[Davisgig] FW: Comcast gets a merger approval, but objects to new low-income requirements

Richard Lowenberg rl at 1st-mile.org
Sun Feb 15 14:00:08 PST 2015


Begin forwarded message:

> Comcast gets a merger approval, but objects to new low-income requirements California seeks more cheap Internet for the poor. Comcast says it's too hard.
> By Jon Brodkin
> Feb 14 2015
> <http://arstechnica.com/business/2015/02/comcast-gets-a-merger-approval-but-objects-to-new-low-income-requirements/>
> 
> California has tentatively approved Comcast's $45.2 billion acquisition of Time Warner Cable, but Comcast isn't entirely happy because some of the conditions demanded by the state "create a more intrusive regulatory regime."
> 
> The proposed approval with conditions came yesterday from Public Utilities Commission Administrative Law Judge Karl Bemesderfer. Comcast Executive VP David Cohen quickly wrote a response criticizing Bemesderfer's 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 wrote. "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."
> 
> The only specific conditions Cohen pointed to cover how quickly Comcast must bring broadband to underserved populations. Comcast offers $10-per-month Internet to poor people through its Internet Essentials program, which was required by its 2011 acquisition of NBCUniversal. California wants Comcast to expand eligibility for this program, offer it throughout the Time Warner Cable territory, double download speeds to 10Mbps, provide free Wi-Fi routers, connect schools and libraries in underserved areas, and sign up at least 45 percent of eligible households within two years. Comcast must submit specific plans for signing up more low-income subscribers, reduce wait times, and make the sign-up process less difficult. Customer advocates complained in July 2014 that only about 11 percent of eligible households in California were getting the discount Internet service because of how difficult it is to sign up.
> 
> Comcast says the penetration goal is unrealistic.
> 
> "[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."
> 
> 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.)
> 
> [snip]
> 

---------------------------------------------------------
Richard Lowenberg, Executive Director
1st-Mile Institute          www.1st-mile.org  
P. O.  Box 8001, Santa Fe, NM    87504
505-603-5200                 rl at 1st-mile.org
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