Comcast tells us how much better our lives will be after they acquire Time Warner. Great, thanks! Perhaps this is an opportunity to look at other ways that we can “acquire” Cable TV and Internet access.
“Transaction Creates Multiple Pro-Consumer and Pro-Competitive Benefits…”
Don’t read the full legal verbiage that purports to explain the maneuver. A more productive use of your time will be had by reading Counternotion’s pointed summary in Obfuscation by disclosure: a lawyerly design pattern:
(tl;dr: According to Comcast, the merger is “pro-sumer” if you “get past some of the hysteria,” it’s “approvable” by the regulators and won’t “reduce consumer choice at all”. Will it raise prices? “not promising that they will go down or even that they will increase less rapidly.” Given the historical record of the industry, it’s Comedy Central material.)
Let’s not loiter around Comcast’s lobbying operations, either — the $18.8M spent in 2013, the pictures of Mr. Roberts golfing with our President, the well-oiled revolving door between the FCC and the businesses they regulate. Feelings of powerlessness and anger may ensue, as trenchantly expressed in this lament from a former FCC Commissioner.
Instead, let’s use our agitation as an opportunity to rethink what we really want from Cable carriers. The wish list is long: TV à la carte instead of today’s stupid bundles, real cable competition vs. de facto local monopolies, metered Internet access in exchange for neutrality and lower prices for lighter usage, decent set-top boxes, 21st century cable modems, and, of course, lower prices.
These are all valid desires, but if there were just one thing that we could change about the carrier business, what would it be? What would really make a big, meaningful difference to our daily use of TV and the Internet?
Do you remember the Carterfone Decision? For a century (telephone service started in the US in 1877), AT&T reigned supreme in telecommunications networking. (I should say the former AT&T, not today’s company rebuilt from old body parts.) The company owned everything along its path, all the way down to your telephone handset — only MaBell’s could be used.
Then, in the late fifties, a company called Carterfone began to sell two-way radios that could be hooked up to a telephone. The device was invented by a Texan named Thomas Carter as a clumsy but clever way to allow oil field owners and managers sitting in their offices in Dallas to reach their workers out at the pumps.
AT&T was not amused.
“[AT&T] advised their subscribers that the Carterfone, when used in conjunction with the subscriber’s telephone, is a prohibited interconnecting device, the use of which would subject the user to the penalties provided in the tariff…”
Carterfone brought an antitrust suit against AT&T… and won. With its decision in favor of Thomas Carter’s company, the Federal Communications Commission got us to a new era where any device meeting the appropriate technical standards could connect to the phone network.
“…we hold, as did the examiner, that application of the tariff to bar the Carterfone in the future would be unreasonable and unduly discriminatory.”
The regulator — an impartial representative, in an ideal world — decides what can connect to the network. It’s not a decision that’s left to the phone company.
Back in the 21st century, we need a Carterfone Decision for cable boxes and modems. We need a set of rules that would allow Microsoft, Google, Roku, Samsung, Amazon, Apple — and companies that are yet to be founded — to provide true alternatives to Comcast’s set-top boxes.
Today, you have a cable modem that’s so dumb it forces you to restart everything in a particular sequence after a power outage. You have a WiFi base station stashed in among the wires. Your set-top box looks like it was made in the former Soviet Union (a fortuitous product introduction days before the merger announcement doesn’t improve things, much). You have to find your TV’s remote in order to switch between broadcast TV, your game console, and your Roku/AppleTV/Chromecast…and you have to reach into your basket of remotes just to change channels.
Imagine what would happen if a real tech company were allowed to compete on equal terms with the cable providers.
Microsoft, for example, could offer an integrated Xbox that would provide Internet access, TV channels with a guide designed by Microsoft, WiFi, an optional telephone, games of course, and other apps as desired. One box, three connectors: power, coax from the street, and HDMI to the TV set. There would be dancing in the streets.
But, you’ll object, what about the technical challenges? Cable systems are antiquated and poorly standardized. The cables themselves carry all sorts of noisy signals. What tech giant would want to deal with this mess?
To which one can reply: Look at the smartphone. It’s the most complicated consumer device we’ve ever known. It contains radios (Wifi, Bluetooth, multi-band cellular), accelerometers/gyroscopes, displays, loudspeakers, cameras, batteries… And yet, smartphones are made in huge quantities and function across a wide range of network standards. There’s no dearth of engineering talent (and money) to overcome the challenges, especially when they’re tackled outside of the cable companies and their cost-before-everything cultures.
Skeptics are more likely to be correct about the regulatory environment or, to be more precise, regulatory capture, a phrase that…captures the way regulators now work for the industries they were supposed to control. Can we imagine the FCC telling Comcast: “Go ahead and buy Time Warner…just one little condition, make sure any and all of your connection protocols and services APIs are open to any and all that pass the technical tests listed in Appendix FU at the end of this ruling.”
That’s not going to happen. We must prepare ourselves for a sorry display of bad faith and financial muscle. Who knows, in the end, Comcast might give up, as AT&T did after telling us how pro-consumer the merger with T-Mobile would be.