FCC Should Reject Static Assumptions Behind Opposition to Comcast-Time Warner Cable Merger

Today, TechFreedom filed reply comments on the petitions of Public Knowledge et al and Free Press, which seek to block the proposed merger of Comcast and Time Warner Cable. As in its earlier comments, TechFreedom noted that the merger would not actually affect broadband competition, since the two cable companies do not compete in any market. The reply comments survey massive upgrades in telcos’ DSL architectures to compete with cable and urge the FCC to reject static assumptions about broadband competition.

Telcos are making gains. “Opponents of the merger are stuck in December 2013. They insist that only all-fiber networks like FiOS can compete with cable, and dismiss next-generation VDSL technologies out of hand,” said TechFreedom President Berin Szoka. “Sometimes, the best way to check the weather is to step outside: upgraded DSL technologies are being deployed in the real world on a massive scale.” In November, AT&T completed a $14 billion program to upgrade 75% of its DSL footprint to VDSL service, now offering speeds of 45-75 Mbps to half of all Americans. “VDSL is far faster than what most Americans use today, and more than fast enough to compete vigorously with cable.”

Other telcos are following AT&T’s example by pushing fiber deeper into their networks and upgrading their network equipment for VDSL technologies, which can deliver 45-100 Mbps, or even greater under certain conditions. “Upgrading DSL isn’t as sexy as Verizon’s fiber-to-the-home service, but it’s essentially the same cost-effective strategy pursued by cable with its successive upgrades to new DOCSIS standards,” continued Szoka. Meanwhile, telcos and new entrants like Google Fiber are deploying FTTH service in dense urban clusters around the country, just as Verizon has done. ”Facilities-based competition is thriving, even as the spectre of a cable monopoly has driven calls to block a merger that doesn’t actually affect competition.  Regulators should be careful not to make sweeping judgments about this merger based on unsubstantiated claims about the current and future capabilities of DSL.”

The market is dynamic. “Opposition to the merger rests on a fundamentally static mentality about the broadband market, ignoring its true dynamism,” said TechFreedom Legal Fellow Tom Struble. “Network innovation has always gone through cycles of technological leapfrogging, with competitors all trying to outdo each other. It is wrong to dismiss DSL services at a particular moment based on their current characteristics, because the technology is constantly evolving. No one really knows exactly what the future will look like, but it is extremely unlikely to look as bleak as Public Knowledge, Free Press, and other doomsayers predict. If these critics would but wait for the future, rather than predict it, they might see that new technologies are already allowing telcos to compete with cable around the country.”

Szoka is available for comment at media@techfreedom.org, and see our other work on the proposed merger of Comcast and Time Warner and promoting broadband deployment, including:

  • “Comcast-TWC Merger Would Expand Broadband, Benefit the Underserved,” a statement from TechFreedom
  • “Comcast / Time Warner Merger Won’t Reduce Competition, Actually Expands Net Neutrality,” a statement from TechFreedom
  • “Misguided Opposition to Comcast-TWC Deal Shouldn’t Affect the Outcome,” Berin Szoka in The Hill
  • “Comcast-TWC Deal Won’t Reduce Competition,” Geoff Manne in The Global Post
  • “Comcast / Time Warner Deal Will Expand Net Neutrality,” Berin Szoka in Mashable
  • “Don’t Blame Big Cable. It’s Local Governments That Choke Broadband Competition,” Berin Szoka and Jon Henke in Wired.com

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