RealTime IT News

Comcast Declines Open Access Pledge

WASHINGTON -- Comcast Corp. President Brian L. Roberts declined Tuesday to legally commit to open access for independent service providers (ISPs) in the proposed merger between AT&T Broadband and Comcast Corp. Testifying before the Senate Subcommittee on Antitrust, Roberts said "that's absolutely our intention," but stopped short of agreeing to the provisions for open access that marked the AOL-Time-Warner merger.

In the $112 billion AOL-Time Warner deal, the companies gained government approval after agreeing to "protect consumer choice" by allowing customers a choice of three ISPs aside from AOL within three months of offering service in any particular market.

Federal law does not require cable companies to offer competing ISPs to their customers but the magnitude of the AOL-Time Warner deal, the largest in U.S. history, raised concerns about marrying the nation's largest ISP with Time Warner's 12 million cable subscribers and its vast content library and prompted the special multiple ISP requirement.

A merged AT&T-Comcast would have approximately 22 million subscribers in 17 of the 20 largest markets in the U.S. The $72 billion deal would make the new company, to be called AT&T Comcast Corp., the nation's largest cable company. AOL-Time Warner would be number two.

So far, Comcast and AT&T Broadband officials have sidestepped comparisons between its proposed merger and the AOL-Time Warner deal, contending consumers will have ISP choices from cable, satellite, wireless and phone lines.

"Why won't you agree to high speed internet access for other providers in this deal?" Sen. Kohl (D. Wis.) asked Roberts.

"We're not AOL," he replied. "We've said for some time that we want to offer as many connective points as possible. AOL has 30 million subscribers, we (Comcast) have 1 million. We don't have the gate keeping function that it (AOL) has."

There was no follow-up question from the Senate panel, but Kohl added, "You've done an outstanding job of representing your company, and I applaud you for that, if not necessarily the best interests of consumers."

Roberts was one of six witnesses to testify Tuesday in a hearing long on prepared statements and short on debate. Also testifying were C. Michael Armstrong, chairman and chief executive officer (CEO) of AT&T ; Garry Betty, CEO of Earthlink ; Richard R. Greene, president and CEO of CableLabs; Mark Haverkate, president and CEO of WideOpen West; and Robert A. Perry, vice president of marketing for Mitsubishi Digital Electronics America, Inc.

"It has been said that you can do just about anything you want in Washington these days as long as you say it is to promote broadband deployment," said EarthLink's Betty. "One example of this has been the refusal of most major cable companies to allow consumers who want to connect to the broadband Internet through a high-speed cable modem to choose their Internet provider. Rather, these cable companies have forced consumers to use just their cable company's in-house Internet service."

Betty said this "take-it-or-leave-it" choice has resulted in "higher prices and lower adoption rates than would be the case if consumers had competitive choice in their Internet service provider."

In his prepared remarks, Betty pointed out that last year, cable provided approximately two-thirds (6.5 million out of 9.5 million) of all broadband connections. By the end of this year, that number is projected at 60 percent.

"We therefore here today ask that AT&T and Comcast commit to providing customers in all their markets a choice in broadband ISPs over cable by signing commercially reasonable contracts with independent ISPs prior to their merger being approved," Betty said.

Late in the afternoon, with only Senators Arlen Specter (R.-Penn.) and Mike DeWine (R.-Ohio) still in attendance, Specter, who earlier in the day gave an effusive introduction to Roberts, perhaps foreshadowed the committee's position on the proposed merger.

"There is a sense of unease in the Congress over mergers and acquisitions but unless there is a violation of the anti-trust laws, which doesn't appear to be case here, there's not much here we can do," he said.