Thursday, August 28, 2014

CATV and Monopolies

I read a piece in Ars Technical alleging that Comcast is taking measures to delimit competition.

The article states:

CenturyLink has accused Comcast of trying to prevent competition in cities and towns by making it difficult for the company to obtain reasonable franchise agreements from local authorities. CenturyLink made the claim yesterday in a filing that asks the Federal Communications Commission to block Comcast’s proposed acquisition of Time Warner Cable (TWC) or impose conditions that prevent Comcast from using its market power to harm competitors. Comcast has a different view on the matter, saying that CenturyLink shouldn’t be able to enter Comcast cities unless CenturyLink promises to build out its network to all residents. Without such conditions, poor people might not be offered service, Comcast argues.

Now that was the same game we saw when we tried to build Hanover, NH.  The incumbent had been Adelphia then bought by Comcast. Then things started, the town demanded almost 100% coverage and more. We wrote a paper discussing this at the time.

It was this added cost that made any entry prohibitive. As we saw it the town just did not comprehend the economics. All we had asked for was a equal and level playing field, the town apparently at the CATV's insistence demanded complete coverage. Frankly no CATV system does that, there are always dead zones due to reasonable economics.

As we have noted before, the merger, politically correct with the current administration, is unacceptable from any reasonable antitrust position in my opinion.