Charter Challenges Comcast/Time Warner Merger

An anonymous reader writes "Regional ISP Charter Communications is fighting back against the potential merger between Time Warner Cable and Comcast. Charter had been bidding for TWC before Comcast got involved, and now they're urging shareholders to reject the deal. 'From the regulatory perspective, it is difficult to imagine a transaction that could concentrate the industry more than the proposed Comcast merger,' they said in an SEC filing. James Stewart with the NY Times explains what Comcast would look like if the merger continues — when you add the TWC deal to the NBCUniversal pickup a few years ago, Comcast is starting to resemble a global tech company. He also explains why the deal isn't setting off antitrust alarm bells: 'Time Warner Cable operates in 29 states, but thanks to the old system of regional and municipal cable monopolies, Comcast and Time Warner Cable don't compete anywhere. Justice Department merger guidelines define geographical markets, which is why regulators weighing airline mergers examine competition on individual routes, not national market share. ... Under conventional antitrust standards, it's pretty much an open-and-shut case.'"

Comments

These companies need to be split up

[Karmashock]

Not merged... and they need to compete with each other.

Currently they don't because the cities and counties don't let them. They set up absurd pole leasing rates and policies that effectively mean only one company can operate in the area. Its a violation of the spirit of the law if not the letter of the law. They need to be split and they need to compete.

Re:These companies need to be split up

[Anonymous Coward]

Don't blame just the cities and counties for that.

The Cable companies went to them and said "Oh woe is us, we can't possibly put up lines and run the risk of somebody else coming in to steal our thunder, please give us an exclusive franchise, and we'll give you a truckload of money" which you can hardly blame the government officials for, it's a perfectly honest bribe.

They've also gone to your state legislatures and REQUIRED such franchise contracts to be exclusive, and even banned competitors with their own rights to the line (like your power company) from competing.

Re:These companies need to be split up

[Karmashock]

again, that's illegal... since 98 I think. So that isn't what happens. However, the cities do say "oh we can't possibly have more then one cable running over there or it will be a major inconvenience/eye sore"

Re:These companies need to be split up

[Karmashock]

1. I never said anything about lobbying being illegal.

2. Prior to deregulation they had literal monopolies. The current effective monopolies are mostly the inertia FROM regulation. To claim that the current state of affairs was created by deregulation when the blocks against competition are all still government regulation... is moronic.

What keeps companies from competing with the cable and DSL providers? Its not economics. Its not logistics. Its not technology.

Its government regulation. Mostly local regulation... city and county.

And you sit there and tell me that DEregulation caused this issue?

You're a fool. Please slap yourself in the face... I can't reach you from here.

Re:These companies need to be split up

[ttucker]

again, that's illegal... since 98 I think. So that isn't what happens. However, the cities do say "oh we can't possibly have more then one cable running over there or it will be a major inconvenience/eye sore"

There are still regions in my town where Comcast has a service monopoly. It is in exchange for some public access channels. Woah.

Re:These companies need to be split up

[Jane Q. Public]

"... we'll give you a truckload of money" which you can hardly blame the government officials for, it's a perfectly honest bribe."

There's nothing "honest" about it, and yes you can blame those officials.

"They've also gone to your state legislatures and REQUIRED such franchise contracts to be exclusive, and even banned competitors with their own rights to the line (like your power company) from competing."

Not here.

Re:These companies need to be split up

[Jane Q. Public]

"You don't get the Sarcasm Channel there either, do you?"

Actually I did get your sarcasm. But it wasn't very obvious where the sarcasm actually began and ended. The last part was obviously serious, and I thought perhaps you meant the first part seriously too, with just the middle being sarcastic.

"If you're going to chop-quote, at least make it so you aren't showing how you missed the point of what I said."

I didn't miss anything. But you sure seem to have.

Re:These companies need to be split up

[Jane Q. Public]

"If you hadn't missed it, why reply to a specifically quoted in a manner that indicates you hadn't realized it was sarcasm?"

Look, since this seems to be going over your head, I'll explain it in detail, okay?

The FIRST PART of what you said was:

"Don't blame just the cities and counties for that."

which seemed pretty serious. Then, the next part:

"Oh woe is us, we can't possibly put up lines and run the risk of somebody else coming in to steal our thunder..."

is OBVIOUSLY being sarcastic. BUT, the part following that:

"... please give us an exclusive franchise, and we'll give you a truckload of money" which you can hardly blame the government officials for, it's a perfectly honest bribe."

Seemed pretty serious again... for the simple reason that is what happened in a lot of the U.S. I know it did in my area. So while you wrote it in a snarky manner, I had every reason to believe you were being serious.

Then the following part:

"They've also gone to your state legislatures and REQUIRED such franchise contracts to be exclusive, and even banned competitors with their own rights to the line (like your power company) from competing."

Appears perfectly serious again. So pardon the fuck out of me, but while I *DID* get the sarcasm in your tone, at least most of what you were writing appeared to be serious. They aren't mutually exclusive, you know. I can say something in a sarcastic manner and still be serious about the subject matter.

Re: These companies need to be split up

[Karmashock]

Practically no ISPs besides the big guys run their own cable.

The only places you see multiple providers are in some small towns mostly in the south for some reason. You find very few competing ISPs in canada as well, with the exception of some small towns that actually went so far as to build their own ISPs.

Look, we need more companies that actually run the cable themselves.

What stops it is regulation. Not economics. Not technology. Not logistics. Not anything but naked legal bullshit.

And until that stops the big ISPs are going to dick with everyone else and set unreasonable prices for crappy service.

Re:These companies need to be split up

[Karmashock]

That's an interesting idea.

So your idea is that they can own the cables but they can't actually do anything with them. The cables themselves can only be used by third party companies?

I still would prefer if more companies ran cable. But your idea would be an improvement.

Re:These companies need to be split up

[Karmashock]

In a situation where the government does corrupt things you want to blame that corruption on the criminals NOT in government?

So if I'm a drug dealer... and I pay a police officer to kill someone... which was the greater crime?

Me paying the police officer... or the police officer taking my money and shooting someone?

And which of the two is less acceptable?

Obviously the police officer taking the money and shooting someone.

And that relates to the government allowing itself to be bought by companies. It is effectively the cop... taking the money and doing their bidding against their oaths of office.

You will always have corrupt people. But if you accept corrupt government then there is no law at all. The whole system just becomes who is more devious and scary then the next guy. And then you protect yourself by ripping throat out of anyone that messes with you.

You don't want that. So put the blame where it belongs. On the government for taking the bribe.

Re:These companies need to be split up

[Karmashock]

So far as I understand that's against the law.

Re:These companies need to be split up

[Karmashock]

No.

I am not giving last mile to the government.

Re:These companies need to be split up

[Karmashock]

Wrong.

That is not why you don't get multiple lines in an area. And in built up areas such as major cities, the market is rich enough to support dozens of ISPs with independent lines.

Think about the math for a second. If ONE ISP can be viable in a rural or suburban environment then how much more infrastructure is required in an urban one? Not much more. Its really just higher density which ultimately lowers costs. As such, an urban environment must be able to sustain many ISPs having multiples of the suburban density.

But its worse then that because there are suburban and even rural areas where there are multiple ISPs with multiple lines... and they stay in business for years and years and years.

No.

The reason you don't get competition is because the cities, counties, and states set regulations that make it impossible in most cases... or simply wildly uneconomical.

If you were correct then Google Fiber wouldn't be viable in areas with cable and DSL. Sure... google fiber is better... but most of the broadband customers are going to be satisfied with cable and DSL. Google fiber comes into an area as the third provider. And is viable.

But google will not deploy fiber in cities or counties that try to dick around with them which is the typical system throughout most of the country.

That is the issue.

Do you have contradictory information? Present it.

Re:These companies need to be split up

[Jane Q. Public]

"No, no you had no reason whatsoever to believe it was anything but sarcasm"

So now you claim to know what I'm thinking?

Go away. I don't have time for this BS.

Re:These companies need to be split up

[Karmashock]

So you think the police officer that shoots someone for money is less responsible for the act and you should take less action against corrupt government officials then those that simply try to bribe them.

Fine.

You're an idiot.

This discussion is over.

Good day, sir.

Re:These companies need to be split up

[mgcarley]

What are the pole leasing rates where you are? In So IL, it costs $9/year per pole, or about what... $0.75 a month per pole? If you assume 25% penetration (or we say that 1 in 4 houses has cable) & roughly 1 pole per 2 houses passed (judging by what I can see out my window), that means about $1.50/cust/mo goes to poles in built-up areas.

Granted, it could possibly be cheaper, but it's not as absurd or exorbitant as it seems to be being made out to be.

Disclaimer: Prices are based on leasing space on Ameren poles, does not include the cost of having their engineers come to examine the poles to make sure my cables won't cause them to fall over and stuff. I'm on the ISP side & I think all the infrastructure - including cabling - should be shared/open for any provider to use. I also think providers in this country charge too much for too little service, there isn't enough competition, and that the Comcast/TWC merger ultimately is probably a bad idea for consumers.

Re:These companies need to be split up

[mgcarley]

Err... I've seen a bunch of franchise agreements in places we've looked at operating and none of them were exclusive.

There are other barriers though (company has to be a registered CLEC or cable TV operator, FCC hoops to jump through including registrations and contributions which are simply downright confusing and so forth... oh, and sometimes working with the cities themselves can be a royal pain in the arse and/or painstakingly slow).

As for banning competition, I think that's a new thing with those municipalities that have done so, and said bans are probably not entirely legal anyway.

Re:These companies need to be split up

[Karmashock]

The numbers aren't correct. The cost of regulation often inflates the cost or running cable by as much as 50 percent above the cost of the cable. And the ongoing costs can be arbitrary and extreme.

The larger operators insulate themselves from this with various agreements not available to the smaller operators. This means they pay a lower rate and are interfered with less. That should be offered to everyone without exception.

Again... when this is done you'll have multiple operators in most large cities at the very least. Until you do you will maintain the current monopoly system.

Look at if you have overlapping coverage in any area. That is your sign.

Re:These companies need to be split up

[mgcarley]

Which numbers are you referring to? The numbers I quoted are what I pay as direct costs... The cost of regulation is another matter entirely, but even then there are also subsidies offered left, right and centre in some areas which can counteract some or sometimes most of these costs.

For providers offering phone service, there's usually between $5 and $10 on top of the advertised monthly rate that's taken directly from the subscriber as "taxes and fees" for stuff like 911 (which I think is absurd - other countries manage to fund their emergency numbers just fine) - we have something like 8 line-items on our invoices IIRC, it's ridiculous.

As far as other costs are concerned, the franchise agreements in some cases give almost free reign over the rights of way so there's not really any additional payment or differing rates as I understand it, it's just one big bulk thing - in my case, I'm in a Mediacom town and I've seen some really shitty cabling on their part (including stuff run across the ground and just left lying there for what has now been... 4 months?), yet, we got bitched at for having a cable secured in a slightly incorrect way which was 1. temporary (72 hours) and 2. was actually secured to the surface and, we believe, less of a hazard than some of what we've seen. Of course, we don't have a franchise //yet// either.

I deal almost exclusively with smaller towns though so my situation may not be representative of what happens in larger cities - I can imagine those being a complete bitch simply due to their size and the extra layers. I do agree, however, that the "playing fields" **should** be level, monopolies should be absolutely verboten and as above, that all infrastructure should be shared with any licensed provider who wishes to use it (the latter would probably prevent some of these mega-mergers too).

Re:These companies need to be split up

[Karmashock]

Obviously both should be held accountable. No where did I say the people offering the bribes should be left alone.

The difference is that offering such bribes is often not illegal where as taking them is always illegal.

Again, we're done. Even if your statement was due to miscommunication you know my position on the matter and I've seen nothing from you to make me think you have something to contribute beyond that point.

So again... Good day.

Re:These companies need to be split up

[Karmashock]

Of course the briber is involved... but people willing to bribe exist everywhere.

The difference between a corrupt country and a clean one is not whether one country has corrupt people or not. There are just as many people willing to bribe government officials in one as in another.

The difference is rather that in a clean system the bribes are refused and the official turns them into the authorities for prosecution.

In short, my interpretation is what defines a society that has low corruption. While yours seems more facilitated by the inherent background radiation of human society.

That's foolish... which is why we're done.

And yes... I'll respond... because you keep presuming to have the last word and contradict me. And because saying "nah uh" to you "uh huh" costs me nothing.

Re:These companies need to be split up

[Karmashock]

What does being done have to do with responding? I'm not dead.

Re:These companies need to be split up

[Karmashock]

No government regulations come from nothing... doesn't mean all laws are reasonable, ethical, or effective. I could cite the most barbaric horrific law in the history of the world and show that it was justified by something or there was some sort of intention behind it. So the fuck what? Good intentions does not automatically mean that whatever you're doing is good or desirable.

Kindly demonstrate a fundamental grasp of logic or people can safety assume you lack one.

Re:These companies need to be split up

[Karmashock]

I'm saying that if evidence comes to light of government officials accepting bribes you need to come down on it like the hammer of God.

Corporations or individuals offering bribes? Yes, send them to jail.

No question... it should not be tolerated from any quarter.

But when the government accepts the bribe... You destroy that person. The toughest sentences used for fraud should be employed. And if we're talking about a major breach then even capital punishment can be on the table.

I'm not kidding. You cross that line and you need to understand you're playing with hand grenades.

It is one of the most profound crimes you can commit against society. To accept a position of privilege and authority, to take oaths of office swearing ethical and honorable conduct, and then to take that trust and abuse it for your own petty profit.

A private individual or corporation took no oath to society. They hold no position of authority or privilege over everyone else. Their corruption while punishable by law is not the same thing.

Would I put them in jail? Of course. But my focus on that issue is not comparable to a government official doing the same thing. If a corp does it... send them through the conventional system and let the chips fall where they may. If a government official does it... he needs to burn.

Re:These companies need to be split up

[Karmashock]

I have no problem with lobbying. I have a problem with quid pro quo politics between specific businesses and specific politicians.

You want a make a deal? Make a deal for everyone with the government in general. Pass a law that applies to everyone.

You make some back room deal where company X gets Y in return for giving campaign funds R to politician Z... that you kill with fire.

Re:These companies need to be split up

[Karmashock]

Being allowed to petition the government is a key quality of democracy.

Its a matter of free speech. Lobbying is a fundamental right.

Cutting secret deals with corporations and wealthy individuals is not.

Your inability to distinguish between the two speaks poorly for you.

Re:These companies need to be split up

[Karmashock]

You contradict yourself.

You hold lobbying as responsible in some of your posts and then hold it as sacrosanct.

The contradiction is holding it responsible. It is not.

It is the corruption that is responsible.

Re:These companies need to be split up

[Karmashock]

All true, which is why the finances of politicians must be scrutinized.

Note amongst the other things they've carved out for themselves is immunity from insider trading laws.

You control the issue not by preventing people from petitioning for change but rather by monitoring the politicians such that when they go bad you catch them and they're removed from office.

If you come down on lobbying you'll only strengthen the corruption in the system because you will have removed legitimate means to redress grievances. While black market, backroom, off the books deals are not effected by the law's opinion of them but only by the enforcement policies that frustrate them.

That is how you control the corruption. Monitor the politicians, monitor their finances, monitor their communications... and do not allow them to carve out loopholes for themselves that make it so that laws that apply to everyone don't apply to them.

Re:These companies need to be split up

[Karmashock]

We are the lobbyists. I am a lobbyist and you are a lobbyist and we all are lobbyists.

We're done... talking to you is like trying to hold a conversation with a tomato.

Comcast cable tv is far behind other cable systems

[Joe_Dragon]

Comcast cable tv is far behind other cable systems

so will they make it better or cut stuff from the time Warner systems to make them more in line with Comcast systems?

Cable customers shafted by state government.

[packrat0x]

"Time Warner Cable operates in 29 states, but thanks to the old system of regional and municipal cable monopolies, Comcast and Time Warner Cable don't compete anywhere."

This is your state government(s) shafting you. The states created laws which allow cable monopolies. Local governments collect a franchise fee on the gross revenue of the cable companies operating within their boundaries. In the eyes of local government, less competition means higher prices which means more tax revenue (without voter feedback). Local government passively discourages competition through regulations, filings, public meetings, disclosures, insurance requirements, etc. Some local (and state) governments *actively* discourage competition.

Re:Cable customers shafted by state government.

[fustakrakich]

Obviously the voters. They won't vote the corruption politicians out of office.

"they don't compete" is the reason for rejecting

[Jon_S]

When are people and regulators going to wake up and realize that the "well, they don't compete against each other an any areas" is *not* a reason to say this merger is OK, but is a reason why it should be rejected!

The problem with broadband access in the US is that we don't have competition in most places. Some places have DSL (slow) or Fios/U-verse, but most don't. And no, satellite or 2 GB-capped cell service doesn't count as competition.

The very statement that they don't compete anywhere is the problem. Things need to be changed so that they compete against each other. That will not happen if they merge.

Hmm

[Anonymous Coward]

What's this capitalism I hear so much about? It's meant to stop stuff like this, maybe the USA should give it a go

Re:Hmm

[geminidomino]

. I suppose it's closer to socialism/fascism.

The fact that you connect "socialism" and "fascism" in that fashion suggests that you either don't know what either word means, or you don't know what "/" means.

Re:Hmm

[Attila Dimedici]

Actually, it sounds like YOU do not know what either word means. Socialism and fascism are variants on the same principle. If you study history you will discover that all fascists started out as socialists. In socialism, the government takes ownership "socially critical" industries and runs them according to what the government thinks is best. In fascism, the government leaves those industries owned by private individuals, as long as those individuals run them according to what the government tells them is best. There is no difference for the average citizen.

Re:Hmm

[mrchaotica]

Your response suggests you don't realize that socialism and fascism are but two sides of the same authoritarian coin.

Re:Hmm

[geminidomino]

Socialism and authoritarianism are different concepts. You can have a non-authoritarian socialistic society (in theory), and a capitalistic fascism (the US after another century of current trends continuing, e.g.)

In practice, every human-run government is going to shift over time toward authoritarianism, regardless of its economic philosophies.

Love Charter.

[AugstWest]

Somehow I've almost always managed to live in one of the small pockets of my state that Charter services, and they're always been awesome. Other than the occasional weeklong power outage or some such natural nonsense, they've been rock solid. I always see all the people constantly bitching about Comcast and thank the heavens that whatever little rural enclave I've ended up in hasn't had them as the cable provider.

Programming is hard because computers are slow

[Frans Faase]

One of the main reasons why programming is hard, is because computers are slow. This may sound very counter intuitive, but the fact that computers look like they are fast because they make use of many smart tricks, most of which we are no longer aware off. It is important to realize that computers all rely on the memory piramid, where in the top of the memory there is a little very fast memory and at the bottom there is a vast amouth of slow memory (often distributed in a system called The Internet). The range in speed and size is more than 9 powers of 10. A lot of effort is spend in copy data between the kinds of memory inside this memory piramid. And to be able to implement systems that appear fast, we have to deal with all the small tricks that are used in the system to make it look fast. Knuth has said that very often premature optimization is the root of all problems. The real fact is that almost every act of programming (in an imperative language) is an act of optimization, namely finding an implementation of a function with given constraints. Take for example the simple fact that whenever we deal with an integer in a program, it is an integer within a limited range. But an integer could be arbitrary large. So as soon as you declare an integer in your program, you are performing an act of optimization, because you decide that in your case the range of values within your function are limited to a certain power of 2. (Except if your language has an implementation for BigInt, but even these always have a limit.)

Re:Programming is hard because computers are slow

[jeffb (2.718)]

Then there's the whole "posting in the correct discussion thread" optimization...

Re:Programming is hard because computers are slow

[Aqualung812]

Slow clap.

Wish I had mod points.

Local loop unbundling

[Anonymous Coward]

I'm totally okay with these guys all merging.

I'm totally okay with comcast charging excessively for connectivity between themselves and other ISPs. It's their wires, they can do what they want with them.

I'm not okay with the last-mile monopoly these companies have in the majority of the cities they operate in.

The solution to that is "local loop unbundling" -- which we already have for DSL and for local phone service. http://en.wikipedia.org/wiki/Local-loop_unbundling

If you don't like your DSL provider, you can switch, and it is mostly painless. You still pay rent to the last-mile provider but otherwise you don't have anything to do with them.

The same could be done with cable -- you get a wire from comcast / charter / warner / whatever, and if you don't like the performance you get a PPOE session to some other ISP and they peer with netflix or whoever better.

The last-mile providers get monopolies -- they should be given rents on their wires and otherwise be forced to provide access between any other ISP and the residents who have the wires terminated in their house.

Re:Local loop unbundling

[alen]

we have this in NYC in some areas with time warner having to unbundle its wires to others. the others are more expensive than time warner

"They don't compete"?

[jeffb (2.718)]

I wasn't aware that the entities that sell programming to them were also divided into non-overlapping geographic areas.

Captive Audience

[Anonymous Coward]

If you really want to get an idea as to how this is all playing out, you should read Susan Crawford's book, "Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age". It's not a happy story, and you'll probably be tempted to start throwing chairs at some point or another, but it is very important from an educational perspective. For the reasons given in the summary, I see no chance that the TWC acquisition will be blocked, and it's entirely possible that Comcast will control essentially all wired broadband access in the US within 15 years. What a utopian future that will be -- for Comcast.

This nation badly needs another Theodore Roosevelt, but the chances of a politician not entirely tainted by corporate influence being elected at the national level at this point is essentially zero.

Already Monopolies

[hemo_jr]

CableCos are already monopolies.Stand in line for a half hour at any service center, if you need to be convinced. Any company that has to compete actually has to take care of their customers in a timely manner.

Um, they've already woke up

[rsilvergun]

just about every big regulator goes to work for the industry when he's done. It's so common we have a name for it: Regulatory Capture.

Here in America we've been voting pro corporate right wingers into office since Reagan. They stacked the supreme court and have been chipping away at the gains made after WWII non-stop since those gains were made. It's not a battle I see us winning :(.

Re: You are an idiot.

[Atl Rob]

Tell that to google, they are trying to lay fiber wherever thay can. The problem isn't economics, it's willpower, why would you want to dissolve your monopoly position into a competitive one? The monopoly companies are behind the crazy regulations and terriffs, it creates a substantial impedance to competition, plain and simple. Not to mention government wanting to keep communication channels in their control for obvious reasons. One hand washes the other and the consumer gets screwed as a result.

antitrust

[Khashishi]

The problem here isn't a trust between Comcast and Time Warner. Rather, the problem is a trust between Comcast/Time Warner and the local government.