Comcast the little guy? There’s competition everywhere, the company argues.


(By Free Press)

Comcast says it has loads of competition -- everyone from Facebook to Apple, which Comcast says is contemplating a television set-top box to compete with cable service. Plus, Netflix and Amazon are already giants in online video, which also keeps the company on its toes, Comcast said in a regulatory filing for its proposed merger with Time Warner Cable.

"The difference between all those competitors and us is they have global and national scale,” said Comcast executive vice president David Cohen. That scale allows companies like Netflix and Apple to sell their products globally and invest in research, development and new technology. Comcast needs the merger with Time Warner to reach that level, he argued.

But defining its competition in the broadband Internet industry may be harder for Comcast to do, some public interest groups and technology experts say. And those definitions may be the crux of federal reviews into the company's $45 billion bid to become a national broadband business.

In its filing to the Federal Communications Commission on Tuesday, Comcast counted DSL, wireless and satellite as competitors to cable modem Internet, largely considered the fastest services and the only methods for getting consistent and smooth streams of high-quality videos. Cohen pitched that argument in a conference call, saying that some DSL providers offer download speeds of as high as 40 Mbps and that SoftBank chairman Masayoshi Son envisions wireless connections as fast as 200 Mbps. 

But critcs weren't buying Cohen's definitions of what is true broadband -- and what is truly Comcast's competition.

"True broadband is the product that can deliver large amounts of high-quality video to consumers, which makes it the primary area for potential competition," said Mark Cooper, a researcher for the Consumer Federation of America. "Comcast’s own advertising and executive statements make it clear that DSL is not a substitute."

Wireless data plans are expensive, limited by usage caps and hefty overage fees. SoftBank's Son may envision a future of 200 Mbps speeds over mobile, but that's very far off, consumer groups say. Currently, LTE speeds top off around 10 Mbps for downloads. Cable offers Internet speeds as high as 500 Mbps. Google Fiber's limited service is offered at 1 Gbps speeds, but its multi-city rollout is also years away.

As for DSL, about half of U.S. homes don't use the faster version that Cohen describes, said Derek Turner, research director for Free Press, a public interest group that opposes Comcast's merger with Time Warner Cable. About half of the 31 million customers who subscribe to Internet service through their phone company use a first-generation DSL service with speeds of about 3 to 6 Mbps, which is basically good for checking e-mail and other minor tasks online. Many homes either don't have access to the fastest DSL services or can't afford it.

Here's why speeds matter: The future of entertainment is online, and companies that supply the fastest connections have the most power over the slew of industries that want to get their Web content and services to consumers. Comcast will have 40 percent of the broadband Internet market if the merger with Time Warner is approved.

"Does Comcast, on parts of its business, face competition? Yes," Turner said. "But this is really about the wire sticking out of your home. The competition from Netflix and other over-the-top firms doesn't matter as much as the fact that they have to pass through Comcast's gates into American homes."

 

 

 

Cecilia Kang is a staff writer covering the business of media and entertainment.
Comments
Show Comments

business/technology

the-switch

Most Read Business
Next Story
Hayley Tsukayama · April 8, 2014