) ) ) ) ) ) ) ) ) COMMENTS OF THE NATIONAL HISPANIC MEDIA COALITION

Transcription

1 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC In the Matter of Applications of Comcast Corp. and Time Warner Cable Inc. For Consent To Assign or Transfer Control of Licenses and Authorizations MB Docket No COMMENTS OF THE NATIONAL HISPANIC MEDIA COALITION August 25, 2014 Michael J. Scurato, Esq. Jessica J. González, Esq. National Hispanic Media Coalition 55 South Grand Avenue Pasadena, CA (

2 SUMMARY The proposed combination of Comcast and Time Warner Cable would make Comcast the dominant (and often only provider of cable television and/or high-speed Internet access in 19 of the top 20 and 43 of the top 50 Designated Market Areas ( DMAs, including important markets such as Los Angeles, New York, Chicago, and Washington, DC. As a result of the deal, the new Comcast would control almost 30 percent of the cable video market, nearly 40 percent of the high-speed Internet market, and more than 50 percent of the market for triple play service bundles (telephone, television, Internet. The network of the combined company would pass nearly 70 percent of the households in the United States. Historically, NHMC has evaluated transactions that would combine multiple players in the same industry with an eye towards how the resulting entity and market structure would serve and impact Latinos. This particular transaction is of great importance to Latinos, as its completion would make Comcast the cable provider for up to 90 percent of Latinos nationwide. Not only would this subject a large percentage of Latinos to Comcast s prices and business practices, but it would also make Comcast the main gateway that many independent content producers would need to access to reach the growing Latino market. This could have major implications for Latino consumers and content creators alike. In order to assist the Commission in its evaluation of this transaction, NHMC submits to the record a number of questions related to: program carriage and distribution; affordability; data caps, overages, and usage-based pricing; Internet Essentials Comcast s Low-Income Program; customer service; business relationships with other MVPDs; the Open Internet; regional sports networks; and jobs. The Commission should explore these questions and other considerations to determine whether or not, on the balance, this transaction would serve the public interest, convenience, and necessity. ii

3 TABLE OF CONTENTS SUMMARY... ii I. PROGRAM CARRIAGE AND DISTRIBUTION... 3 II. III. IV. 1. How could this proposed transaction impact the business of new and established content producers that are unaffiliated with Comcast/NBCU? Would this transaction make it more difficult for independent and established networks to reach a Latino audience? What are the implications of having one pay television provider serve more that 90 percent of Latino cable subscribers? Does this impact whether or not certain critical information needs are met?... 5 AFFORDABILITY Comcast has been careful not to claim that this transaction would decrease prices for consumers. What will be the true impact of this transaction on prices for consumers, especially for individuals who do not qualify for Comcast s low-income Internet access option, Internet Essentials? Time Warner Cable s least expensive Internet access plan for general subscribers starts at $14.99 per month and Comcast s starts at nearly $40. Would the combined company shift more towards Comcast s pricing structure or Time Warner Cable s? Would it maintain Time Warner Cable s affordable options? Would Latinos, other people of color and the poor, already the least likely groups to be online, be displaced from broadband and pay television due to rising costs associated with this acquisition?... 9 DATA CAPS, OVERAGE FEES, AND USAGE-BASED PRICING Does Comcast plan to roll out usage-based pricing, data caps, and overage fees to current Time Warner Cable customers within the next 5 years including a possible plan that Time Warner Cable customers have already rejected? What implications does this have for the large portion of Latinos that would be served by the combined company and may only be able to afford one Internet access service? Are data caps, usage based fees and usage-based pricing fair practices that serve the public interest and, more significantly, would this merger pave the way for more widespread use of these practices? INTERNET ESSENTIALS COMCAST S LOW-INCOME PROGRAM Would the expansion of Internet Essentials to Time Warner Cable subscribers be the public interest benefit that Comcast suggests when current participation rates remain very low? iii

4 2. Do additional barriers exist within Internet Essentials that limit its efficacy? V. CUSTOMER SERVICE VI. VII. 1. Would the proposed combination of Comcast and Time Warner Cable serve to improve or exacerbate existing and long-standing customer service issues in this industry? BUSINESS RELATIONSHIPS WITH OTHER MVPDS Would this proposed transaction enable Comcast to leverage its large content library and distribution network to act in an anti-competitive manner towards other cable, pay television, or online video providers especially after any commitments to work with these competitors expire? THE OPEN INTERNET What would be the implications of this transaction on the preservation of the Open Internet after commitments to abide by the FCC s 2010 order expire in 2018 or beyond? The Open Internet commitments in the FCC s 2010 order were insufficient insofar as they failed to prevent Netflix and Comcast from entering into an interconnection agreement that improved the transmission of Netflix content. Is this dynamic between edge providers and Internet service providers good or bad for the public and would this acquisition exacerbate these circumstances? VIII. REGIONAL SPORTS NETWORKS IX. 1. Would the completion of this transaction concentrate live sports content and regional sports networks to the point that it would enable Comcast to harm competitors by withholding must-have content or demanding onerous terms for carriage? JOBS Would this proposed transaction lead to significant redundancies and job losses? CONCLUSION iv

5 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC In the Matter of Applications of Comcast Corp. and Time Warner Cable Inc. For Consent To Assign or Transfer Control of Licenses and Authorizations MB Docket No COMMENTS OF THE NATIONAL HISPANIC MEDIA COALITION ( NHMC The National Hispanic Media Coalition ( NHMC respectfully submits these comments in response to the Federal Communications Commission s ( FCC or Commission Public Notice seeking input on the applications of Comcast Corporation, Time Warner Cable Inc., Charter Communications, Inc. and SpinCo to assign and transfer control of FCC licenses and other authorizations. 1 As the Commission is well aware, this transaction, which would combine the two largest cable companies in the country, would forever change the markets for video and high-speed Internet access services. The primary transaction is valued at over $45 billion dollars and would make Comcast the dominant (and often only provider of cable television and/or high-speed Internet access in 19 of the top 20 and 43 of the top 50 DMAs, including important markets such as Los Angeles, New York, Chicago, and Washington, DC. As a result of the deal, the new Comcast would control almost 30 percent of the cable video market, nearly 40 percent of the 1 Commission Seeks Comment on Applications of Comcast Corporation, Time Warner Cable Inc., and Charter Communications, Inc., and SpinCo, to Assign and Transfer Control of FCC Licenses and Other Authorizations, Public Notice, MB Docket No (rel. July 10, 2014; See Comcast Corp. & Time Warner Cable, Applications and Public Interest Statements, Application of Comcast and Time Warner Cable for Consent to Transfer Control of Licenses and Authorizations, MB Docket No (Apr. 8, 2014 ( Comcast Application.

6 high-speed Internet market, 2 and more than 50 percent of the market for triple play service bundles (telephone, television, Internet. 3 The network of the combined company would pass nearly 70 percent of the households in the United States. 4 Historically, NHMC has evaluated transactions that would combine multiple players in the same industry with an eye towards how the resulting entity and market structure would serve and impact Latinos. NHMC has traditionally focused on how a proposed transaction would impact competition, prices, consumer choice, customer service, and jobs. 5 This transaction further implicates diversity in our media and communications systems, as both of the primary parties involved originate and distribute entertainment, news, and sports content over their cable systems and online, and purchase vast amounts of original content from other entities. This particular transaction is of great importance to Latinos, as its completion would make Comcast the cable provider for up to 90 percent of Latinos nationwide. 6 Not only would this subject a large percentage of Latinos to Comcast s prices and business practices, but it would also make Comcast the main gateway that many independent content producers would need to access to reach the growing Latino market. This could have major implications for Latino consumers and content creators alike. 2 Press Release, Leichtman Research Group, About 385,000 Add Broadband In The Second Quarter Of 2014 (Aug. 15, 2014, available at 3 Press Release, Free Press, Comcast-Time Warner Cable Merger Would Be a Disaster for Consumers (Feb. 12, 2014, available at 4 Id. 5 See Petition to Deny of National Hispanic Media Coalition, National Institute for Latino Policy, WT Docket No (filed May 31, 2011, available at 6 Press Release, Congressman Tony Cárdenas, Cárdenas, Dozens Of Reps, Demand Potential Comcast-Time Warner Merger Protect Independent Latino Voices In Media (Aug. 3, 2014, available at 2

7 Given the sheer magnitude of this proposed transaction, and the number of Latinos that it could potentially impact, NHMC submits to the record a number of questions that the Commission must ascertain answers to over the course of its review. Each question is relevant to whether or not this transaction would serve the public interest. The Commission, in order to fulfill its statutory obligations under Section 310(d of the Communications Act, should explore these questions and other considerations to determine whether or not, on the balance, this transaction would serve the public interest, convenience, and necessity. 7 I. PROGRAM CARRIAGE AND DISTRIBUTION A larger Comcast with a wider reach, which would result from the approval of this transaction, necessarily means that networks, from larger content producers to smaller independent voices, would be required to seek carriage with Comcast or risk missing out on almost 30 percent of pay television subscribers, including subscribers in almost every major market in the country. For a network seeking to reach the Latino audience, failure to secure carriage with Comcast could prove disastrous, as it would mean lacking access to up to 90 percent of Latino pay television subscribers, and would make the network an undesirable target for potential investors and advertisers alike. To date, a number of independent networks from across the spectrum have publicly commented on this dynamic. Michael Schwimmer, CEO of NuvoTV, the premier Englishlanguage entertainment network created for modern Latinos with superstar Jennifer Lopez serving as Chief Creative Officer, expressed concerns. 8 He stated, It s about being able to get programming into peoples homes, past the gatekeepers. It s an uphill battle. This is just one 7 47 U.S.C. 310(d. 8 ABOUT US NUVOTV, (last visited Aug. 25,

8 more step in that direction. 9 Chris Balfe, CEO of The Blaze network, expressed similar sentiments saying that major multichannel video programming distributors ( MVPDs, like Comcast, do not have a good history of supporting independent programmers whose content is in demand like The Blaze, and we are skeptical that giving Comcast even more market power will benefit consumers, promote competition or lead to more diversity of voices or consumer choice on their channel line ups." 10 If this merger is completed, Comcast could have more power to enter into, or decline to pursue, business deals with other large content providers on its own terms. Some have expressed worries that Comcast would use its power as a service provider to favor Comcast/NBCU content over others. Randy Falco, CEO of Univision, has highlighted Comcast s decision not to carry Univision s sports network, Univision Deportes Network, as evidence that Comcast already makes carriage decisions to protect its own properties. Falco has stated that Comcast is the only major distributer that has declined to carry this network, and has questioned whether or not that decision has been made to protect the audience of Comcast/NBCU s Spanish-language network, Telemundo. According to Falco, "Either Comcast doesn't understand that soccer is a passion point for Hispanics or they don't support competitors who have competing services. My fear is that the latter is the case and this type of anti-competitive conduct would continue." 11 Falco went on to state that a combined Comcast/Time Warner Cable would have staggering influence over 9 Christopher Palmeri, Comcast Heft Blurs Future for Smaller Pay-TV Networks, BLOOMBERG (Feb. 14, 2014, available at 10 R. Thomas Umstead, Independent Networks Offer Mixed Opinions about Comcast-Time Warner Cable Merger, MULTICHANNEL NEWS (Feb. 17, 2014, available at 11 Brian Stelter, Univision airs concerns about Comcast deal, CNN MONEY (Apr. 28, 2014, available at 4

9 Hispanic Consumers and could be bad for competition and, most importantly, bad for Hispanic audiences." 12 Similar complaints have been reported by the media in the past both with Bloomberg, which Comcast located within its cable system on a channel far from CNBC and other similar business networks, and with the Tennis Channel, which Comcast only included in a more expensive service tier while keeping its own Golf Channel and NBC Sports Network as part of a lower priced package. 13 Questions 1. How could this proposed transaction impact the business of new and established content producers that are unaffiliated with Comcast/NBCU? 2. Would this transaction make it more difficult for independent and established networks to reach a Latino audience? 3. What are the implications of having one pay television provider serve more that 90 percent of Latino cable subscribers? Does this impact whether or not certain critical information needs are met? II. AFFORDABILITY For many years, NHMC has worked to ensure that Latinos have affordable access to advanced communications and media services. Latinos face poverty at rates higher than the general population and have lower broadband adoption rates than many other groups. 14 Cost is 12 Id.; Cecilia Kang, Univision CEO joins small, mighty group of Comcast merger critics, WASH. POST (Apr. 29, 2014, available at 13 See David Lieberman, Can Comcast Be Trusted? Company Report Says It Exceeded Promises In NBCU Deal, DEADLINE (Mar. 3, 2014, available at 14 See Poverty in the United States: A Snapshot, NAT L CTR. FOR LAW AND ECON. JUSTICE, (last visited Aug. 25, 2014; Kathryn Zickuhr & Aaron Smith, Home Broadband 2013, PEW RESEARCH CENTER 3 (Aug. 26, 2013, available at 5

10 often found to be one of the primary factors preventing more Latinos from getting online. 15 Cable broadband and pay television pricing is incredibly important to ensuring that Latinos are able to access information and opportunities at the same rates as others. By some measures, Comcast s prices have increased in recent years. By one count, rates have risen by 97 percent in the last 14 years. 16 By another count, in Philadelphia and Atlanta, Comcast s price for its basic Internet tier increased by more than 50 percent from 2009 to Prior to recent increases, Comcast reportedly charged prices higher than most other television and Internet access providers in many markets. 18 In fact, Comcast s lowest priced standalone broadband option for general subscribers costs about $40 per month. 19 In contrast, Time Warner Cable offers affordable, entry level Internet access service to general subscribers at about $14.99 per month. 20 Comcast would argue that its prices reflect the value of services received and that Comcast s services have increased in value in recent years, through additional channels on its 15 See Exploring the Digital Nation: America s Emerging Online Experience, NAT L TELECOMM. AND INFO. ADMIN, DEP T OF COMMERCE 38 (June 2013, available at _americas_emerging_online_experience.pdf. 16 Ben Hallman & Timothy Stenovec, Just How Dangerous Is A Giant Comcast?, HUFFINGTON POST (Feb. 22, 2014, available at 17 Farhad Manjoo, Comcast vs. the Cord Cutters, N.Y. TIMES (Feb. 15, 2014, available at 18 See Robert C. Atkinson & Ivy E. Schultz, Broadband in America: Where It Is and Where It Is Going (According to Broadband Service Providers, COLUMBIA INST. FOR TELE-INFORMATION (Nov. 11, 2009, available at 19 High Speed Internet Service By XFINITY, COMCAST.COM, (last visited Aug. 25, Cable Internet Plans & Package Deals, TIMEWARNERCABLE.COM, (last visited Aug. 25,

11 cable system in higher Internet access speeds. 21 Whatever the reasons for rising prices, the impact that they have on a customer s pocketbook does not change. Pricing data often measures advertised prices and does not take into account price increases through below the line fees. For instance, just this year Comcast increased its cable modem rental fee from $7 to $8 per month. It also introduced a monthly $1.50 broadcast TV fee that it explains helps defray costs of retransmission consent fees. 22 Comcast and other service providers also collect regulatory recovery fees that defray the costs of complying with certain regulations as well as passing along to consumers much of its state and local tax burdens. 23 These below the line fees are in addition to increases in advertised rates of $2 per month on each broadband tier and $1-2 per month on certain television packages. 24 Below the line fees and rate increases help contribute to an estimated margin of approximately 97 percent on provision of Internet access service. 25 By one report, Comcast collects an average of $156 per month from each customer. 26 When asked about the potential impact of the transaction on cable bills, David Cohen, Comcast s Executive Vice President, 21 See Edward Wyatt, As Services Expand, Cable Bills Keep Rising, N.Y. Times (Feb. 14, 2014, available at 22 Mike Farrell, Comcast to Introduce $1.50 Broadcast TV Fee, MULTICHANNEL NEWS (Nov. 22, 2013, available at broadcast-tv-fee/ See Understanding the Taxes and Surcharges on Your Bill, COMCAST.COM, (last visited Aug. 25, Karl Bode, Comcast Rate Hikes Expand, Adds New Broadcast TV Fee, DSL REPORTS (Nov. 22, 2013, available at Adds-New-Broadcast-TV-Fee Brad Reed, Cable companies comically profitable margins said to provide little incentive to invest in fiber, BGR.COM (Feb. 6, 2013, available at 26 Tim Wu, The Real Problem With The Comcast Merger, NEW YORKER (Feb. 14, 2014, available at 7

12 stated, We're certainly not promising that customer bills are going to go down or even increase less rapidly. 27 A comparison of Comcast s ultra-high-speed connections with the 1 gigabyte per second ( gbps Google Fiber offering, which is seen as a disruptive product that is only offered in a very limited number of cities across the country, offers interesting insight into broadband pricing generally. Google Fiber offers residents of its service area a 1 gbps connection for $70 per month. Comcast s fastest option, available only in select markets, appears to top out at 505 megabytes per second ( mbps, or about half the speed provided by Google, for $400 per month with an early termination fee of more than $1,000 and installation and activation fees of $500 more. 28 In one of the few markets where Comcast competes with Google Fiber Provo, Utah Comcast is able to offer a 250 mbps speed tier for $70 per month. 29 In most other markets, Comcast s service only reaches 105 mbps at a cost of $115 per month Brad Reed, America s broken home broadband market gets perfectly summed up in one quote, BGR.COM (Feb. 14, 2014, available at 28 Jeff Baumgartner, Comcast Raises Top-End Residential Broadband Tier to 505 Mbps: Speed Upgrade Of $300 Fiber-Fed Service Comes On Heels of Verizon s New 500-Meg FiOS Offering, MULTICHANNEL NEWS (Sept. 17, 2013, available at mbps/145511; Karl Bode, Comcast-Backed Lobbyist Insists Seattle Doesn t Want Faster, Cheaper Broadband, TECHDIRT (Feb. 12, 2014, available at 29 Google Fiber has Competition from Comcast in Provo, Utah, GOOGLE TODAY BLOG (Aug. 30, 2013, available at 30 In some markets, Comcast recently increased the speed of its 105 mbps speed tier to 150 mbps. Press Release, Comcast, Comcast Revs Up Internet Speeds Across Four States (July 31, 2014, available at 8

13 Questions 1. Comcast has been careful not to claim that this transaction would decrease prices for consumers. What will be the true impact of this transaction on prices for consumers, especially for individuals who do not qualify for Comcast s low-income Internet access option, Internet Essentials? 2. Time Warner Cable s least expensive Internet access plan for general subscribers starts at $14.99 per month and Comcast s starts at nearly $40. Would the combined company shift more towards Comcast s pricing structure or Time Warner Cable s? Would it maintain Time Warner Cable s affordable options? 3. Would Latinos, other people of color and the poor, already the least likely groups to be online, be displaced from broadband and pay television due to rising costs associated with this acquisition? III. DATA CAPS, OVERAGE FEES, AND USAGE-BASED PRICING NHMC fears that the use of data caps, overage fees, and usage-based pricing models in both the wired and wireless broadband markets could disproportionately raise prices for consumers. Many Latinos, who may not be able to afford multiple devices and service plans to access the Internet, must more heavily utilize a single connection and could potentially face overage fees due to these types of pricing models. NHMC is also concerned that these practices may one day foreclose Latinos and low-income users from bandwidth intensive online opportunities that could significantly improve quality of life, such as high-definition video distance learning, telemedicine, and low-cost video telephony services to stay in touch with family around the world. Former FCC Chairman and current President and CEO of the cable industry trade association, Michael Powell, once admitted that the imposition of data caps, overage fees, and usage-based pricing for wired cable Internet customers is more about making money than 9

14 managing web traffic. 31 Comcast is one of only a handful of cable companies that is experimenting with data caps, overages, and usage-based pricing. In one test, Comcast offers customers 300 gigabytes of data for their home connections with overage fees of $10 per 50 gigabytes. 32 These overage fees can rise to $1 per gigabyte on certain plans. 33 Netflix has estimated that the true cost to providers to transmit 1 gigabyte of data is less than $0.01. Taking that estimate at face value, Comcast s overage fees on its trial plans seem to be quite profitable. 34 While Comcast has claimed that it has no immediate plans to expand these trials or move to a usage-based pricing model, one representative has stated that he expects these usage-based pricing models to be pervasive in the industry within 5 years. 35 By contrast, Time Warner Cable has conducted unsuccessful pilots with usage-based pricing models. 36 In fact, its customers squarely rejected one pilot, similar to a plan that Comcast is currently testing, and it was discontinued Mike Masnick, Cable Industry Finally Admits That Data Caps Have Nothing To Do With Congestion, TECHDIRT (Jan. 23, 2013, available at 32 Ian Paul, Comcast plans to reimpose monthly data caps on all customers within 5 years, PC WORLD (May 15, 2014, available at 33 What XFINITY Internet Data Usage Plans will Comcast be Launching?, COMCAST.COM, (last visited Aug. 25, David Hyman, Why Bandwidth Pricing Is Anti-Competitive, WALL ST. JOURNAL (July 7, 2011, available at 35 See Paul, supra note Stacey Higginbotham, Want to know if your ISP is capping data? Check our updated chart, GIGAOM (Nov. 15, 2013, available at

15 Questions 1. Does Comcast plan to roll out usage-based pricing, data caps, and overage fees to current Time Warner Cable customers within the next 5 years including a possible plan that Time Warner Cable customers have already rejected? 2. What implications does this have for the large portion of Latinos that would be served by the combined company and may only be able to afford one Internet access service? 3. Are data caps, usage based fees and usage-based pricing fair practices that serve the public interest and, more significantly, would this merger pave the way for more widespread use of these practices? IV. INTERNET ESSENTIALS COMCAST S LOW-INCOME PROGRAM NHMC is generally supportive of the Internet Essentials program and is actively working to recruit eligible families to participate. However, according to the most recent Internet Essentials numbers, it appears that nearly 90 percent of eligible households have failed to sign up after 3 years of the program. 38 NHMC has recognized, and shared directly with Comcast, a number of potential barriers that exist within the program that could keep it from being as effective as it should be. Outside of the context of this transaction, NHMC has requested that Comcast commit to: (1 extending Internet Essentials until at least 2016; (2 removing the requirement that subscribers not be enrolled in Comcast in the 90 days prior to adopting Internet Essentials; (3 introducing a marketing and grant program with community-based organizations to reach at least 25 percent of eligible families; (4 providing enrollment data by zip code and schools every quarter so that community-based organizations working to boost Internet Essential adoptions can monitor their 38 Allan Holmes, Comcast-Time Warner deal may hinge on anemic low-cost Internet plan, CTR. FOR PUB. INTEGRITY (May 28, 2014, available at 11

16 progress; (5 expanding eligibility to include all low-income people, with a special focus on people with disabilities, seniors and veterans; (6 increasing support of local and regional digital literacy programs; and (7 providing clear instructions on how users can eliminate bloatware from their Comcast computers. To Comcast s credit, it has acted on some of these suggestions already, by extending the program indefinitely, providing computers free of bloatware, and removing or softening some of the requirements for potential customers. However, barriers still exist and the uptake rate does not seem to be as high as possible. Questions 1. Would the expansion of Internet Essentials to Time Warner Cable subscribers be the public interest benefit that Comcast suggests when current participation rates remain very low? 2. Do additional barriers exist within Internet Essentials that limit its efficacy? V. CUSTOMER SERVICE Unfortunately, cable companies, including Comcast and Time Warner Cable have offered subpar customer service for many years a fact that they often readily admit. This has played out in recent years as cable companies routinely top lists of America s worst companies. 39 Some suggest that a combined Comcast/Time Warner Cable would have little incentive to invest in better customer service. 40 In fact, consumer perception of both companies has taken a significant 39 See Lance Whitney, Cable providers, ISPs rank dead last for customer service, CNET (Aug. 21, 2013, available at 40 See Christopher Zara, Comcast-Time Warner Cable Merger Promises Worst Customer Service Disaster In History, INT L BUS. TIMES (Feb. 17, 2014, available at 12

17 hit since the merger was announced earlier this year. 41 Further, a number of practices and problems have come to light in recent weeks that seem to be, in some ways, the result of cable companies like Comcast simply becoming too large and disparate to manage effectively. 42 Question 1. Would the proposed combination of Comcast and Time Warner Cable serve to improve or exacerbate existing and long-standing customer service issues in this industry? VI. BUSINESS RELATIONSHIPS WITH OTHER MVPDS Some fear that, if this transaction were approved, Comcast would be able to use its extensive collection of entertainment and live sports content 43 to act in an anti-competitive manner towards other cable or pay television providers. According to a letter to the Senate Judiciary Committee, sent by the American Cable Association ( ACA and NTCA: The Rural Broadband Association: In the short run, the merged entity will gain additional competitive advantages over its MVPD competitors, through demanding larger volume discounts than its rivals are able to obtain, thereby weakening the competitive position of these rivals or perhaps driving them out of business entirely. Programmers subject to the enhanced bargaining power of Comcast-TWC will seek to make up for lost revenues either by charging higher prices to other MVPDs or by reducing their investments in programming. In the longer run, Comcast-TWC may be able to 41 See Jack McDuling, People hate Comcast and Time Warner Cable even more now that they re merging, QUARTZ (Mar. 1, 2014, available at 42 See Harold Feld, Is Comcast s Awful Service Grounds For Blocking The TWC Deal? Yes, Actually., TALES OF THE SAUSAGE FACTORY BLOG (Aug. 21, 2014, available at Adrianne Jeffries, Comcast Confessions: growing pains of a Goliath, THE VERGE (Aug. 11, 2014, available at 43 See NBCUniversal, COMCAST.COM, (last visited Aug. 25,

18 leverage its increased dominance in the MVPD industry to increase its market share in the video programming industry. 44 Extracting higher retransmission consent fees from remaining competitors could also help make up for some of the revenue that Comcast/NBCU would lose from no longer being able to collect lucrative retransmission consent fees from Time Warner Cable. 45 Such a practice could lead to increased costs for consumers. Question 1. Would this proposed transaction enable Comcast to leverage its large content library and distribution network to act in an anticompetitive manner towards other cable, pay television, or online video providers especially after any commitments to work with these competitors expire? VII. THE OPEN INTERNET Closing this transaction would mean that Comcast would be one of the only providers of high speed (10+ mbps home broadband to much of the country. This would mean that many edge providers, including creators of bandwidth-heavy applications like streaming video, would rely on Comcast for delivery to much of their audience including about 40 percent of broadband subscribers and many Latinos. Comcast has already demonstrated a desire to ask bandwidth heavy content producers, like Netflix, to pay for sufficient access to its customers. While Comcast is bound by the FCC s previous open Internet rules until 2018, NHMC is concerned with the long-term practices of Internet service providers, particularly ones that act as an intermediary between so many customers and the Internet. 44 John Eggerton, ACA, NTCA Raise Comcast/TWC Issues, Multichannel News (Apr. 9, 2014, available at 45 See John Patrick Pullen, Comcast-Time Warner Cable: The real winners and losers, FORTUNE (Feb. 14, 2014, available at 14

19 Questions 1. What would be the implications of this transaction on the preservation of the Open Internet after commitments to abide by the FCC s 2010 order expire in 2018 or beyond? 2. The Open Internet commitments in the FCC s 2010 order were insufficient insofar as they failed to prevent Netflix and Comcast from entering into an interconnection agreement that improved the transmission of Netflix content. Is this dynamic between edge providers and Internet service providers good or bad for the public and would this acquisition exacerbate these circumstances? VIII. REGIONAL SPORTS NETWORKS Recently, NHMC employees and constituents in Los Angeles, CA have been impacted by a business dispute between Time Warner Cable and other MVPDs over the carriage of Time Warner Cable s regional sports channels, and Los Angeles Dodgers baseball games. Up to 70 percent of pay television subscribers in the Los Angeles area have been unable to view Los Angeles Dodgers games this season. 46 Some have suggested that Time Warner Cable s control over this content, and ownership of the networks that air Dodgers games, has created this situation, as Time Warner Cable is asking competing MVPDs for more than double the rate charged by similar regional sports networks ( RSNs. 47 Some have suggested that this type of pricing power would only get worse if Comcast and Time Warner Cable were able to combine. 48 A combined Comcast and Time Warner Cable would own 16 regional sports networks and would own the rights to air sporting events of a number of professional teams across the country. 49 This means that other MVPDs, including some that may compete with Comcast, would have to negotiate with Comcast for the rights to carry this programming on their systems 46 Todd Shields & David McLaughlin, Dodgers TV Row Fuels Unease Over Comcast-Time Warner Deal, Bloomberg (Aug. 20, 2014, available at 47 Id. 48 Id. 49 See Eggerton, supra note

20 programming that is considered must have by many consumers. Some fear that, by controlling so much sports content, Comcast could harm competitor MVPDs by withholding such content or demanding exorbitant rates. According to ACA and NTCA s letter to the Senate Judiciary Committee, We are concerned that the combination of Comcast s programming assets with TWC s RSNs will allow the merged entity to exercise greater bargaining power against all MVPDs that carry this programming, by bundling more must have programming together. 50 Question 1. Would the completion of this transaction concentrate live sports content and regional sports networks to the point that it would enable Comcast to harm competitors by withholding must-have content or demanding onerous terms for carriage? IX. JOBS According to public data, Comcast has about 136,000 employees while Time Warner Cable has about 34, Comcast has estimated about $1.5 billion in cost savings and other synergies as a result of the transaction. 52 While executives have declined to comment on how many jobs would be lost as a result of the transaction, one rough estimate puts the number at around 5, The loss of any jobs would be a significant problem for NHMC, particularly because both companies employ a relatively high number of Latinos. 50 Id. 51 Sam Ro, Here s The One Sentence That Has Every Comcast And Time Warner Cable Employee Terrified, BUS. INSIDER (Feb. 13, 2014, available at 52 Comcast Application at See Ro, supra note

21 Question 1. Would this proposed transaction lead to significant redundancies and job losses? CONCLUSION Wherefore, NHMC respectfully urges the Commission to ascertain answers to the above listed questions as part of its review of this proposed transaction. Respectfully Submitted, Dated: August 25, 2014 /s/ Michael J. Scurato, Esq. Jessica J. González, Esq. National Hispanic Media Coalition 55 South Grand Avenue Pasadena, CA (