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Sen. Franken: Comcast-Time Warner Cable Proposal Threatens Nature of Internet, Raises Net Neutrality Concerns

As Deal is Reviewed, Franken Presses DOJ to Consider Net Neutrality Implications; Says Proposed Acquisition Could Shift Balance of Power on Internet from People to Corporations

Wednesday, March 19, 2014

Today, U.S. Sen. Al Franken (D-Minn.), who recently came out in opposition to Comcast's proposed acquisition of Time Warner Cable, continued to raise concerns about its potential impact 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 sent Wednesday to the Department of Justice (DOJ), which you can read below, Sen. Franken called the Internet a place where everyone can participate on equal footing. But, he said, the proposed deal would give Comcast-already the nation's dominant Internet service provider-even more leverage to manipulate Internet traffic to serve its own corporate interests.

"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," Sen. Franken wrote in his letter. "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."

Later, he added, "I am very concerned that Comcast could use its clout in the broadband market to dictate the content consumers receive and the prices they pay, and these concerns are only intensified by Comcast's proposal to acquire Time Warner Cable."

Comcast's net neutrality obligations, which were put in place by the Federal Communications Commission (FCC) after the company's acquisition of NBC Universal in 2011, are set to expire in 2018. Sen. Franken is concerned about what will happen after those rules expire-especially if this deal with Time Warner Cable is approved.

Sen. Franken has said net neutrality is the principle that the Internet belongs to the people, not huge corporations. That means Internet service providers can't pick and choose what content will reach consumers. Net neutrality also prevents Internet service providers from charging more for faster speeds to access that content. Sen. Franken has also said that net neutrality is the free speech issue of our time, calling the Internet the public square of the 21st century and a marketplace for new businesses and new ideas.

When the Comcast-Time Warner Cable proposal was first announced in February, Sen. Franken wrote to several top federal regulators and asked them to carefully scrutinize the deal, raising concerns that concentrating more market power in the hands of fewer companies will stifle competition and leave consumers with fewer choices and higher prices.

Sen. Franken has also pressed the FCC to take into account Comcast's history of violating certain consumer protection measures, including the conditions imposed on Comcast by the FCC after it acquired NBC-Universal.

You can read the full text of today's letter to the DOJ below.

March 19, 2014

The Honorable Renata B. Hesse
The Honorable David I. Gelfand
Deputy Assistant Attorneys General
Antitrust Division
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001

Dear Deputy Assistant Attorneys General Hesse and Gelfand:

I am concerned that Comcast's proposed acquisition of Time Warner Cable could compromise the open nature of the Internet, which is one of the reasons I oppose the deal. I am writing to request that you to take this important issue into account when you evaluate the proposal's anticompetitive effects.

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.

Net neutrality protects consumers by prohibiting broadband service providers, such as Comcast and Time Warner Cable, from picking and choosing which lawful Internet content will reach homes and offices across the country. Settlement-free peering arrangements perform much the same purpose, allowing Internet traffic to flow freely among backbone and last-mile networks without interference from the corporations that control the infrastructure.

Because of net neutrality and settlement-free peering, the website for a small hardware store in rural Minnesota loads as quickly as the website for a big, national chain; Vikings fans can read about their team on the website of their choice, whether that's ESPN or a blog written by a local fan; and an email from a constituent in Duluth gets to me as quickly as an email from my bank. Without open Internet protections, Comcast, Time Warner Cable, and other broadband service providers could block, degrade, or charge extra fees to transmit Internet traffic. As I wrote in a 2010 letter to the Federal Communications Commission (FCC), absent sufficient protections, "Comcast is free to use its control of its high speed Internet service to block or impede content that it finds in any way competitive with its own content."

When Comcast acquired NBC Universal in 2011, the FCC echoed my concerns, stating that "Comcast will have the incentive and ability to hinder competition from other [online video distributors] . . . through a variety of anticompetitive strategies," including "blocking, degrading, or otherwise violating open Internet principles with respect to the delivery of unaffiliated online video to Comcast broadband subscribers." In fact, Comcast previously had been caught doing just that, resulting in an FCC order concluding that "Comcast's conduct poses a substantial threat to both the open character and efficient operation of the Internet, and is not reasonable." The FCC also questioned Comcast's veracity during the proceedings, concluding that "Comcast's claim that it has always disclosed its network management practices to its customers is simply untrue." More recent reports indicate that Comcast has begun to change its relationships with backbone networks or popular content providers who need access to Comcast's millions of customers.

While widespread practices of this nature might benefit Comcast's bottom line, they could be very harmful to consumers and small businesses. To address some of these concerns, the FCC required Comcast to abide by net neutrality rules as a condition of Comcast's acquisition of NBC Universal. Comcast now touts those net neutrality conditions as a reason to support the corporation's bid to acquire Time Warner Cable. For example, in a recent memorandum, Comcast's Executive Vice President wrote that the "Open Internet protections will be extended to millions of additional broadband customers" as a result of Comcast's proposed acquisition and that "the new company's broadband consumers will enjoy the enforceable protections of the no blocking and non-discrimination rules that were put in place by the FCC." He reiterated this point in at least one recent interview with the media, and I expect Comcast to make a similar case to the Justice Department.

Comcast's statements tell only part of the story, however. First, Comcast's net neutrality obligations expire in January 2018, which raises the question of what happens after that time. Second, the FCC's net neutrality conditions do not extend to peering arrangements.

I am very concerned that Comcast could use its clout in the broadband market to dictate the content consumers receive and the prices they pay, and these concerns are only intensified by Comcast's proposal to acquire Time Warner Cable. With more than 20 million customers, Comcast already is the nation's dominant Internet service provider, controlling about a quarter of the national broadband market and a much higher percentage of the market in many of the local areas in which it operates. By acquiring Time Warner Cable, Comcast would extend its reach substantially, covering millions of additional customers. This would give Comcast even more leverage to manipulate Internet traffic to serve its own corporate interests.

I therefore request that you include a thorough evaluation of open Internet issues in your analysis of Comcast's proposed acquisition of Time Warner Cable. I look forward to working with you on this important issue.

 

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