Using words like "behemoth" "harm" "undermine" and "deny" in reference to a combined Comcasdt/NBCU, Earthlink GeneralCounsel Samuel DeSimone Jr. plans to tell the FCC it needs to make mandatory wholesale access to at least four independent Internet Service Providers (like Earthlink) a condition on the deal if it should approve it.
That is according to prepared testimony for a House Communications Subcommittee field hearing on the proposed deal Thursday in Chicago.
"The dramatic increase in the scope and scale of Comcast's control over programming and content, combined with its dominant gateway control over the broadband access network, raises the risk that the transaction will result in less competition, diminished choice, decreased information diversity, reduced broadband network investment, and higher costs for consumers," says DeSimone.
He says Comcast does not make its service available to the majority of its footprint, and where it does--Boston, Seattle, Houston and "a few other relatively small metropolitan areas," the price is a disincentive.
"Comcast's refusal to offer EarthLink wholesale services in the majority of its footprint has essentially excluded EarthLink and other independent ISPs from providing consumers a choice of competitive broadband services in many markets where Comcast is the only highspeed option," says DeSimone. "EarthLink's current contractual arrangement with Comcast is limited geographically in scope to the Boston, Seattle, and Houston markets, as well as a few other relatively small metropolitan areas, which represent only a small fraction of consumers passed by Comcast. Moreover, the pricing of this limited arrangement renders the wholesale service uneconomic for consumers. As a result, competition and consumer choice is further constrained."
"There is competitive choice in broadband markets," said Comcast spokeswoman Sena Fitzmaurice in response to the charictarization. "For example in the Chicago area, consumers can chose from AT&T DSL, Verizon Wireless, Clearwire, Comcast, RCN, WOW, and other options."
"Earthlink's requests for wholesale regulation are not new," she said. "[T]hey have been pushing these policies for a decade. Other resellers like AOL have moved on and changed their business models. Wholesale regulation was not a successful policy, it does not lead to investment in facilities based competitors. To the extent this issue should be addressed, it should be done on an industry-wide basis."
The Federal Trade Commission did impose open access conditions on the combination of AOL and Time Warner, which Earthlinkpoints to as precedent it would like the commission to follow.
At the time, then National Cable & Telecommunications Association President Robert Sachs countered that it should not be a template for future deals and was unique to AOL's dominance--then almost half of the Internet access market.
Comcast estimates it has about 1/5 of the market at most, less if dial-up is included.
Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.
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