State should call shots in Comcast acquisition of Oceanic

The impending merger between Comcast and Time Warner Cable (TWC) hit Hawaii a few weeks ago.

On April 11, Comcast asked the state Department of Commerce and Consumer Affairs to approve Comcast’s acquisition of Oceanic’s lucrative Hawaii cable franchises.

The proposed merger gives DCCA an extraordinary opportunity to get a better deal for consumers. Comcast needs the consent of local authorities to acquire the TWC franchises for $45 billion. (Yes, billion.) Each local franchising authority, including Hawaii’s DCCA, has tremendous bargaining power — if they use it.

Many believe the merger will result in reduced customer service, less investment in underserved areas, and increased control over viewing options via traditional cable or the Internet.

If the merger is not in the public interest, DCCA can deny Comcast’s application, unless the company agrees to expand services to remote areas, provide more resources for public, educational and governmental (PEG) access, and limit its ability to control content delivered via the Internet.

Comcast has a dismal customer service record. A new survey from The Consumer Reports National Research Center puts Comcast and Time Warner Cable near the bottom of the list for customer satisfaction. Huffington Post calls the merger "a disaster for customers."

Comcast is the largest cable and Internet provider in the United States. Time Warner Cable is second largest for cable and third largest for Internet.

"A merger combining these two huge companies would give Comcast even greater control over the cable and broadband Internet markets, leading to higher prices, fewer choices, and worse customer service for consumers," says Delara Derakhshani of Consumers Union.

Prices for monthly cable service have risen steadily, despite complaints about low value and poor service.

"Having made their significant network investments some time ago, the big cable guys are in harvesting mode and have been reaping enormous revenues for years," writes Susan Crawford, a national expert on telecommunications. "Comcast’s and Time Warner Cable’s revenues of $172 billion (between 2010 and 2012) were more than seven times their capital investment of $23 billion during that same period."

U.S. Sen. Al Franken of Minnesota warns that if Comcast controls the Internet, it will also control what people see on the Internet.

Franken explains, "My concern is that Comcast will be able to use its clout in the broadband distribution market to obtain an anticompetitive advantage in the content market."

Netflix, which opposes the merger, pays fees to Comcast to improve Netflix video quality. What about smaller businesses, that can’t afford to pay fees to be seen? When one company controls the streams, it decides who gets the water. This is what Comcast wants to do with the Internet.

Transfer of the Hawaii cable franchises to Comcast can only happen with DCCA approval. It’s a rare opportunity when the bargaining power shifts, and the state has the upper hand.

Most Hawaii households are cable subscribers. How many have called or emailed DCCA and the governor to get a better deal on cable? Usually it might not make a difference, but this is an unusual opportunity. Please tell DCCA and the governor to negotiate a good deal for Hawaii, while they can.