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The Byrne Report

Cable Fist

WHEN THE AMERICANS invaded Iraq in March 2003, my wife and I became so sickened by the blood and lies on television that we decided to kill the messenger. I called the local cable monopoly, Comcast Corp., and had the TV signal disconnected, keeping the broadband Internet connection--thinking to save a few bucks in the bargain.

Nope. The next bill was the same. Turns out that my rate was based on bundling television and broadband. We were to be penalized for unhooking the government propaganda network. Enraged, I had Comcast reconnect the TV signal. We put the beastly machine in a closet and have not watched it since.

I recently became re-enraged by Comcast, when it banned all FM radio from its cable pipe, including KPFA and National Public Radio--stations that run programming somewhat critical of Corporate America. We don't have enough room on our teeny tiny broadband for FM radio, Comcast claimed, as it made way for more Clear Channel drivel.

I wanted to register a complaint, but where to go? Whereas cable TV and telephone are semiregulated, cable modem Internet is not regulated by anybody--not the local government, not the California Public Utilities Commission (CPUC), not the Federal Communications Commission. Despite the fact that broadband uses the same cables that television and telephone electrons travel, web flow is not considered to be an "intrastate telecommunications service," but an "interstate information service."

The U.S. Supreme Court is currently considering whether broadband should be regulated. Today, however, Comcast, which grossed $20 billion last year, can jack up its Internet fees at will, deliver its trademark poor quality service and charge a premium for slightly upgrading the sputtering technology.

It is slicing up the cable market with erstwhile competitors--such as Time Warner, Disney, Microsoft, Sprint and Liberty Media International--without eliciting a single antitrust fart out of the Bushies. Market concentration, as usual, is proving fatal to the notion that "free enterprise" promotes technological innovation.

According to the May/June issue of Foreign Affairs, the broadband service provided to most U.S. homes is "among the slowest, most expensive and least reliable in the developed world." Internet expert Thomas Bleha reports that "nearly all Japanese have access to high-speed broadband with an average connection speed 16 times faster than in the United States--for only about $22 a month." In Japan, Internet connections can whiz along at 40 megabytes per second. Much of the U. S. slugs along at 1.5 megs per second. In the North Bay, Comcast recently upgraded residential customers to 4 megs. But if you want 6 megs--which in much of Asia is molasses--you have to fork over another $10 per month to the cable monopoly.

There are reasons why Comcast, the largest cable provider in America, appears to be deliberately retarding progress. Bleha comments: "Cheap, high-speed broadband would lead to widespread use of Internet telephones and thus threaten the phone companies' lucrative voice-telephone business." Comcast provides 1.2 million customers with relatively expensive cable voice telephone.

Bleha continues, "And more inexpensive broadband would multiply outside video and movie offerings and endanger the cable companies' profitability." In the North Bay, potential high-speed Internet-delivery competitors are excluded from Comcast's unregulated cable modem infrastructure.

Commenting on the Foreign Affairs article, a spokesperson for the National Cable and Telecommunications Association, an industry trade group based in Washington, D.C., said that Asian countries are more advanced than the United States because "their population is very heavily concentrated in urban areas, and broadband development is subsidized by the government." Of course, neither Santa Rosa nor San Francisco are fully connected to broadband, so that first argument is fatuous. As for the government subsidy, according to Comcast's 2004 annual report, the federal government allowed Comcast's $50.6 billion acquisition of AT&T in 2002 to "be structured as a tax-free transaction to Comcast Holdings and AT&T."

That sounds like government subsidy to me. Not to mention that zero regulation is a form of subsidy, in that profit-dripping rates are set by cartels without government oversight.

CPUC commissioner Geoffrey Brown told me there are anticonsumer trends in cable Internet: gradual consolidation with fewer players; dismantling of state authority and preemption of price regulation; elimination of customer-protection rules.

Brown sees that the telecommunications giants, like SBC Communications, and the cable guys, like Comcast, are struggling to combine traditional telecommunications, like telephony, with Internet protocol as a way to escape all regulation.

Forever.

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From the April 27-May 4, 2005 issue of the North Bay Bohemian.

© Metro Publishing Inc.

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