Comcast Defends Merger After FCC Chairman Laments Lack of Consumer Internet Choice

After FCC Chairman Tom Wheeler gave a speech pointing out the lack of high-speed Internet service options for most consumers, some public interest groups saw it as a swipe at industry consolidation, namely Comcast’s plans to merge with Time Warner Cable.

But on Friday, Comcast executive vice president David L. Cohen defended the merger, distancing the company’s plans from the state of the broadband marketplace. He reiterated that Comcast and Time Warner Cable don’t compete against each other in any market so the combination won’t have an impact on competition.

“To be clear, whether you are satisfied with the robust state of broadband competition today or deeply troubled by an absence of broadband competition, our transaction will simply not have a negative impact on the current competitive state of the broadband market in America today,” he wrote. “In fact, the increased scale created by this transaction will accelerate and encourage even more investments in R&D, innovation, and infrastructure – all of which will be good for broadband investment and competition, and ultimately benefits consumers.”

Cohen also defended the industry as a whole, noting that providers have invested $1.2 trillion in networks since 1996, and that Comcast has increased broadband speeds 13 times in the last 12 years. He also said that telco companies are investing in upgrades to DSL service that will be competitive with cable Internet service, and 4G wireless technology is delivering speeds “over 50 Mbps and averaging in the double digits.”

“Such broadband access may not be fully competitive with the fastest speeds that wireline broadband are capable of delivering today, but the technology is a viable substitute for many uses of the Internet today and will indisputably provide even more competition in the future,” he wrote.

Wheeler didn’t mention Comcast by name, but he said that DSL service hasn’t been able to keep up with cable providers, wireless broadband still isn’t a viable alternative and new ventures like Google Fiber are not yet widespread.

Wheeler said “there is simply no competitive choice for most Americans. Stop and let that sink in… three-quarters of American homes have no competitive choice for the essential infrastructure for 21st century economics and democracy. Included in that is almost 20 percent who have no service at all.”

Nevertheless, public interest groups seized on Wheeler’s comments as a good sign that he has recognized the problems of consolidation, as well as of the need for robust net neutrality rules.

“With this understanding of the market, we don’t see how allowing any further consolidation of the broadband market can possibly make broadband better, as Comcast and AT&T have claimed,” said Harold Feld, senior VP at Public Knowledge.

Also expressing praise to Wheeler’s remarks was Netflix, which is opposing the Comcast-TWC merger and has urged the FCC to establish net neutrality rules that also cover interconnection, or the agreements content companies make with Internet providers to connect their transmissions to their networks. Netflix’s chief lobbyist Christopher Libertelli wrote that Wheeler “forcefully stated a hard truth — there simply is not enough competition to protect consumers and businesses who rely on the Internet.”

The FCC is reviewing the proposed Comcast-TWC merger, with a Sept. 23 deadline for Comcast to file responses to comments for or against the transaction. Responses to those responses are due Oct. 8. After that, it is expected that the FCC and the Department of Justice will make a decision by the end of the year or early in 2015.

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