Krugman: Say No To Comcast Acquisition of Time Warner

nbauman writes "In his column, 'Barons of Broadband' New York Times columnist Paul Krugman says: 'Comcast perfectly fits the old notion of monopolists as robber barons, so-called by analogy with medieval warlords who perched in their castles overlooking the Rhine, extracting tolls from all who passed. The Time Warner deal would in effect let Comcast strengthen its fortifications, which has to be a bad idea. Comcast's chief executive says not to worry: "It will not reduce competition in any relevant market because our companies do not overlap or compete with each other. In fact, we do not operate in any of the same ZIP codes." This is, however, transparently disingenuous. The big concern about making Comcast even bigger isn't reduced competition for customers in local markets — for one thing, there's hardly any effective competition at that level anyway. It is that Comcast would have even more power than it already does to dictate terms to the providers of content for its digital pipes — and that its ability to drive tough deals upstream would make it even harder for potential downstream rivals to challenge its local monopolies.'"

Re:Let them merge then split

[Obfuscant]

While this kind of arrangement has finally worked itself out in the telecom divestiture, for a long time it was a big big mess. Especially messy for the consumer who was stuck trying to get problems fixed. "It's the local loop." "It's your long distance provider". "If we come out to fix the wire and it turns out to be your CPE, we'll charge you a large fee for a visit."

And for a very long time it was a real battleground for the long distance carriers (i.e. "content"). Consumers would get called regularly trying to get them to change carriers, and then get "slammed" -- involuntary changes. You'd get a number that started out 10-xxx-... and find out after you called it that you had manually picked a shyster LD company that charged astronomical rates.

Sure, yeah, let's do it all again with cable TV.

Re:Ok

[SQLGuru]

In my area, I can actually opt to have Earthlink as my ISP instead of TWC. Earthlink offers a similar service level using the same lines that TWC laid. If I paid Earthlink for my connection, Earthlink would keep some portion and then pay TWC for use of the lines. That's more or less how deregulated power companies operate.

Re:Ok

[icebike]

Well, in a lot of places they have competition from fiber, and places where they *don't* are places where building out a competitive network is unprofitable. Relinquishing the monopoly on cable would be no big deal.

In vastly more places there is exactly ONE cable plant in the ground. There is no competition.
Further, most municipalities will not allow building out competitive networks, simply because the disruption is so great.
These plants went in when the neighborhood was built, and no late comers will be allowed.

Re:Ok

[cusco]

Enron's market manipulations were enabled by separating production from transmission. If they had been required to sell for Generation Cost + X% (the old rule) there wouldn't have been the rolling blackouts and grotesque pricing.

Re:Let them merge then split

[don.g]

The trick is to have the lines providers wholesale to the retail ISPs/etc, who then provide CPE. If the service doesn't work, the end user's contract is with their retail service provider, who has to sort it out, no matter where the problem is. That's how it works here in New Zealand on our fancy new fibre network that's slowly replacing the old copper phone network. It's mostly how it worked on the old copper network, too.

My ISP (Orcon) provide CPE (a router with voice ports) that plugs into the fibre company's ONT. If the internet or phone doesn't work, it's Orcon's problem. I don't have a contractual relationship with the fibre company so if it's the fibre that's down, it's still Orcon's problem as far as I'm concerned.