Wherever you sit politically, I think it is a safe bet that you are not paying attention to the Internet “net neutrality” issue or the looming media merger and acquisition blitzkrieg (Comcast buying Time Warner Cable and Fox buying Time Warner Entertainment…with smaller mergers to follow).
Not that I would blame you because net neutrality is as boring as watching paint dry and you probably don’t care about the mergers and acquisitions as long as you can still update your status on Facebook, post a selfie or watch the last season of “Two and a Half Men” uninterrupted.
But you should care. Here’s why.
Currently, you and I have the same access to the same Internet that Google, Facebook, Amazon, Netflix, etc. have. In more simple terms, it is a level playing field regarding access to the bandwidth of the Internet.
The FCC’s proposed change is to divide that bandwidth into two lanes, one for those companies that use more bandwidth, like Netlfix (which can account for 47% of Internet usage on any given night) to pay more for that, thus creating a “fast lane”. Leaving the rest of that bandwidth for you and me.
Doesn’t sound awful right? Makes a little sense, right?
It stifles entrepreneurship because entrepreneurs simply won’t have the funds to purchase access to the “fast lane” in order to compete with the larger companies. And there are certain political organizations who scream, bitch, piss and moan about how entrepreneurship is the back bone of America and free-market capitalism. Oddly, I agree. But this proposed change completely decimates the possibility of ever experiencing another Jeff Bezos or Mark Zuckerberg.
That aside, here’s the dollars and cents of how that breaks down. Comcast then charges Netflix, etc. more to access and use their bandwidth. Fine, in and of itself, not awful (in fact, this exact scenario has already played out between Comcast and Netflix, say what you want about Netflix CEO Reed Hastings – a little nuts – but he’s very very smart).
BUT according to FCC Chairman Tom Wheeler’s proposal of a divided Internet, here is how that plays out for you and I:
1. Comcast charges Netflix more for Internet bandwidth.
2. Netflix rolls that cost over onto the consumer.
3. Comcast is now receiving two distinct revenue streams from two sources (Netflix and consumer) while DECREASING the speed of access for the consumer.
4. By dividing the current infrastructure in two, it in NO WAY encourages broadband companies, like Comcast, to invest in re-building the infrastructure to make our Internet speeds competitive with other countries.
5. Comcast (and other providers) continue to raise broadband costs (the United States is the only country where Internet service costs keep rising), to the tune of two to three times the rate of inflation (that’s an aggregate increase of 4.6% since 2003). Comcast’s Lord of Lobbying, David Cohen (and his giant balls) has even gone on record saying “We’re certainly not promising that customer bills are going to go down.” W.T.F.?!
6. We’re paying more each year for the same access (which is shit to begin with). If this divided Internet deal passes (as I think it will) we’ll be paying more each year for HALF of the current shitty access we currently have!
For the quality, a 45-magabit-per-second (Mbps) download, the United States ranks 30th out of 33 developed countries. Eastonia, Slovakia and even Moldova have faster speeds!
For the price, Comcast’s fastest download speed, 105 Mbps in San Francisco, costs $114.95. In Hong Kong, 500 Mbps costs $35 per month.
I’m not entirely sure who on earth could argue that a divided Internet benefits ANYONE other than the broadband providers. It motivates them to do nothing other than continue to charge more and more for less and less to you and I.
Thank you FCC.
Now, why are these mergers and acquisitions awful and what makes you think they will actually get approved?
Well, regarding the Comcast acquisition of Time Warner Cable, last year Comcast spent more on lobbying in Washington than any other company besides Northrop Grumman, the defense contractor. Also last year, Comcast gave 17 million dollars to nonprofits…are we still so naive as to think this doesn’t provide political influence? During the last big Comcast merger, with NBCUniversal in 2011, no less than 54 groups that received Comcast cash wrote letters of support to the FCC. I am just guessing there is no correlation between those letters and Comcast dollars.
Cumulatively, in 2013 the media industry (computers, Internet, music, TV, movies) spent $257 million dollars lobbying.
Now, why will Rupert Murdoch eventually purchase Time Warner Entertainment? Because he is Rupert Murdoch. If Satan has an earthly bound mortal counterpart, he may in fact be Rupert Murdoch. The guy always gets what he wants.
“OK, so what? How does that impact me?”
Right now Comcast owns more of the physical infrastructure, high-speed wires, than any other company in America. Comcast is the largest cable company in America. In short, they own not only the content, they own the distribution of the content and the method of distribution.
A combined Comcast and Time Warner Cable would be SEVEN TIMES the size of its nearest cable rival and would be the dominant broadband provider in 19 of the countries 20 top markets…and this is AFTER shedding millions of subscribers voluntarily in order to get the deal through! (psst, content and advertiser influence aside, that kinda might be a monopoly…just sayin).
And Murdoch’s Fox? I shudder to think of him injecting his “fair and balanced” ideology into even more content. I don’t think that benefits anyone, especially those that watch it.
This is a complicated issue with even more complicated long term repercussions and I don’t mean to over simplify the issues, so I will leave you with two questions that sum it up:
When have government agencies, independent like the FCC or otherwise, ever done wrong by the public at the behest of lobbying groups and corporate interests?
When have giant corporate mergers ever destroyed any sense of capitalism and competitiveness and gone on to benefit their employees or consumers?
* I am a Comcast employee and shareholder, so I could potentially benefit from a TWC and Comcast merger. Biting the hand that feeds? Maybe.