cant live with these bundles. They are costing me 150,00 per month. I will have to stop watching TV.
lucio rodriguez says
I am 66 years old I been retired, I am married my wife don’t work and my income is 14,796.00 annually we received housing help and our rent is 242.00 dollars per month
plus electicity 65.00 per month average,int.and phone 45.85 ,gas,laundry30.00 weekly
and grosseries 750.00. Grosseries are the is the only-one that we spent less some times
every three months the insurance of our pick-up .We don’t have any other bills to pay
randy downey says
i pay 40 dollars a mouth for internet time warner how can i pay less
lynn says
My only income i d disability. Im in Wisconsin..can i g d t help?
Adriana Rusu says
I AM ON SSI ,I have low income $400. monthly, and I want to know if I’m qualify for high speed internet.