An Outrageous Merger

It’s outrageous that AT&T and Time Warner may be permitted to merge.

Of course, there are antitrust issues.

If it’s approved, some competitors will go out of business, others won’t get started, and consumers will pay more and get less.

Antitrust law is not designed to regulate anti-competitive behavior; it is designed to prevent anti-competitive behavior.

Permitting AT&T to acquire Time Warner would be like (with credit to Mason Williams) giving a small boy a ball and then saying, “Now don’t bounce it” – or hiring someone to watch him.

Regulation doesn’t work. What’s called “agency capture” is widespread and well documented. In the BP oil spill case, it involved the regulators literally sleeping with the regulated. Even if an agency isn’t captured it probably doesn’t have enough personnel to do meaningful regulation. The FCC of my day had three employees to respond to 85,000 complaints, and they travelled in pairs.

The only way to prevent anti-competitive corporate behavior is to forbid the mergers that make it possible.

But antitrust law and lawyers often have ways of finding adequate competition when no one else can see it. Moreover, the serious antitrust issues and economic impact of this proposed merger are the least of our concerns.

Mergers of media firms, unlike those in other industries, raise issues involving our democracy, analogous to those associated with the First Amendment.

Some involve politics and governing. Major media owners are more politically powerful than major donors. When a single owner has dominant control of newspapers, radio, television and cable systems within a state or region it can affect elections. When a weapons manufacturer also owns a network, it creates an appearance of possible conflict in its war coverage.

Other issues involve the creative community. Suppose a single corporation owns movie studios, theaters, a TV network, book publishers, newspapers, and other forms of media. It can favor its movies in its theaters, make its authors guests on its TV shows, and advertise all its products in its newspapers.

Both AT&T and Time Warner are among the world’s largest corporations. Time Warner’s HBO and Cinemax programming is sold in 150 countries, its Turner programs in 200. AT&T is the largest telecommunications company in the world, also in 200 countries. Both are holding companies, conglomerates, that together own dozens of corporations. Many are known to you, like CNN, HBO, or DirectTV. Check their corporate Web pages for more.

Worst of all, and what ought to absolutely preclude this merger, they will represent a gigantic combination of programming and delivery (“content and conduit”) -– the ultimate choke-hold on the distribution of a diversity of content.

The AT&T of old only provided distribution, the conduit. Everyone was entitled to a phone. And once you got one, you could send any ideas you wanted into that phone and through AT&T’s lines. Other institutions might come after you for disclosing national security secrets, fraudulent marketing, or defamation, but not AT&T.

There was a legal “right of entry” into the old AT&T network. No longer. There will be no legal rights for America’s creators of content. Nor will there be a financial incentive for AT&T to carry their content.

From any perspective, it would be outrageous for regulators to approve this merger.
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Nicholas Johnson, a former FCC commissioner (1966-73), played a significant role in frustrating ITT’s efforts to acquire ABC. Blog: FromDC2Iowa.blogspot.com Contact: mailbox@nicholasjohnson.com

Note: This blog essay was published online by OpEdNews, October 26, 2016.

# # #

Breaking Through Power: The Media

Harnessing Progressive Reform to 21st Century Media

Nicholas Johnson
May 24, 2016

Ralph Nader’s “Breaking Through Power Conference”
Day 2, “Breaking Through the Media”
Washington, D.C., May 23-26, 2016
Video of the 20-minute presentation of these remarks can be found here, with many thanks for the efforts of Gregory Johnson's ResourcesForLife.com. YouTube videos of Day 1, Day 2, Day 3, and Day 4 are also available. Here is the Web page providing information about the Conference program and speakers, and Ralph Nader's Web page.

My name is Nicholas Johnson, and I'm not running for anything.

What you see here is my old FCC uniform.

I would have come with the long hair, shaggy beard, and cowboy mustache, but there wasn't time to grow them back.

So I settled on this Bernie Sanders haircut instead.

Having known and worked with Ralph and his family for the past half-century, it is a great pleasure to be able to share this commemorating conference with him, you, and The Real News Network audience.

He’s asked that I say something about the origins and values of American broadcast regulation, the demise of that system, and the past efforts of media reformers – to which I will add some thoughts on the options open to us in this 21st Century.

Because I am used to speaking for entire semesters at a time, my challenge this morning is putting all of this into my allotted 20 minutes.

Here goes.

“Long ago in a galaxy far away,” while European countries were choosing government ownership of things like railroads and telephone systems, Americans chose private ownership – modestly restrained by government regulation.

And so it was with broadcasting.

Most countries went the way of the BBC – ultimately a non-profit, public corporation.

Its first leader, Lord Reith, set the BBC’s public service standard: programming representing “all that is best in every department of human knowledge, endeavor and achievement.” He created the equivalent of our Fairness Doctrine, and a BBC as independent of commerce as of government – funding would come directly from listeners’ fees. Japan’s NHK, Sweden’s Sveriges Radio, and other countries followed this model.

Today's Corporation for Public Broadcasting is the American version.

In the 1920s, as the sale of radio receivers accelerated to 100 million, so did the number of stations increase. Their signals’ interference made intelligible reception difficult to impossible. As has so often been the case, it was the broadcasters who came to the government for regulatory relief. Government licensing was seen as a solution to chaos.

Of course, an added benefit was the elimination of competition.

Then Secretary of Commerce Herbert Hoover responded to their request by calling a series of Radio Conferences. From them came the recommendations that ultimately became the Radio Act of 1927 and the Communications Act of 1934.

It was the usual American compromise between the ideology of private ownership and the pragmatism of regulation through licensing. But the values at the foundation of the Act, shared by broadcasters, government and public alike, were very similar to those of Lord Reith.

Lord Reith’s “public service” standard became the Commission’s standard for the granting, renewal, or revocation of licenses – that radio programming serve “the public interest.”

Even broadcasters tended to agree with Secretary Hoover’s comment, echoing Lord Reith’s judgment, when Hoover said: "It is inconceivable that we should allow so great a possibility for service [for news, entertainment, and education] to be drowned in advertising chatter." [at n. 17]

Lord Reith’s preference for public over private ownership was reflected in the House floor debate about the Act. As Congressman Luther Johnson warned his colleagues, “American thought and . . . politics will be . . . at the mercy of those who operate these stations. . . . [If] placed in the hands of . . . a single selfish group . . . then woe be to those who dare to differ with them.” [at n. 31]

Ultimately, the language of the Act began, “It is the purpose of this Act . . . to maintain the control of the United States over all the channels of radio transmission; and to provide for the use of such channels, but not the ownership thereof . . ..”

Without an FCC license a studio, transmitter, and antenna tower had little more than scrap value. With that license they were worth millions.

Moreover, the FCC told the licensee where it could build, set its minimum and maximum hours of operation, its transmitter’s power, and direction of its signal. There were limits on how many licenses one could hold, maximums on advertising, and required minimums of educational and cultural programming, news, public affairs, and public service announcements. The Commission’s 1946 “Blue Book” provided even greater detail.

Thus, FCC licensees were owners in name only – with little more discretion than government employees or contractors might have when using the public’s airwaves; sort of like fast food or motel franchisees.

When I arrived at the Commission a half-century ago, the FCC was supposedly still regulating broadcasters according to standards at least similar to those in the 1920s and 1930s.

But in Washington, like most industries, broadcasting had its own sub-government [pp. 16-19, nn. 49-59] – dominant corporations, their lobbyists, a trade association, trade press, eating club, agency employees, legislators, their staff, and a bar association for communication lawyers – all of whose futures and fortunes turned on successfully protecting their circled wagons.

Moreover, the money in this politics flowed upstream. Other industries had to pay to play [pp. 19-24, nn. 60-67]; they gave so-called campaign contributions to seek favor with elected officials. The reverse was true for the broadcasting industry. Elected officials gave most of their campaign contributions to the broadcasters! And the time and attention the broadcasters were selling to politicians was something they could also give for free.

So if the broadcasters were not successful in winning over the FCC’s commissioners and staff with private chats, free meals, receptions, golfing outings, and the prospects of future employment, they could always get what they wanted, or prevent what they feared, by going to their friends on Capitol Hill.

As a result, I discovered, no matter how outrageous a broadcaster’s performance might have been, the likelihood of a license not being renewed was so rare as to be indistinguishable from “never.” Rules were adopted, and then waived. Congressman Luther Johnson’s warnings about private power had been long since forgotten, as merger after merger was approved.

That, and more, was what motivated me to write some 400 separate opinions during my term. Charged with unfairly picking only the worst cases, I co-authored a Yale Law Journal article titled, courtesy of the Beatles, “A Day in the Life.” In it we itemized an entire week’s agenda, selected at random, and demonstrated how every decision that week left much to be desired.

My term coincided with a citizen activist period in American history – Ralph’s “Nader’s Raiders” consumer organizing, anti-war groups’ protests, civil rights legislation, Black Power demands, the women’s movement, protest songs, and “The Smothers Brothers Comedy Hour.”

In such times it was inevitable that failures of the media, as well as the Commission and the Congress, would ultimately lead to the creation of a media reform movement as well. As I put it at the time to anyone who would listen, “Whatever is your first priority, your second priority must be media reform.”

It took a variety of forms. Al Kramer’s Citizens Communications Center provided the legal support for hundreds of media reform groups in communities across the country. Stations’ license renewals were challenged for failure to serve their local communities, or discriminatory employment practices. Some groups wanted to save classical music stations. Others created community, or even illegal pirate radio stations.

Video portapaks, the predecessor of today’s ubiquitous smartphone video, led to the interest in video art, guerrilla television, video activism and what became cable television’s public access channels.

Foundations and donors were willing to provide at least minimal financial support for these efforts. And because the uprising had kind of caught the media establishment off guard, there were a few years of media reform Camelot.

Following this, as at least some of you have lived through, the swamp waters returned. Many in the establishment made a sharp right turn to follow Grover Norquist. As he put it, “I'm not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub."

Drown it they did.

At the FCC this took the form of what was variously called “re-regulation” or more accurately “de-regulation.” License terms were lengthened. Restrictions on maximum station ownership were reduced to the point of non-existence. The Commission would not even acknowledge that a license renewal challenge had been filed, let alone address it. Seldom if ever did a merger fail to meet the commissioners' definition of “the public interest.”

As the fickle foundations focused on a new squirrel and lost interest, media reform organizations lost their funding. The courts lost their appeal. The Congress and Commission lost their sense of hearing.

Which brings us to this day in May of 2016.

What are we to make of the Tea Party, Occupy movement, and the millions of aware and angry Americans following Donald Trump and Bernie Sanders? Are we on the cusp of another burst of media reform revolution, enthusiasm and possibility?

Using the name of our day at this four-day conference, what can we do to “break through the media”?

It would be nice if we could wrap up today with an easily-remembered list of “five things you can do to improve the media!” But it’s not so simple. There are even more than five categories of things progressive activists can do before we start listing specific tasks – let alone trying to reinvigorate the FCC.

Here are a few, with illustrative examples.

Destination. Let’s start with the obvious. What’s your goal? How would you know if you or your organization were ever “successful”? As the old line has it, “If you don’t know where you’re going the odds are very slim you’ll ever get there.”

In what specific ways do you wish “the media” were different – and why? Are you trying to increase contributions, or members, for your local organization, and think positive column inches in the paper will help? Or are you trying to improve our political campaigns and the public officials they produce? And your goal is to raise the entire American electorate’s interest in articles and programming about the daily diet of policy wonks.

Opportunity. The lack of a legal right does not remove all opportunity. The Supreme Court has given media owners legal control of content. [at n. 24] But as we’ve recently observed, one can even win the presidential nomination of a major American political party without paying for broadcast time or newspaper space.

Progressive causes do not always do all they could to promote their efforts with public radio and television.

Even commercial media offer us opportunities with op ed columns and letters to the editor in newspapers, guest appearances on television, calls to radio talk shows, developing relationships with editors, producers, journalists and on-air personalities, making use of free kiosks, store windows, and bulletin boards.

Education. There’s something to be said for the suggestion, “if you really want to improve the quality of American media, start by spending more public money on K-12 and higher education” – specifically, in our case, on media literacy. If the media consumer can’t tell the difference between the junk news in ABC’s evening program and the truly significant there’s little more we can do.

Media. What do we mean by “media”? From the 1920s through the 1960s CBS and NBC were the dominant networks. ABC was said to make it only “a two-and-a-half network economy.” Media reformers wanted more diversity. Well, we got it – hundreds of cable channels, thousands of smart phone apps, billions of Internet users and Web pages, Facebook and Twitter accounts.

The new social media have proven their worth to reformers, from the Arab Spring to the 2016 presidential campaign, and offer constantly evolving applications to all of us.

They've also required a re-definition of “journalist” – should it include everybody with a Web page, blog, email list, Facebook, YouTube or Twitter account?

Even more significant is that this increased diversity and quantity of communication brought with it a demise of the wealthy newspapers that formerly provided the electronic media with content.

TV no longer offers a 21st Century version of your grandparents’ Walter Cronkite, the most trusted American. It no longer provides a huge swath of the citizenry a shared body of consensus-building quality journalism each evening.

And the resulting political polarization has paralyzed the Congress and prevented compromise. According to a recent TED talk, it’s even reprogrammed our brains.

Alternatives. Are foundations and nonprofits a part of the answer? The Iowa Center for Public Affairs Journalism is filling some of the void in my home state. Created and run by Lyle Muller, a quality former editor of a major Iowa paper, Iowa Watch is making investigative pieces available to Iowa papers.

What can we do to encourage our fellow citizens to include within their volunteer activities the possibility of studying, following, and then writing up the work of local institutions no longer covered by a beat reporter – say, a zoning board, county government, local hospital, major corporation, or university?

Regulation. It’s unlikely we’ll soon return to the micromanaging regulation of broadcasters of the 1920s through 1950s.

Nor would it make as much difference today as it did then were we to do so. An increasing source of Americans’ audio and video consumption today comes via the Internet, from Web pages, podcasts, YouTube, Netflix, Amazon, and independent cable programming producers. But that doesn't mean the old media are devoid of influence.

The FCC and Congress are still potential forces worth encouraging to support our efforts – as we've attempted, for example, with maintaining Network Neutrality.

What we do to use and strengthen the Freedom of Information Act, or whistle-blower protections, are also a form of government support of journalism.

I might even offer what Donald Trump would call “suggestions” that we consider reinstating a modified Fairness Doctrine – at least as a shared value – and conceptualize an antitrust principle regarding media mergers that goes beyond the economic marketplace to the “marketplace of ideas.”

Pressure. Even without the force of government, pressure from private “regulation” of a sort can have its impact.

Here are five examples.

(1) So far as I know the only time the levels of TV violence were reduced was as a result of the 1970s efforts by the National Citizens Committee for Broadcasting to identify and publicize the advertisers supporting the most violent programs.

(2) Project Censored reveals annually the ten most significant stories that failed to receive adequate presentation by mainstream media. FAIR and the journalism reviews provide continual oversight of media performance.

(3) For 41 years the Minnesota News Council received and publicized citizens’ grievances regarding the media.

(4) The academy can contribute much more than it has in terms of professors’ scholarship, seminars, and doctoral dissertations. More of our 15,000 school districts could give their students the tools of media literacy.

(5) And of course we'll all want to join Ralph's latest venture in breaking through media power, called simply “Voices.”

There’s much more to say, but no more time to say it. So I thank you for your attention, and very much look forward to the rest of the presentations at this historic conference.

# # #

Comcasting for Dollars

March 8, 2014, 12:30 p.m.

Like to join over 150,000 people -- on its way to 200,000 -- who are protesting this merger? Click here for information: http://www.credomobilize.com/petitions/help-me-stop-the-comcast-time-warner-merger-2
Why You Need to Care

A company called "Comcast" wants to acquire, and merge with, one called "Time Warner Cable." [Photo source: Comcast.]

Why should you care? Because of this merger's impact on our nation in general, and on you and your children's online life in particular.

Executive Summary
America's Internet and cable access services are already in bad shape, and this proposed $45 billion merger will make them worse, not better. The provision of access to Internet and cable television networks ought to be, like the interstate highway system, a part of the basic, public infrastructure of this country -- as it is in countries with far better Internet service than what we have. Since America refuses to go down that path, a provider of Internet and cable access should at least be perceived and regulated as the common carrier public utility it is -- with a prohibition on common ownership of the content we want and the conduit through which it comes -- like the former AT&T network. But America has a reluctance to learn from the wisdom of other nations. That is why we have not joined the near-unanimous major nations that provide their citizens with universal single-payer healthcare. We are quite willing to pay more while getting less in order to avoid having to modify our ideology. So it is highly likely that, for the immediate future, we will continue to pay more and get less for our cable and Internet access as well.

The merger will only provide incentives for more mergers, provide the merged company with more monopoly power to raise rates while simultaneously requiring less investment in innovation and the kind of more, better and cheaper broadband service available to the citizens of other countries (thereby leaving us lagging even further behind our global competitors) -- while making Comcast the sole source for business' broadband access in 19 of our 20 largest metropolitan areas; create a presence in more congressional districts, thereby increasing its political power, along with even more money to spend on campaign contributions and lobbying. It is a bad deal for America, for Iowa families, for entrepreneurs and the creative community, and even -- as some of the analyses below point out -- for investors in these two companies.

The History and Rationale for Regulating Common Carriers
For starters, any companies that provide services as essential as connection to the Internet (and cable television programming), whose excesses are restrained by neither vigorous marketplace competition nor effective regulation, ought to be treated as common carrier public utilities. No matter how the conflicting views of this merger are ultimately resolved, we are "starting off backing up," with our hopes limited to the possibility we can figure out "how to do the wrong things better" (as John Carver has characterized most efforts to reform school board governance; Nicholas Johnson, "Board Governance: Theory and Practice").

To understand why this is so, and what this merger is really all about, we need a little background.

Historically, there have been some industries and companies thought to be so important, and potentially dangerous, that many countries required that they be owned and operated by the government -- with regard to communications, an agency often called a "Postal, Telegraph and Telephone Service," or "PTT." Our preferred compromise (between government ownership-operation on the one hand, and unregulated private ownership-operation on the other) was to permit private ownership, but subject the firms to regulation of everything from their rate of return on investment to the quality of their customer service.

Such companies usually had two qualities. (1) They provided what many would consider to be "essential services." (2) Because they were often natural monopolies, their prices and quality of service were not controlled by a competitive free market.

For example, railroads are an essential service for manufacturers who want to ship their products to customers and retail outlets. And the cost of creating and maintaining track, locomotives and rolling stock make it economically infeasible to have two or more railroad companies serving the same route.

President Theodore Roosevelt explained, "The Government must in increasing degree supervise and regulate the workings of the railways engaged in interstate commerce. [It] is the only alternative to an increase of the present evils on the one hand or a still more radical policy on the other. Above all else, we must strive to keep the highways of commerce open to all on equal terms; and to do this it is necessary to put a complete stop to all rebates." See "Railroad Regulation" in "Presidency of Theodore Roosevelt," Wikipedia.org.

Iowa farmers, and their representatives -- especially Iowa's U.S. Senator William Allison -- played a major role in the legislation that followed, including the Elkins Act of 1903 and Hepburn Act of 1906. Those laws gave the Interstate Commerce Commission (ICC) the power to examine the railroads' financial records, set their rates, and eliminated the preferences they gave to some shippers. Ibid. [Photo Source: bioguide.congress.gov.]

Such companies are called public utilities, or common carriers.

The Civil Aeronautics Board, from its inception in 1938 until its abolition in 1985, did for another form of transportation, the airline industry, what the ICC did for railroads. Water is supplied to most American homes by a municipally-owned agency or regulated public utility. Electricity and natural gas companies are regulated monopolies. Our original effort to create a nationwide telephone "universal service," using the monopoly AT&T, was regulated as a public utility. A similar commitment to another form of "universal service" to benefit every American took the form of our national Postal Service.

By every rational, historical, legal, and economic analysis the monopolists providing Internet access and cable television (often "bundled" with phone service as well) should be conceived of, and regulated as, common carrier public utilities. (a) Internet access, and to a somewhat lesser degree, cable television, are as essential to Americans in the early 21st Century as electricity and telephone service were to those in the early 20th Century. (b) And they are similarly monopolistic -- unconstrained in price setting and truly lousy customer service by either the forces of a truly competitive market or effective regulation.

Indeed, it is the consumer satisfaction indices that tell the tale. The industry with the absolute lowest level of consumer satisfaction? Cable television. And not insignificant with regard to this proposed merger, who is at the bottom -- not near the bottom, or among those at the bottom -- but at the very bottom of the list of cable companies for consumer satisfaction? Comcast and Time Warner Cable.

There is little or no justification for permitting any cable companies to merge. But if just one merger was to be approved, why on earth would one select and reward the two worst companies in the industry by permitting them to merge? See Adam Pasick, "A Comcast-Time Warner Cable Deal Would Combine Two of America's Most-Reviled Companies," Quartz, Feb. 13, 2014 (the 2013 rankings of Internet service providers in the American Customer Service Index ranged, for the top five, from 64 to 71; Comcast, at 62, was at the very bottom, and Time Warner Cable was immediately above it, at 63).

Maintaining a Separation of Content and Conduit
There is another problem that will persist no matter how the requested merger is resolved. Those providing our path to cable television and Internet content will also own some of that content, which they can favor in various ways over the content of their competitors. This creates a potential for enormous innovative mischief, destroys a fully competitive marketplace, is unfair to their competitors, and harms consumers in a variety of ways.

Why is this so? Once again, we need a little background.

One of the reasons for the antitrust law's restrictions on mergers is that it makes more sense to avoid the circumstances that breed anti-competitive practices than to permit the creation of those circumstances, and then try to regulate powerful industry players with an administrative agency's oversight of their every move. This is not rocket science. It is no more than one of many practical applications of the centuries-old maxim, "an ounce of prevention is worth a pound of cure." Benjamin Franklin, "Old Citizen," Pennsylvania Gazette, Feb. 4, 1735. [Photo source: commons.wikimedia.org.]

Prevention of corporate abuse (as by forbidding the mergers that make it possible) is simply more effective, cheaper for taxpayers, better serves consumers, is fairer for competitors, and produces a healthier economy than any alternative.

And so it is with "the separation of content and conduit."

The one-time telephone monopoly, AT&T (1875-1984), was the occasional butt of jokes. Lilly Tomlin's routine, as the AT&T spokesperson "Ernestine," was one of the best known. In response to customer complaints, she finally concludes, "We don't care. We don't have to. We're the Phone Company." "The Phone Company," Saturday Night Live Transcripts, Season 2, Episode 1, 76a, Sept. 18, 1976.

But none of the complaints about AT&T, whether serious or dressed in humor, at least so far as I recall, ever involved the company's preferences of some customers over others, or a control of the content of their conversations. I don't believe the American Civil Liberties Union ever had to sue AT&T for its restraints on the content of customers' conversations. Law enforcement agencies might care if you used your phone for harassing or stalking someone, the fraudulent promotion of a stock, sale of an illegal substance, or the disclosure of classified information. However, so far as AT&T was concerned, you were (with possibly insignificant exceptions) free to speak to anyone you wished, for as long as you wished, about anything you wished -- for a flat monthly fee.

AT&T just provided the conduit -- including the twisted pair of wires that carried those voice conversations into your home and ultimately your black telephone. Everyone who wanted a phone was entitled to have a phone. Everyone's calls moved through the network at the same speed. (And, not incidentally, the service for local calls was cheap -- about $2.00 or $3.00 a month as I remember from my youth. "Universal service" not only provided everyone a phone, it also subsidized the cost of that local phone service with the prices charged for business phones and "long distance" calls.)

There was, in short, a total separation of "content" (what was said) from "conduit" (the ownership and operation of the network of cables and switches).

Just as it was explained above, "by every rational, historical, legal, and economic analysis the monopolists providing Internet access and cable television [should be considered, and regulated as, common carriers]," so too (and for similar reasons) should they have the same separation of content and conduit as the old AT&T.

Why? Because in a business of offering access to cable programming, or the Internet's vast content, there are thousands of potential unfair competitive advantages available to the company that owns both the programming and the wires (or towers) through which it travels. It can slow download speeds for its competitors' programming, or degrade the signal quality. It can block customers' access to some sites entirely. It can exact extra payment from its competitors in exchange for a slight improvement in its customers' access to competitors' programming. The opportunities are endless.

So to what extent is Comcast in the programming business? Here's the list that freepress.net put together:

Company Overview. In 2011, the Federal Communications Commission approved Comcast’s takeover of a majority share of NBCUniversal from General Electric. This merger combines the nation's largest cable company and residential Internet service provider and one of the world's biggest producers of TV shows and motion pictures. Comcast’s media holdings now reach almost every home in America. It serves customers in 39 states and the District of Columbia. In addition to its vast NBCUniversal holdings, Comcast has 23.6 million cable subscribers, 18 million digital cable subscribers, 15.9 million high-speed Internet customers and 7.6 million voice customers. Comcast recently entered into a partnership with Verizon in which each company will market and sell the other's services.

TV: NBCUniversal; twenty-four television stations and the NBC television network; Telemundo; USA Network; SyFy; CNBC; MSNBC; Bravo; Oxygen; Chiller; CNBC World; E!; the Golf Channel; Sleuth; mun2; Universal HD; VERSUS; Style; G4; Comcast SportsNet (Philadelphia), Comcast SportsNet Mid-Atlantic (Baltimore/Washington, D.C.), Cable Sports Southeast, Comcast SportsNet Chicago, MountainWest Sports Network, Comcast SportsNet California (Sacramento), Comcast SportsNet New England (Boston), Comcast SportsNet Northwest (Portland, Ore.), Comcast Sports Southwest (Houston), Comcast SportsNet Bay Area (San Francisco), New England Cable News (Boston), Comcast Network Philadelphia, Comcast Network Mid-Atlantic (Baltimore/Washington, D.C.); the Weather Channel (25 percent stake); A&E (16 percent stake); the History Channel (16 percent stake); the Biography Channel (16 percent stake); Lifetime (16 percent stake); the Crime and Investigation Channel (16 percent stake); Pittsburgh Cable News Channel (30 percent stake); FEARnet (31 percent stake); PBS KIDS Sprout (40 percent stake); TV One (34 percent stake); Houston Regional Sports Network (23 percent stake); SportsNet New York (8 percent stake)

Online Holdings: MSNBC.com (50 percent stake); Hulu (32 percent stake); DailyCandy; iVillage; Fandango

Telecom: Clearwire Communications (9 percent stake)

Other: Comcast Interactive Media; Plaxo; Universal Studios Hollywood; Wet 'n Wild theme park; Universal Studios Florida; Universal Islands of Adventure; Philadelphia 76ers; Philadelphia Flyers; Wells Fargo Center; iN DEMAND; Music Choice (12 percent stake); SpectrumCo (64 percent stake)

One would think those holdings sufficient to satisfy even the most aggressive investor's wildest dreams of avarice. Why would Comcast also need to own, set the standards, operate, and profit from the pipe that delivers that content, along with that of its competitors, to roughly one-third of all American homes?

But that's not all
So far we have only addressed the problems inherent in the pre-merger marketplace -- the failure to prevent Comcast and Time Warner Cable from becoming as big as each already is, the failure to treat both as common carrier public utilities, and the failure to insist that they make a choice between operating the conduit or providing the programming, rather than permitting them to do both.

We now proceed to our equivalent of the question put to Mrs. Lincoln after her husband was assassinated in the Ford Theater: "Apart from that Mrs. Lincoln, how did you enjoy the play?" (the line is attributed to Tom Lehrer). That is, apart from the fact that consumers and competitors are going to continue to be abused by these companies regardless of how the merger is resolved, how might this merger make matters even worse?

As Elizabeth Barrett Browning said when asked about this merger, "Let me count the ways."

"[C]ompanies are profit-driven, and . . . work toward the specific incentive of making more money. . . . This . . . does not bode well for consumers . . .. [They would] merge control of about a third of the country's cable customers into one company. Customers are already stuck paying whatever these companies decide . . . where they are the only option for cable. [They do not compete] in any of the same zip codes across the country. In addition, these two companies have placed at the absolute bottom of customer service quality lists for years. Putting them together does not suggest an improvement . . .." Karl Avard, "Time Warner-Comcast Merger: A Bad Move for Both Companies," The Motley Fool, Feb. 21, 2014.

The Motley Fool?! Yes, that's right. This story is designed for investors, not cable subscribers. If you care, it's Avard's judgment that this merger isn't so great for investors either: "this merger will ultimately be bad for the business and stock prices of both Comcast and Time Warner Cable because it will mark the tipping point for consumers to start 'cord-cutting.'" Never mind what's meant by "cord-cutting." The point is that this merger is not only bad for consumers, it's even bad for investors according to this investment advisory source.

So The Motley Fool doesn't think much of this deal. Surely somebody in the business community likes it. Right? How about Bloomberg?

Oh my, here's what Bloomberg published: Susan Crawford, "Comcast's Time Warner Deal Is Bad for America," Bloomberg View, Feb. 13, 2014. [Photo credit: Benjamin N. Cardozo School of Law, Yeshiva University.]

So why does Bloomberg feel obliged to let its readers know that this merger "Is Bad for America"? Here are some excerpts from Ms. Crawford's piece:

David Cohen, Comcast Corp.'s executive vice president and the mastermind behind its deal to buy Time Warner Cable Inc., . . . had to acknowledge that the public might be worried about the power of this combination. "It may sound scary," he said.

Indeed it does. . . . Ninety-one percent of Americans who subscribe to data services also buy video services, so the relevant market for them is the bundle. When it comes to bundles, satellite companies Dish Network Corp. and DIRECTV can't offer the data capacity that Comcast can . . ..

[F]or the vast majority of businesses in 19 of the 20 largest metropolitan areas in the country, their only choice for a high-capacity wired connection will be Comcast. Comcast, in turn, has its own built-in conflicts of interest: It will be serving the interests of its shareholders by keeping investments in its network as low as possible -- in particular, making no move to provide the world-class fiber-optic connections that are now standard and cheap in other countries -- and extracting as much rent as it can . . ..

For a country attempting to compete on the global stage, this is a problem. It's time to recognize that industrial policy -- true leadership, the kinds of initiatives that brought us the federal highway system and national electrification -- is called for. If regulating these guys is too difficult, let's allow mayors to build alternative fiber-optic networks such as the one in Chattanooga, Tennessee, that has lured businesses and spurred economic growth. We can't allow our future to be captured by the short-term cash flow desires of Comcast's investors. . . .

Cohen . . . [points] out that these two companies don't compete in a single ZIP code in America. That's because they long ago clustered their operations and divided markets . . ..

The Department of Justice . . . can't create competition where none exists. It can't mandate that all U.S. businesses have world-class, inexpensive fiber-optic connections. But the Federal Communications Commission and the executive branch can. . . .

We're all the people of Fort Lee, New Jersey, trying to get on the George Washington Bridge. There's a bully narrowing our access to the world whose interests aren't aligned with ours. . . . Let's be clear: This is old-school monopolistic behavior. . . .

High-speed wired connections are now infrastructure, just like bridges, roads, and water. We [must ensure] that American businesses aren't forced to pay whatever tribute Comcast demands in order to thrive.

As she noted earlier for Bloomberg, "cable is a business that relies on scale; the game is to increase the number of subscribers and lower all possible costs, then grind away with one price increase after another. And when big operators get bigger, their scale grows." Susan Crawford, "Time Warner Cable Sale Will Cost Us All," Bloomberg View, Jan. 27, 2014.

The Business section of Time isn't any more sanguine about this deal. It quotes John Bergmayer of Public Knowledge, "An enlarged Comcast would be the bully in the schoolyard, able to dictate terms to content creators, Internet companies, other communications networks . . . and distributors who must access its content [which would] raise costs for consumers, who ultimately pay the bill." Its story notes that "Comcast already owns NBCUniversal, one of the giants of American media and entertainment . . . [and that the merger] will mean fewer competitive incentives to invest in network infrastructure, and will likely lead to higher prices and less innovation." Sam Gustin, "Massive Cable Deal Means Your Bill May Jump," Technology & Media, Business & Money, Time, Feb. 14, 2014.

Not surprisingly, these sentiments were shared over on the Huffington Post. Mark Gongloff, "Comcast, Time Warner Cable Deal Is A Disaster for Consumers," Huffington Post, Feb. 20, 2014. Here are excerpts:

They say two wrongs don't make a right, and consumers are about to get proof of that with the merger of Comcast and Time Warner Cable.

The $45 billion merger announced Thursday . . . will be no victory for their combined 30 million customers, who are already among the least-happy customers in all of Corporate America.

The two companies last year were the lowest-scoring cable companies in the American Customer Satisfaction Index, mainly because of the weakness of their customer service. That made them the least-loved companies in one of the least-loved industries for customer satisfaction. The only two industries with worse customer-satisfaction ratings, according to Consumerist, are newspapers and internet providers. By the way, Comcast and Time Warner Cable are also internet providers.

Little wonder, then, that the two companies were near the top of Consumerist's Worst Company In America contest last year . . .. Comcast . . . took home the title of Worst Company in 2010 . . ..

The history of mergers suggests customer service might only get worse for these two companies. Coupling companies typically struggle to knit together their massive systems, and customers get lost in the process. When Comcast bought AT&T Broadband for $50 billion in 2002, customer billing problems led to such a backlash that the company ultimately launched a "Think Customer First" training program.

A BusinessWeek study of 28 mergers between 1997 and 2002 found that customer-satisfaction ratings dropped significantly after the unions, with the effect lasting for years. Cable companies suffered some of the biggest drops in that study.. . .

"So much can go wrong — computer integration snafus, recordkeeping glitches, you name it," Cahill [Joe Cahill of Crain's Chicago Business] wrote, "and almost all of it affects customers." . . .

[C]ompanies scramble to keep customers from fleeing. But after a long history of industry consolidation, Comcast and Time Warner Cable have so little competition that their customers might have nowhere to flee.

So that's how I see this potential merger.

As I began, . . .
Things are already bad, and this proposed merger will make them worse, not better. The provision of access to Internet and cable television networks ought to be, like the interstate highway system, a part of the basic, public infrastructure of this country -- as it is in countries with far better Internet service than what we have. Since America refuses to go down that path, a provider of Internet and cable access should at least be perceived and regulated as the common carrier public utility it is -- with a prohibition on common ownership of the content we want and the conduit through which it comes -- like the former AT&T network. But America has a reluctance to learn from the wisdom of other nations. That is why we have not joined the near-unanimous major nations that provide their citizens with universal single-payer healthcare. We are quite willing to pay more while getting less in order to avoid having to modify our ideology. So it is highly likely that, for the immediate future, we will also be paying more and getting less for our cable and Internet access as well.

The merger will only provide incentives for more mergers; provide the merged company with more monopoly power to raise rates while simultaneously requiring less investment in innovation and the kind of more, better and cheaper broadband service available to the citizens of other countries (thereby leaving us lagging even further behind our global competitors) -- while making Comcast the sole source for business' broadband access in 19 of our 20 largest metropolitan areas; create a presence in more congressional districts, thereby increasing its political power, along with even more money to spend on campaign contributions and lobbying. It is a bad deal for America, for Iowa families, for entrepreneurs and the creative community, and even -- as some of the analyses above point out -- for investors in these two companies.

If you'd like to join over 150,000 people -- on their way to 200,000 -- who are protesting this merger, click here for information: http://www.credomobilize.com/petitions/help-me-stop-the-comcast-time-warner-merger-2



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