7 comments

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  ekc

  1 year ago

  I think it's important to note that the two companies that you are using as examples of the competition that Comcast faces are two of the same companies that have been accused of participating in the warrantless wiretapping program. So my choice is a company that throttles my bandwidth without telling me or a couple of companies that hand my data off to the government without telling me. I guess that still qualifies as competition, but it's not much.
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  Harold Feld

  1 year ago

  A few caveats on the competition picture, however.
  
  1) Comcast did not actually lose customers, as I understand the article. Rather, the rate of uptake has slowed. That's interesting, but is not a sign that competition disciplines the market. For competition to work effectively, customers must actually be willing to switch to a rival service. For comparison, I would observe that Comcast and other cable operators have not lost substantial subscribers to DBS, although DBS gained substantial subscribership nationally for many years. The impact on the rates charged by major providers with minimal, however, because DBS providers tended to pick up customers from rural systems or new subscribers. Thus, while DBS gained, this MVPD competition did not produce the effects policy makes had expected.
  
  2) Another possible explanation, as observed by Comcast itself, is the increasingly difficult overall financial circumstances. The number of people actually losing their homes, and therefore their cable and broadband connections, has hit high enough levels to directly impact systems (particularly Comcast, given its huge geographic coverage). Also recall that we are talking a slowdown in uptake, not a subscriber loss. So even those not getting evicted my simply be deciding that dial up remains a suitable option.
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  Eric

  1 year ago

  I'm still confused as to this wonderful "competition" you keep talking about.
  
  When I look for a "Competitor to Comcast", I'm looking for "Another cable operator I can switch to".
  
  Verizon and AT&T; both sell DSL services which barely qualify as broadband. Sufficient for web surfing and email checking perhaps, but it's really not an option for those of us who need to connect to the company VPN and actually get stuff done.
  
  And as noted by a commenter above me - Verizon and AT&T; aren't exactly shining examples of socially responsible corporations either.
  
  Where's the *real* competition - the guy I can switch to who offers a comparable service and is competing on quality, price, or customer service - who can advertise "net neutrality" and "privacy protection"?
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  Richard Bennett

  1 year ago

  Eric, Verizon sells a service called FiOS which is 20Mb/s symmetrical download/upload. That's as braodband as you can get anywhere in the world (the Japanese service advertised as 100 Mb/s actually moves no faster than 20.)
  
  Some people are just never satisfied.
  
  Harry, I don't know where you get your information about the competition between DBS and cable, because it's not substantiated by figures from the United States, where most DBS customers used to be cable customers. See this link and enlighten yourself.
  
  At the same time that Comcast has suffered a drop in new customers, Verizon and AT&T; are gaining them at an increased rate. Do the math, dude.
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  Harold Feld

  1 year ago

  a) It's Harold. Possibly Hal. Not Harry. My assumption from your use of Richard is you prefer Richard.
  
  b) Ah yes, the use of national statistics while completely ignoring the realities on the ground. Another ideological devotee of the Gods of the Marketplace without regard to the realities on the ground. Meanwhile I suggest you go read the GAO reports on MVPD competition for the last several years -- pay particular attention to the 2002 and 2003 Reports.
  
  Oh, and why not go read the last dozen or so quarterly profit statements on DirecTV and DISH, particularly their churn rates and the delightful time they were forced to restate subscriber rates in 2002?
  
  Rich ol' boy ol' son, there's a REASON that AT&T; is looking to buy DISH and vice versa. It's the same reason that Murdoch wants to sell DIRECTV -- which he affectionately refers to as the "turd bird." Hint-- It's not because they are winning the cable fight. As someone who has actually plowed through the minutia of the numbers on MVPD competition for the last few years, I can assure you that DBS (and I'm a very happy DIRECTV customer) is nice, but it ain't a patch on cable.
  
  Because, Oh Economic Wise One, how do you explain that while Comcast and the other incumbent cable cos were supposedly facing all that fearsome DBs competition, they were able to both increase the price they charged their subscribers AND increase profit per subscriber? When I studied Econ low these many years ago, I learned that in a competitive market, a provider is limited in its ability to raise price. The market of true market power, therefore, is the ability to raise price regardless of actual cost, because there is no need to pass the savings onto the customer.
  
  Mind you, I am hopeful that the telcos will give the cablecos a run for the money. If I invested in the industry (I don't for conflict reasons) I would have bought Verizon stock in late '05 early '06. Fiber to the home is the winning choice (despite your apparent comfort with letting Comcast win by lying to its customers -- Richy baby! Don't you believe in an efficient market? Shame on you!) But the telcos have many advantages over DBS, like being in every home already and an ability to do bundles that increase switching cost. OTOH, the telcos are crippled by the fact that they must terminate cable calls. If it were up to me, we'd either repeal Sections 201 and 202 of the Communications Act or do a better job enforcing Section 628, because the current system gives cable a regulatory edge over telco. But hey, that rant is for another time.
  
  c) Rates of uptake are not churn -- "Dude." You're just impressing me more by the minute. When last I checked, the broadband market was relatively immature. Heck, we barely have a majority of people with internet in the home, let alone broadband. So if Comcast's rate of _increase_ declines and Verizon and AT&T; rates of uptake increase, then t means that they are closing the gap and capturing more of the customers that don't have either broadband service.
  
  That's good, but not great. Because if you think this proves that we get the actual benefits of competition, think again. For you, this may just be about keepin' score. But from a public policy perspective, it's about achieving a desired result. (Hint: It's laid out in Section 1 of the Communications Act.) So lets even pretend we have achieved duopoly and customers switch back and forth between them (which, as I observed above, you have not yet even come close to proving, Ricky). What sort of duopoly is this market? As anyone who actually makes it through the 201 Econ knows, even a Duopoly market can be complex, with behavior ranging from effective monopoly to a state indistinguishable from multiplayer competition. You got the math to demonstrate what market this is? Over the long haul? Given the ude of bundled products and other externalities. Well then Hell Man! Why ain't you picking up one of them little ataboys from Stockholm?
  
  I would urge you to educate yourself, but I'd settle for your learning some manners from your politer co-bloggers. I dropped by because Adam Theirer asked me to post some comments to this blog I'd mentioned in email, and because Jim Harper manages spirited debate without being a condescending ass. Sadly, it gave me a rather sorry set of expectations - Ricardo. But, if you're going to be a pompous ass, at least try to tel the difference between take rates and churn in an immature market so that you don't confuse the ability to capture new customers with the ability to actually take customers from a rival. They really do have different real world consequences.
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  Richard Bennett

  1 year ago

  You seem a bit upset, esteemed Mr. Feld, about my addressing you as "Harry." Well I certainly won't do that any more, and I humbly beg your apology.
  
  You call Comcast a "liar" for reasons you don't explain, but I see on your blog that you believe they're engaging in all sorts of deception in order to "interfere with customer traffic" and the like. I've noticed that those who wish to impose anti-QoS regulations on the Internet generally toe the line of deception, and frequently cross it. So I'd be careful about who I accuse of lying, and why. One of these massive monopolists may tire of the defamation and sue you. I won't, so you can call me names all you want.
  
  The LA Times has reported that the local cable company has actually lost subscribers and the same rate that DBS companies have gained them in that area. I don't know if this is reflected in your government reports, but I'd be curious to know what they say. Perhaps the Times is lying. Los Angeles never struck me as a rural area, which is why I responded to your claim.
  
  I suspect - and I'm not an expert in this area - that HDTV is causing a lot of churn in TV programming providers. DirecTV has allegedly invested a billion in the new birds that bring 70 HDTV channels into our homes, Dish is lagging behind, Cable hasn't spent a dime, and the Telcos are jumping into the game. We will have 3-5 players in the TV delivery business shortly, and that should satisfy your demand for choice, shouldn't it? When I called around recently for HDTV options I found Dish, DirecTV, and Comcast were all willing to deal, so I got my DirecTV HDTV upgrade for free.
  
  I'm pretty sure that's a low price.
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  Harold Feld

  1 year ago

  HDTV is causing issues, particularly for DBS. DBS is in a bad place for the increased bandwidth because it is very difficult for them to increase bandwidth with new technologies. Even when they get relief from the FCC and ITU in the form of putting more birds in the sky, that is hugely expensive and subject to all kinds of problems (such as fnding launch availability). And DBS suffers from the "carry one, carry all" requirement for must carry in local TV markets.
  
  Cable and Telco face fewer problems. Cable has digital pairing technologies that allow them to recapture capacity on digital systems, which is one reason they are migrating to all digital. It is cheaper than building out fiber. Verizon already has fiber, and I am given to understand that they reserve enough capacity for their video product that they have no issues on this score. AT&T; is harder to call, since U-Verse is apparently having general issues unrelated to HDTV.
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