Comcast

FOR IMMEDIATE RELEASE                                                     

April 6, 2010                                                                                          

Contact:  Scott Cleland 703-217-2407

NetCompetition Comments on Impact of D.C. Circuit Vacating FCC Comcast Order

At core the FCC's contemplation of reclassifying, or effectively treating, unregulated broadband info services as regulated telecom services, would be tantamount to the FCC declaring "eminent domain" over private broadband providers, i.e. justifying a government takings of private property for public uses, but doing so "without just compensation" or any statutory authority. 

• The U.S. Constitution's Fifth Amendment requires: "nor shall private property be taken for public use, without just compensation."

A gaping missing element in all the FCC's discussions of all the new "public uses" it envisions for broadband in its pending National Broadband Plan and its proposed preemptive Open Internet regulations is any consideration at all of the potential hundreds of billions of dollars of un-budgeted liability to the U.S. Treasury that could result from the takings of private network property without just compensation -- at a time of skyrocketing trillion dollar Federal budget deficits and rapidly mounting public debt.   

News reports that the DOJ, and not the FTC, will conduct the antitrust review of the Comcast-NBCU deal is a very good development for the companies. 

First, DOJ's filing to the FCC on the National Broadband Plan just this week showed that the DOJ clearly understands that the cable industry is competitive and that DBS competition has improved innovation, content choice, and customer service in the market, and that telecom competitive entry has provided pricing pressure to the cable market as well. (See pages 15 & 16 of the DOJ filing.) 

Second, that same DOJ filing shows that DOJ rejects the radical thinking of FreePress that competition must be commodity-like to be competition and that pricing should be based on incremental costs. If the DOJ does not agree with FreePress' approach to analyzing competition in the National Broadband Plan they are unlikely to agree with FreePress' approach to analyzing competition in this Comcast-NBCU merger review. Simply, DOJ does not analyze competition and antitrust like FreePress does. DOJ is professional and driven by the facts and the law -- not politics. 

Third, the DOJ merger review process, because it is overseen by a single antitrust enforcer/prosecutor and not a commission with additional consumer protection responsibilities, is a much harder process for FreePress to politically influence/manipulate than the FTC. 

FreePress, which philosophically opposes competition policy, effectively is mocking antitrust law and authorities by cynically feigning to care about antitrust and competition in calling for an antitrust investigation of "TV Everywhere" efforts to enable authenticated paying video customers the additional convenience of accessing their paid-for content on any device at no extra cost. 

• FreePress is misrepresenting its latest report -- "TV Competition Nowhere" -- as antitrust analysis when it is standard FreePress villain-ization of broadband and media businesses.   

In their own words, FreePress is anti-competition, anti-property, and anti-business. 

For those interested in learning more about the net neutrality policy differences between the broadband sector and the applications sector, tune into my first debate with Mr. Markham Erickson, the Executive Director of the Open Internet Coalition, on the C-Span show "The Communicators" which first ran on 12-5-09 at 6:30 EST and will re-air on 12-7-09 at 8am and 8pm EST.

It is instructive to see the very wide gulf between us on what the FCC open Internet regulations would do.   

The reality of vibrant competition in every segment of the proposed Comcast-NBCU joint venture, combined with the companies' proactive public interest commitments, will pave the way for ultimate Government approval of this deal.

Vociferous anti-business opponents like FreePress have preemptively kicked up a lot of dust about this proposed deal, but when FreePress' initial contrived dust cloud settles -- the reality of competitive facts will ultimately drive the process. 

To see "smoking gun" proof that "net neutrality" is a made-up issue and argument, read the short but telling excerpt below from George Lakoff's Book: "Thinking Points" published October 3, 2006, when the only net neutrality incident at that time was the FCC's Consent Decree with rural telco, Madison River Communications in February 2005.  

From Thinking Points, Chapter 8, The Art of Arguments:

"Thus, the argument for Net neutrality becomes an argument for government regulation in this form by the FCC.

Given that the apparent justification for new formal net neutrality rules is that fifteen-year policy has failed and that the market is unable to ensure consumer choice, the FCC will need to justify with facts that broadband providers indeed have market power to exercise anti-competitively.

Kudos to Larry Darby of the American Consumer Institute for his excellent and illuminating comparative financial analysis of the market power and profits of broadband companies vs. Internet companies. From his post: 

What an "Open Internet" does not mean is as important as what it does mean.

• Surely an "Open Internet" is not intended to mean what it certainly can mean: un-protected, unguarded, or vulnerable to attack. 


• Thus, it is essential for the FCC to be explicit in defining what the terms -- "Open Internet," "net neutrality," and Internet non-discrimination -- don't mean, as well as what they do mean.

The word "open" has 88 different definitions per Dictionary.com and the word "open" has even more different connotations depending on the context. While the term "open" generally has a positive connotation to mean un-restricted, accessible and available, it can also have a negative or problematic connotation if it means unprotected, unguarded or vulnerable to attack.