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Comcast/NBC Merger Weakened U.S. Telecom Consumers

This is from "Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age", a book by Susan Crawford, a former adviser to Obama on science, technology and innovation issues. In this excerpt, she homes in on the monopoly extended by the Comcast/NBC merger:

To those who argued that the merger would stick U.S. consumers with high-priced, homogenized entertainment and second-class Internet access, Comcast had only to respond that the situation for consumers would not be any worse than it already was. If opponents could not decisively prove “merger-specific harms,” the phrase Comcast employees repeated endlessly to staff members across Washington, the deal could not be blocked.

By February 2010, the accepted wisdom in Washington was that the deal would go through. And it showed Americans their Internet future. Even though there are several large cable companies nationwide, each dominates its own regions and can raise prices without fear of being undercut.


Talk show host Rick Smith on Meredith Attwell Baker, the NBC/Comcast merger, and FCC corruption.

Wireless access, dominated by AT&T Inc. (T) and Verizon, is, for its part, too slow to compete with the cable industry’s offerings; mobile wireless services are, rather, complementary. Verizon Wireless’s joint marketing agreement with Comcast, announced in December 2011, made that clear: Competitors don’t offer to sell each other’s products.

It doesn’t have to be this way. Other developed countries have a watchdog to ensure that all their citizens are connected at cheap rates to fiber-optic networks. In South Korea, more than half of households are already connected to fiber lines, and those in Japan and Hong Kong are close behind. In the U.S., only about 7 percent of households have access to fiber, and it costs six times as much as in Hong Kong.

Rather than try to ensure that the U.S. will lead the world in the information age, American politicians have removed all regulation of high-speed Internet access and have allowed steep market consolidation. The cable industry has done its best to foil municipal efforts to provide publicly overseen fiber Internet access. Now, the U.S. has neither a competitive marketplace nor government oversight.

In the subcommittee hearing, Roberts never faltered, and his performance was judged a success. In the end, the Antitrust Division allowed the merger, and the FCC followed suit.

Compared with people in other countries, Americans are paying more for less and leaving many of their fellow citizens behind. Perhaps they will start to care when they see that the U.S. is unable to compete with nations whose industrial policy has been more forward-thinking.



FCC Tries To Quietly Hand Rupert Murdoch A Media Monopoly

FCC Chairman Julius Genachowski is trying to change the agency’s ownership rules to pave the way for Murdoch to get control of the newspapers in the same cities where he already owns TV stations. Even more disturbing, Genachowski and Murdoch are trying to keep this under the radar, hoping we don't notice.

Rupert Murdoch, in addition to being the malignant force behind Fox News, is the lawless conservative who’s under investigation in England for phone hacking, influence peddling and bribery. Now he wants to own the Los Angeles Times and the Chicago Tribune -- major papers in the nation's second- and third-largest cities -- and the FCC wants to help him? I don't think that's a good idea. Do you?

Unsatisfied with his media empire in the UK and Australia and his several media holdings in the United States like TheWall Street Journal, the New York Post, and Fox News, Rupert Murdoch wants more. He wants a media monopoly.

Murdoch is currently jockeying to buy the Los Angeles Times and the Chicago Tribune, which just so happen to be the largest newspapers in the nation’s second and third largest cities. That will add to his current media empire in the United States, which includes the most watched cable news network in the nation, Fox so-called News, and the most circulated newspaper in the nation, The Wall Street Journal. The only thing standing in Murdoch’s way of full-spectrum media domination in America are Federal Communication Commission rules that forbid one company from owning both a newspaper and a television station in one community. Murdoch already owns local television stations in both Chicago and Los Angeles.

But according to sources within the FCC, Chairman Julius Genachowski is quietly planning to scrap those rules. Under pressure from major media moguls like Murdoch, who see big bucks and huge political power in a consolidated national and local media, Genachowski circulated a new order to other FCC Commissioners that would allow for cross-ownership of TV and newspapers in the nation’s twenty biggest media markets.

A similar effort was made in 2007 by George W. Bush’s FCC, but it was shot down after the Senate voted to repeal it and a federal court blocked it. Not to mention, 99% of the public comments the FCC received opposed that media consolidation effort.

But, undeterred, Murdoch and other media moguls kept lobbying, and now President Obama’s FCC is expected to consider these rule changes again in December. And if Americans don’t get involved in this issue and pressure the FCC to say “no,” then Murdoch and his billionaire buddies will likely get what they want, which is complete domination of our news media.

In fact, as Ben Bagdikian points out in his book, The New Media Monopoly, the United States is already dangerously close to falling victim to a complete media monopoly. Today, only five corporations – one of which is Rupert Murdoch’s NewsCorp – own the majority of all the media seen, read, or listened to by Americans. If the FCC gets completely out of the way, then further consolidation will follow suit.

You can send a message to the FCC here.



Comcast is evidently so confident they will receive approval of their merger that they've named their new management staff publicly while government officials fume behind the scenes at their arrogance. And why not? I can't think of any recent megamergers that have been denied by our brave and fearless regulators, can you?

“For a deal this large, and one that hasn’t been approved, Comcast’s behavior is presumptuous and arrogant,” one of the officials said.

Those officials did not want to be identified commenting on the negotiations. But the episode encapsulates what seems to be the differing attitude of Comcast on one side, and the Federal Communications Commission and Justice Department on the other: Comcast believes the proposed merger is an all-but-foregone conclusion, while the government is saying “just hold on a minute.

The 180-day merger clock runs out on Wednesday, although an extension can be made without consequence. Sticking points appear to be what bother all of us: When (or if) this deal closes, Comcast will control everything from creation to delivery to pipelines to ticket sales. It will be a complete silo, start to finish, with monopolies in local markets and burgeoning control of Internet content whether or not one is actually a Comcast customer.

One of the real sticking points is Hulu, a joint NBC/Universal and Rupert Murdoch project.

The government is expected to impose conditions to protect against anti-competitive behavior by the combined entity. Conditions are a common feature of mergers, but they are especially significant in this case because the Comcast-NBC merger comes at a time of intense focus on online video. Regulators have repeatedly asked the companies for additional information about online video, in part because NBC owns a stake in Hulu, the streaming TV and film Web site.

According to filings before the F.C.C., officials there are considering imposing conditions on the Internet distribution of video. One condition could be to apply to the Internet “program access” rules that prohibit distributors like Comcast from withholding programming they own from traditional competitors. Such a condition could make it easier for entrepreneurs to distribute channels on the Internet, bypassing cable.

This merger is such a terrible idea. The only ones who benefit are Brian Roberts and Rupert Murdoch. The rest of us are stuck with little in the way of real options.

In the words of Al Franken,

"When the same company owns the programming and runs the pipes that bring us the programming, we have a problem."

Yep. It's a problem. A big one, and it isn't going away anytime soon.



My friend and former colleague at OpenLeft, Chris Bowers (now with DailyKos), does his usual excellent job at putting it in perspective for us:

Nate Silver currently gives Democrats a 21% chance of keeping control of the House. Pollster.com also gives Democrats a 21% chance. Seems like a consensus to me.

With that in mind, here are three seemingly common things that are less likely than Democrats winning the House in 2010:

1. First, it’s less likely that your birthday is in either August or September (18%) than it is for Democrats to keep control of the House. However, we all know lots of people born in either August or September.

2. Second, your odds of rolling doubles in Monopoly, thus winning a second roll or getting you out of jail, are lower (17%) than the odds of Democrats winning the House. But everyone who has ever played Monopoly has rolled doubles many times.

3. Third, it’s less likely for an NFL team with the ball, and trailing by seven points at the start of the 4th quarter, to win the game (about 12%) than it is for Democrats to keep the House. Still, every football fan, player and announcer knows comebacks like that happen all the time. Two Sundays ago, it even happened twice in one day (here and here). A third, even larger comeback happened on that same day.

Yes, Democrats are behind. However, a 21% chance of victory is far from being defeated.

Giving it some thought, there are plenty more good examples:

  • If you live in the United States, the probability of your blood type being AB+, O-, A-, B-, OR AB- is less than 21%- it's only 18.4%. Yet I bet a lot of you have one of those blood types- I do myself.
  • For those of you who play pinochle like me, it turns out that with a single deck and dealing to four players, chances are only 18.6% that you'll be dealt a pinochle (jack of diamonds + queen of spades). But pinochles are fairly common in meld.
  • Being a rabid player of the board game Risk, I continually seek out ideas on strategies and chances. For those of you who play, you'll know that being on defense can sometimes be harrowing when outnumbered. For example, when playing with all 5 dice, if you're Western United States with 6 armies and Eastern United States is attacking you with 9, your statistical odds of successfully holding onto Western United States are only 13%. Yet there are still plenty of times when your armies stand tall to successfully defend.
  • Depending on what you read, only 8-15% of the population is left-handed. Yet not only is our President left-handed, I bet some of you have your left hand on the mouse right now.

The point is that for all the forecasting, retaining the House isn't hitting a triple bank shot -- it may be more common than events that regularly occur every day. This isn't spin -- it's statistics.

And a contribution to your favorite House candidate at Blue America will only increase those chances. It ain't over 'till it's over.