Worcester Mass. City Council Votes To Keep Comcast From Entering the Area

First time accepted submitter _AustinPowell writes Comcast wants a cable television license in Worcester, Massachusetts. In response, the City Council voted 8-3 to urge Worcester's city manager to let the company's license request die. The deadline for the decision is Wednesday, but the manager is not bound by the vote of the Council. "It's a terrible company," City Councilor Gary Rosen said. "In my opinion, they should not be welcome in this city. Comcast is a wolf in wolf's clothing; it's that bad."

Comments

Awesome quote

[Anonymous Coward]

Comcast is a wolf in wolf's clothing; it's that bad. - Gary Rosen, City Councilor

Re:Awesome quote

[Jane Q. Public]

No, No No No!!!! It doesn't matter if they are a wolf in wolf's clothing! They have a service to sell, and users should be free to to use it if they so choose.
...
These councils need to get out of the business of "selecting" the internet provider and let the free market run its course. The outcome will always be what the customers choose, which is usually a variety of competitors, and thats a good thing!

Sorry, but just no.

The problem is that the regulators are mis-regulating, and as a result usually consumers have NO choice... they get the one company in their area, and that's it.

It is not reasonable to expect "market forces" to promote competition, when there is no actual market. Comcast and Time Warner Cable have divided up most of the U.S. between themselves, and voluntarily choose not to compete in their respective areas. That's illegal anti-competitive practice, but as I say: the regulators haven't been regulating. Hell, Comcast even practically BRAGGED about it to the FCC, claiming that a merger would not hurt competition because they're not competing anyway.

If you want consumer market choices to choose the winner, the way they normally would, then you must have a genuine competitive market first. End of story. When it doesn't exist -- like today -- Adam Smith's "invisible hand" doesn't work.

In my area, a City committee votes annually on whether to "allow competition" in the cable market. Every year they have voted it down. I am willing to bet there are kickbacks involved, but I don't have proof.

Re:Awesome quote

[Obfuscant]

You think that illegally divvying up territory in an anti-competitive and monopolistic fashion is "simple business economics"?

It is not illegal for one company to decide it will not compete with another in a certain region when the decision is a simple one based on simple economics. The name "Walmart" has come up in other places in this discussion. Walmart chooses locations to build stores based on expected return on investment. It is not illegal for them to decide not to build in an area that already has a large number of other low-price stores, it is a simple business decision based on economics.

Second, each company's decision not to compete with the other has no binding on any other company that wishes try to compete. Therefore, it is not anti-competitive. You cannot force a company to compete in a market it does not want to, so you cannot prohibit one from making the decision not to. So, you cannot force Walmart to build in your town to compete with existing markets, and it is not illegal for the other markets to exist.

What WOULD be illegal and anti-competitive would be if Comcast (or TW) decided to drop rates to below cost to drive competitors out of a market they wanted to compete in.

Holy sheet. How much do they pay you, you bootlicking shill?

I'm sorry that your hatred for Comcast blinds you to simple business economics and drives you to insult those who try to educate you.

Re:Awesome quote

[Anonymous Coward]

Even Walmart occasionally competes with other companies. This isn't simple business economics. And you're still a bootlicking shill.

From NYT:

Time Warner Cable operates in 29 states, but thanks to the old system of regional and municipal cable monopolies, Comcast and Time Warner Cable donâ(TM)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. In New York, Comcast will simply supplant Time Warner Cable in the array of consumer television and broadband options, which include Verizonâ(TM)s FiOS service, RCN, DirecTV and the Dish Network.

âoeGiven that these are local markets, and that Comcast and Time Warner Cable donâ(TM)t overlap, the merger really has no impact on competition,â said Scott Hemphill, an antitrust professor and specialist in intellectual property at Columbia Law School.

Under conventional antitrust standards, itâ(TM)s pretty much an open-and-shut case. But some opponents have seized on the rarely invoked doctrine of potential competition â" the theory that, if Comcast were barred from acquiring Time Warner Cable, it would enter the New York market on its own.

Now, I'm no antitrust lawyer, but the guy they got to comment for the story is. The whole business is fishy as hell. 29 states and in not one single location do they compete. The only reason they get away with it is because they claim that if they were banned from acquiring each other, they would compete. "Sure, we would compete!" They've admitted they're doing it on a technicality--not on simple business economics.

You're the one with the blinders on. Again, how much do they pay you?

Re:Awesome quote

[Damarkus13]

It's not profitable for two companies to build out the same area and wind up with only half the potential customers. Fixed costs are the same, spread over half the customers, meaning the prices go up. Your desire to be able to choose would mean that everyone would pay more for the same service, not less.

This is why the last mile infrastructure should not be owned by ISPs. Or, they should be required to lease access at regulated rates.

Re:Awesome quote

[camperdave]

Actually, what needs to happen is a split between the company providing the cable, and the company providing the signal on that cable.

Re:Awesome quote

[whoever57]

That is how free markets work. When there is good competition, you have the highest available quality, and the lowest cost, the market will bear.

If you think that there is anything like a free market in providing TV and Internet to consumers, then I have a bridge to sell you. Other countries have forced the owners of the local loops to offer (at near cost) access to alternative suppliers. This has resulted in competition and far lower prices than in the USA.

Cable companies have received both direct and indirect subsidies to build out their infrastructure. The chance of an alternative (other than another incumbent) to that is close to zero.

Why isn't there another company offering to sell electricity or gas to me?

Re:Awesome quote

[F34nor]

You're a fucking moron. There is nothing even vaguely close to free market capitalism in any part of Comcast. They are a natural monopoly operating as a cartel / oligopoly. Cable companies have a high barrier to entry, they are profoundly non-transparent, they are engaged in rent seeking behavior and they exert undue influence on their regulators. So they are basically the worst aspects of capitalism combined with the worst part of Stalinism.

Basic question if you are the MOST HATED company in America how else could you stay in business except by anti-competitive practices? Most hated. MOST HATED! (Is there anything more yelling than caps?) Oh I know by paying fucking shills to FUD ta interwebs.

Re:Awesome quote

[Solandri]

No, it is not. They aren't keeping anyone else from competing, they've just made a reasonable business decision that it would not be profitable for one of them to compete with the other in an already built area, or to try building out at the same time.

There's no "business decision" involved in this. In most of the U.S., it's the municipal government (usually city, sometimes county) which awards exclusive cable TV service rights to a single company. Usually it was in exchange for a guarantee that lower income areas would get service (i.e. we'll give you a monopoly, but in exchange you have to provide service to 99.5% of the residences, including lower income areas). But in the last city I lived in it was a straight payola deal. The city let the cable companies bid on how much they'd pay the city per residence hooked up, and the highest bidder got the monopoly.

In the few areas with two or more cable companies, the second cable company usually had to butter up the local politicians ("donate" to their campaigns, aka pay bribes) or even file lawsuits to get rights to provide service. Some courts have ruled that the monopoly contracts the city entered are binding. Others have ruled that the city had no business granting a monopoly, and allowed other cable companies to provide service (that happened in the city I lived in prior to the one getting payola - the existing cable company dropped their prices $10/mo across the board the moment the second cable company announced they would begin providing service).

See, that's the dark side of Net Neutrality, and why free market types (conservatives, liberterians) generally oppose it. It's more government regulation to fix a problem caused by government regulation in the first place. If you're going to award monopolies to cable companies, then you need Net Neutrality. But if like most of the rest of the world you just let multiple cable companies compete freely with each other, you don't need Net Neutrality. Any ISP deliberately slowing down Netflix to try to get Netflix to pay them is shooting themselves in the foot - their customers will flee to other ISPs who don't slow down Netflix.

On a meta level, you initially want competition for cable service. Yes it's wasteful to have multiple hookups, but when the technology first rolls out, nobody is really which which implementation is the best (both in terms of cost and bandwidth). This is the sort of problem markets solve really well. So you want lots of cable companies competing to provide service, so that the ones with the best technology filter up to the top. Once the technology matures though, you want to treat it like a utility. One company is awarded a monopoly for rolling out the cables. But they're prohibited from providing service themselves - instead they must sell at a fixed rate to companies which provide the service.

This is pretty much how it was done with electricity. At first nobody was sure if AC or DC transmission would win out. So private companies implemented both types of systems (Edison backing DC, Westinghouse/Tesla backing AC). Eventually it became clear that AC was better for transmitting over long distances. Most municipalities grant the local power company a monopoly over providing and maintaining the electrical wires, but you can usually buy the electricity transmitted over those wires to your house from dozens of different energy providers. Gas and long distance telephone service works the same way. By this point I think it's pretty clear cable TV/internet is going to all end up with fiber to the home, and we need to transition it over to a utility model.

Re: Awesome quote

[Anonymous Coward]

I have 20+ different companies that I can buy electricity from. They compete on price, incentives, peak/off-peak hours and rates, and efficiency rebates. I have one physical connection to the grid maintained by a highly regulated monopoly utility.

That's exactly how I wish my internet worked.

Re:Awesome quote

[phantomfive]

the worst part of Stalinism

The worst part of Stalinism was that people who disagreed with him ended up dead. I don't like Comcast either, but this kind of hyperbole trivializes your point. Comcast is not as bad as Stalin.

Re:Awesome quote

[Attila Dimedici]

The whole business is fishy as hell. 29 states and in not one single location do they compete. The only reason they get away with it is because ...

they were banned from entering the market the other company was in when cable franchises were handed out in the first place (well, in most areas, they were banned from entering even the markets they are in, but they bought the companies that had been granted the franchise for that area).
The problem exists because our government created it. The cable monopolies did not start with the cable companies (although they worked to encourage it once it started).

So competition is bad?

[Anonymous Coward]

What the hell sense does this make? I thought the current groupthink is that that these ISP's have monopolies. I fail to see how this helps.

In short...

[Anonymous Coward]

and from the article,
  - City Manager can ignore council vote.
  - Comcast would appeal license denial and apparently would likely win it (why exactly?)

So really, the 'peoples' voice in all this is essentially irrelevant. Why does this sound wholly, unAmerican?

Re:In short...

[mjm1231]

Yep, that's the current system. Of course, since 1% of the people have 90% of the money, most likely your vote doesn't count for much.

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[account_deleted]

Comment removed based on user account deletion

Re:A government picking the winners and losers?

[RyoShin]

As opposed to when the government gives them a local monopoly?

Re:No, they didn't

[rsilvergun]

True, but it's nice when Americans get reminded just how powerless they really are. Maybe a few more of these and we'll start cracking down on corruption again. For example, that City Manager is almost certainly about to lose his job... and walk right into a nice gig with Comcast. There was a time in the 70s when we threw people in jail for that.