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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.



San Francisco Internet Cuts: Was Someone Testing the System?

I noticed this last week, because my internet access was unusually slow. I wondered then what was going on and finally read about the Bay Area cuts. This additional perspective isn't all that reassuring:

There may be more security issues than ever with a so-called smart grid controlling power distribution in the country.

The real likelihood that hackers can break into such a grid is actually not a possibility, but an inevitability. What is always overlooked when these fancy initiatives are unveiled is the nature of the Internet.

What we need is a distribution system that relies on computer technology for management, but which is completely off the Net itself. Nobody wants to do that.

It is crazy to put all of our eggs in one Internet basket, as the telecommunications scene worldwide is subject to too much hacking. Even a non-Internet network cannot be secured.

This problem goes further than hackers online -- it goes to our overdependence on interconnectivity through common connections.

This week in the San Francisco Bay Area, the fiber-optic cable network was purposely sliced at four distinct locations. Where a hacker cannot succeed, bolt cutters will do.

[...] Once the cables were cut, Internet service was flaky for the region and completely out for 50,000 customers. On top of that, the landlines would not work and the cell-phone towers in the area went dead.

Does anyone find this sort of interdependency a little disconcerting? It is as if someone was testing the grid for either redundancy or failure points.

Much of the problem stems from the issues with technologies such as fiber optics. They require a level of public trust to work, because the cables must be clearly marked to prevent public works and contractors from accidentally cutting them.

In most parts of the country, there are signs up and down highways, across bodies of water and even in cities marking the location of a fiber-optic line. There are even maps of these things and where they are located.

How much work would it take to find some choke points that you could cut for the purposes of disrupting data communications in an area? How would this affect the so-called smart grid?

The peculiar nature of the four cuts around the Bay Area indicated to me that someone was mapping how they would affect the region, keeping in mind that by cutting the cable in key areas you might be able to take down half the country. If more cuts are made in the future, then someone is trying to reverse-engineer the network to find the most vulnerable points of disruption.