Mar 12, 2015

A False Claims Act – the Non-Coalition’s Allegations against the Time Warner Cable Deal

Recently, several opponents of the Time Warner Cable (TWC) transaction were "organized" into a "coalition" out of a DC lobbying firm.  That group has now made some claims about our transaction with TWC in statements and something they call a "white paper."

Like a lot of the work of this group, this latest attempt was just a series of what can charitably be called factual inaccuracies.  We’ve addressed this in a filing with the FCC.  Here’s a sampling of what they got wrong:
 

  • Comcast Prevailed on the Key Issue with Project Concord – and Proceeded to License it Substantial Content:  Project Concord was not "litigated" out of existence.  In fact, it launched as HitBliss using substantial amounts of content from NBCUniversal.  The fact is that the Media Bureau ruled in NBCUniversal’s favor on the core issue in this case, which had nothing to do with whether Project Concord had a right to content, but rather which content they could demand given third party contractual restrictions.  And notably, while opponents try to paint this arbitration as evidence of wrongdoing, the Media Bureau resolved the case without any suggestion of non-compliance by NBCUniversal.  In short, this coalition has the facts wrong here—both about the past and the present.
     

  • The Bloomberg Case Involved an Interpretive Issue of First Impression – Which Has Been Long Resolved.  The Bloomberg matter involved a disagreement over the proper interpretation of the specifics of the NBCUniversal "neighborhooding" condition — not a compliance issue.  In fact, the FCC was not asked to and did not find that Comcast had violated the underlying condition in any way.  Once the FCC interpreted the condition, Comcast promptly followed the agency’s interpretation.  Comcast remains Bloomberg TV’s largest distributor, and the parties have a strong and amicable business relationship; in fact, Bloomberg recently asked the FCC to excuse Comcast from the fully-satisfied neighborhooding requirements so that Comcast could fulfill Bloomberg’s specific channel placement priorities.  And Michael Bloomberg, currently the CEO of Bloomberg L.P., is one of the many respected third parties who have come out in favor of this transaction.
     

  • Soul of South Is Alive and Well:  Again, the coalition failed to check facts.  Soul of the South TV has distribution in five Comcast markets.  It may – as many programmers do – want broader distribution, but there is no compelling customer demand for broader distribution of the channel.  Soul of the South receives similar (and in many cases, less) limited distribution from nearly every other MVPD in the marketplace.  It is thus mystifying to spin this as a Comcast issue, much less a transaction- specific one.  Comcast’s track record in supporting independent programming speaks for itself.  Since 2011, Comcast has launched 20 new independent networks and has expanded carriage of over 141 independent networks by more than 217 million customers.  It also distributes several programming services targeted to African American audiences, such as TV One, Bounce TV, Centric, Aspire, Revolt, and Up. 
     

  • Back9 Failed On Its Own MeritsThe notion that Comcast is responsible for Back9’s failed carriage talks with Time Warner Cable specifically and its lack of success as a programming service generally is, in a word, absurd.  Back9 was unable to convince any MVPD other than DirecTV  that it merited carriage at all.  It is hard to see how the demise of a network that TWC, AT&T, FIOS, DISH, Cox, Charter, and Cablevision – among others – chose not to carry somehow relates to this transaction—or to Comcast at all.  Rather than stifling independent programmers, Comcast is an industry leader in the carriage of independent programming, as numerous independent programmers can and did attest in the FCC proceeding reviewing the TWC transaction. 
     

  • Standalone Broadband Has Been a Success:  The effort to try to turn Comcast’s Standalone Broadband Consent Decree into something nefarious also fails on its face.  First, in more than four years since the NBCUniversal transaction, that Decree is the only compliance concern that has arisen, and it occurred in the first weeks after the deal, when Comcast was first implementing the conditions.  Second, the notion that anything was hidden is absurd:  Comcast publicly entered into a voluntary consent decree that was fully implemented and satisfied.  Meanwhile, Comcast continues to offer every tier of its broadband service on a standalone basis, and this has become a substantial component of its broadband business.
     

  • There Is No Open Internet (or Deal-Related) Authentication Issue:  The issue relating to authenticating HBO Go on Playstation 4 is nothing more than a purely commercial issue – it is not an Open Internet issue.  The fact is, Comcast authenticates more than 90 different programming networks on 18 devices and authenticates HBO Go, in particular, on the HBO website, the iPhone and iPad, Android smartphones and tablets, Kindle Fire, Xbox 360, Apple TV, Samsung smart TV, and Roku devices.  Besides this, Comcast provides its customers with authenticated access to HBO and dozens of other programmers on multiple devices through its robust Xfinity Go app, which allows customers to get all their programming in one safe, easy to use, and familiar app.  And in any event, Comcast’s authentication of HBO Go isn’t remotely related to the Open Internet requirements, which address how Comcast provides broadband Internet access service to its retail customers, not whether Comcast shares its cable customers’ credentials with third parties.  Even more important, the issue has no connection to this transaction at all.   
     

While there are legitimate issues that the FCC and the DOJ are reviewing related to this transaction, the ones raised here aren’t among them.

Benefits of this transaction remain undisputed – more people will get faster broadband and advanced video services.  Business customers will have more options.  Our acclaimed low-income broadband program which just this week announced record breaking numbers will be extended to some of America’s largest cities.  All while consumers have the same number of choices they have today for broadband, video and phone service.

Tags : Time Warner Cable, TWC, TWC Transaction

 
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