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24
Mar
2014

US Senator Franken: Comcast-Time Warner Merger Threatens the Nature of the Internet

by Bill

net neutralitySabre-rattling over major mergers, net neutrality and the way bandwidth will be allocated continues to capture headlines. Now the US Senate is stepping into the fray and imploring regulators to be cautious with Comcast. US Senator Al Franken (D-MN) has raised what he describes as serious concerns about the proposed acquisition of Time Warner Cable by Comcast and its effects on consumers. The deal, he said, “could jeopardize the open nature of the Internet by tilting the balance of power from people to huge corporations.”

In a letter addressed to the Department of Justice’s Antitrust Division, Franken stated: “The Internet is an open marketplace where everyone can participate on equal footing, regardless of one’s wealth or influence – and I believe that’s the way it should be. The Internet has been a platform for innovation and economic growth since its inception. It also has connected Americans in unprecedented ways, facilitating the free exchange of information and ideas. Simply put, the Internet belongs to the people, not to huge corporations. Comcast’s proposed acquisition of Time Warner Cable could disrupt this balance of power, resulting in higher costs and fewer choices for consumers. Without open Internet protections, Comcast, Time Warner Cable, and other broadband service providers could block, degrade, or charge extra fees to transmit Internet traffic.”

Franken also wants to make peering an issue in the merger review. While big network operators have traditionally engaged in “settlement-free peering,” exchanging traffic without payment, recently consumer ISPs like Comcast have begun demanding, and getting payments from Netflix and its traffic providers, and is currently in a battle with Cogent, another one of the companies Netflix pays to distribute its traffic across the Internet.

Sen. Franken noted that prior to the NBC Universal acquisition, Comcast was sanctioned by the FCC for degrading traffic. That FCC ruling dates from 2008 and found that Comcast had “secretly degraded” peer-to-peer traffic on their network. As a condition on the approval of their acquisition of NBC Universal, Comcast is not allowed to block or discriminate against Web traffic, but Franken noted that “Comcast’s net neutrality obligations expire in January 2018, which raises the question of what happens after that time.”

The Comcast Time Warner Cable merger will be reviewed by both the FCC and DOJ, and in response to Franken’s comments, Comcast issued the following statement: “The Comcast Time Warner Cable transaction will bring millions more Americans under the Open Internet rules as soon as our deal closes. We fully expect that the FCC will have in place Open Internet rules that will apply to all companies by the time our current condition from the NBCUniversal deal expires in 2018. That condition was always meant as a bridge to enforceable rules that would be applicable to all companies in the industry. Comcast has supported the Open Internet rules since they were first proposed and is the only company that is currently required to abide by them.”

What makes these moves interesting is that appear to all be aimed at slicing and dicing the pie among a very small group of top end players with mention of consumers only insofar as it affects these monolithic deals on data usage. How these landmark moves will impact individual site owners and their visitors remains to be seen, and NationalNet will continue to track each plot-point for our customers to find as many innovative ways to create a competitive advantage as we can find.

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