Playing Real-Life Monopoly
Published on Counterpunch, by Alfredo Lopez, Feb 25, 2014.
It might seem like a game of Monopoly played by real monopolies and, with a tired groan, one might be tempted to dismiss it as part of an ugly but irreversible trend. But the merger of cable-television mammoth Comcast with its runner-up competitor Time-Warner Cable is a huge piece of news whose outcome, if it goes forward, will be crippling to communications in this country … //
… The courts can stop this merger. Most analysts doubt they will.
Anti-trust laws have a critical place in modern capitalism. With an imperative to grow, companies always attempt to corner their market. And when they become big, companies can do virtually anything they want and have always been able to. The only real blocks they confront are labor unions (which are weaker than ever) and a set of laws explicitly outlawing monopoly: the ability of one company to control an entire market through take-over or purchase of its competitors.
As hard as it is to imagine, regulators once enforced those anti-trust laws and, until the mid-2000s, they strictly prohibited any vendor from controlling more than 30 percent of the cable market. That prohibition was a product of decades of pressure and protest by consumer advocates and free media organizations. Comcast wasn’t happy with that restriction and, starting around 2005, it poured a fortune into fighting to over-turn the federal 30 percent rule. In 2009, a federal appeals court threw the rule out.
The FCC and federal litigators may go to court to oppose this merger but it’s difficult to see what ground they will stand on. Monopoly, in today’s capitalism, isn’t only permitted, it’s ubiquitous.
In fact, both Comcast and Time-Warner are already monopolies. This merger is merely a logical extension.
The history of Comcast is a case study in corporate gobbling of selections all over the menu. Since 1990, when it began its quest to become the major player in entertainment transmission, the company has acquired AT&T Broadband (which set its footprint in cable TV) and then literally dozens of local and regional cable companies. It also bought MGM (the movie studio), Universal Pictures (ditto), a controlling interest in the NBC system (including MSNBC), a dizzying array of companies like theme parks and investment firms and over a dozen local systems previously controlled by Time-Warner.
If something makes you cry or laugh when you see it, there’s a good chance Comcast owns it. The company serves cable television to about 21 million homes in the U.S. … //
… Comcast’s explanation for this data-limitation policy is revealing. They claim it’s to protect most users (who don’t use this kind of data) from “usage hogs.” In short, Comcast has developed a sneaky pricing policy which inhibits the full use of the Internet but is shifting the blame to…you guessed it: consumers.
That’s why activists are particularly concerned. The company that will now be selling all the information needs that subscribers have has traditionally shown no respect for information users. And since it can now offer “tiered content delivery” on the Internet (due to the recent court trashing of Net Neutrality rules), the morphing of the Internet to an on-line “bazaar” is almost a foregone conclusion.
Comcast’s recent Netflix deal demonstrates how it plans to take advantage of the Net Neutrality demise. The deal doesn’t violate Net Neutrality in the traditional sense. Net Neutrality prohibits a service provider (like Comcast) from dividing its data lines into faster and slower lines and then charging more to put certain websites into the faster ones. This isn’t about the speed of your connection to the Internet (which already involves paying more or less), it’s about allowing certain sites to move more quickly over those connections than others. This deal actually offers Netflix its own speedy connection directly to your television. That might sound good if you’re a Netflix viewer, but you’ll probably end up paying more for your movies because Netflix will be paying more for the faster connection, and, more importantly, other sites that you want to visit will become harder, or impossible to access.
“Officially, Comcast’s deal with Netflix is about interconnection, not traffic discrimination,” explains Timothy Lee in his informative Washington Post piece on the deal. “But it’s hard to see a practical difference between this deal and the kind of tiered access that network neutrality advocates have long feared. Network neutrality advocates are going to have to go back to the drawing board.”
As bad as all this might be currently, the most destructive impact of this merger will be felt in the future because new technologies — like Google Fiber — can deliver Internet speeds that make Comcast’s look slow. But the company insists that consumers don’t want that kind of speed. “Our business customers can already order 10-gig connections,” wrote Comcast Vice President David Cohen. “Most websites can’t deliver content as fast as current networks move, and most U.S. homes have routers that can’t support the speed already available to the home.”
In cyber-corp speak, that means that if enough Comcast customers want the higher speed, they will have to pay top dollar for it. Not only will this put Comcast in control of the Internet’s content. If the merger is approved, Comcast will control the Internet’s access and speed.
Internet activists expected and warned of developments like this when the courts threw out Net Neutrality in January but the speed with which Comcast has moved has unquestionably surprised us. As I wrote in my last piece, we need to de-privatize the Internet…now more than ever.
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(Alfredo Lopez writes about technology issues for This Can’t Be Happening).
Links:
A 1963 critique of neoclassical econmics: Did anything change? on Real-World Economics Review Blog, by merijnknibbe, Feb 26, 2014;
Putin’s Difficult Decision: Ukraine Remains a Danger for Russia, on Spiegel Onine International, by Uwe Klußmann, Feb 25, 2014: The situation in Ukraine remains volatile — and presents Russian President Vladimir Putin with a difficult conundrum. Should Ukrainian nationalists continue to gain power, pressure will grow on the Kremlin to take action …;
website: This Can’t Be Happening! …a major destabilizing influence;
This Can’t Be Happening at Macdonald Hall, on en.wikipedia is a 1978 novel by Gordon Korman. It is the first installment of the Macdonald Hall series, and was the first written work of Korman. It is dedicated to his English teacher, Mr. Hamilton. The book was republished in 2003 with a new look and updated text (updated to match today’s economy and slang). The title was also shortened to This Can’t Be Happening!. The rest of the books in the series would all eventually be republished. Cover photos and illustrations were done by Rodrigo Moreno, Luis Borba and Yüksel Hassan.