Some truth about Comcast - WikiLeaks style

George Bonser gbonser at seven.com
Tue Dec 14 21:25:14 CST 2010



> From: Jared Mauch 
> Sent: Tuesday, December 14, 2010 6:24 PM
> Subject: Re: Some truth about Comcast - WikiLeaks style
> 
> 
> 
> This requires one or more of the following:
> 
> o regulatory action
> o last mile regulation or competitive access
> o subsidies for new players
> o massive capital outlays
> o state laws changed in various markets
> o reformation of USF
> o changes at NTIA
> o changes at USDA (RUS)

Well I don't believe it requires any of the above.  For example, Comcast
had the cable TV monopoly where I live.  About 2 years ago, AT&T began
rolling out their U-verse service and from the looks of things, has
taken a serious bite out of Comcast's monopoly here.  Comcast has closed
many offices including the one in my town.  In other areas, Verizon is
rolling out their similar FiOS product.  Over a growing part of the
country, Comcast doesn't have the "captive" audience they once had.
Don't get me wrong, they are still in the market.  My oldest is a
Comcast subscriber but he now has choices he didn't have as little as a
year ago.

My personal opinion is that increased regulatory action is
self-defeating.  It ends up causing more problems than it solves.  What
we need is competition in the marketplace.  Deregulation in most cases
would actually improve the situation where current regulations grant
operating monopolies to certain companies in local regions.  These local
regulations often do not view things in the global scope.  A thousand
local cable monopolies granted to any company results in a global
aggregate of a lot of "captive" users that can be leveraged in a
marketplace outside the jurisdiction granting the monopoly.  In the
sense that elimination of monopolies is " state laws changed in various
markets" then yeah, maybe one of those points makes sense.

Competitors are ramping up.  I haven't seen any recent numbers but in
April, AT&T crossed 2.3 million U-verse users and was available in over
20 million housing units in the US.   Verizon FiOS is at about 4 million
subscribers.  As of September, Comcast is reported to have 16.7 million
broadband internet customers.

If monopolies are needed in order to get service to an area, make them
"last mile" wire monopolies that provide no content of their own and
allow the content providers (Comcast, Verizon, AT&T, etc.) provide
service over the infrastructure on a competitive basis.  Content
monopolies tied to the infrastructure are bad for everyone and as
existing monopoly agreements expire, more competition is entering the
market.  I would possibly compromise by saying a company willing to
install the infrastructure could get a one-time monopoly for some period
of time, after which the infrastructure is spun off as a separate
company and opened up to competitive access.

Better not to meddle, in my opinion, as the meddling ends up causing
unintended consequences.  Open up the markets to competition and give
people choices, then net the networks establish what policies think best
for their networks rather than attempting to dictate policy from a
central authority.  The one with the policy that best fits the user's
needs will get their reward.

> I can get a 10G across an ocean for cheaper than I can get one
> delivered over a 1 mile distance in a neighborhood.

Heh, I can get a 10G metroE across town cheaper than I can get a 10G
port and local cross connect inside some colo providers operations.

> I do believe that FTTH will eventually become the solution to all the
> edge network ills, but at the same time, replacing that costs a lot of
> money.

I believe AT&T is taking a hybrid approach.  Fiber to local distribution
boxes within a block or two of the home and using the existing copper
but replacing the drops to the home in most cases with something newer.

 
> Take a look at this article from 2008 -
> http://bits.blogs.nytimes.com/2008/08/19/a-bear-speaks-why-verizons-
> pricey-fios-bet-wont-pay-off/

FiOS seems to be gaining customers at a slightly faster rate than
U-Verse but both seem to be gaining users.  The Wiki says: 

"As of June 30, 2009, FiOS Internet had 3.1 million customers (up 31% in
last year), and FiOS TV had 2.5 million customers (up 46% in prior year)
with FiOS services offered to over 11 million premises nationwide.

Verizon announced in March 2010 that they were winding down their FiOS
expansion, concentrating on completing their network in areas that
already had FiOS franchises but were not deploying to any new areas,
which included the cities of Baltimore and Boston, who had not yet
secured municipal franchise agreements."


So it is those franchise agreements that need to go away and open the
markets up to competition and let everyone, including Comcast, compete
on an equal basis without "captive" customers. IMHO.





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