So what happened to the Comcast-TWC deal? Not enough lobbying, or not good enough lobbying?

"They talked a lot about the benefits, and how much they were going to invest in Time Warner Cable and improve the service it provided, but every time you talked about industry consolidation and the incentive they would have to leverage their market power to hurt competition, they gave us unsatisfactory answers."

-- an unnamed senior Senate staff aide, quoted by the NYT's Eric Lipton regarding Comcast's massive lobbying efforts for its takeover of Time Warner Cable

"No amount of public-interest commitments to diversity would remedy the consumer harm a merged Comcast-Time Warner would have caused to millions of Americans across the country."

-- CA Rep. Maxine Waters, who had "offered reserved support for [Comcast's] NBCUniversal deal after playing a leading role in pushing for concessions by Comcast to promote diversity in its programming"

"This merger would have further enhanced this company’s incentive, its means and its history of abuse of market power."

-- CT Sen. Richard Blumenthal, an early critic of the deal

by Ken

As a Time Warner Cable customer, and thus hardly a disinterested observer, I have so far resisted the impulse to dance a jig over the announcement that Comcast has abandoned its effort to swallow TWC. I can't help thinking that great minds will yet knock heads together and come up with something worse.

Still, it's a relief. My only problem with TWC is that they charge too damn much. Whereas those Comcast people -- they're devils.

So what happened? "Ultimately," says the NYT's Eric Lipton in his post mortem, "Intense Lobbying Failed to Assure Comcast's Deal," the deal to amalgamate the country's top two cable operators "collapsed because of clear signals that federal regulators were preparing to block it."

Eric leads off with this tale:

David L. Cohen, the master salesman who runs the Comcast Corporation’s lobbying efforts, stood before a room full of Latino House lawmakers one morning in early December trying to convince them that they should embrace his $45 billion deal to acquire Time Warner Cable.

But as Mr. Cohen continued to talk — taking up much of the time set aside for the closed-door session — at least some of the assembled lawmakers began to wonder if his highly polished pitch was falling short.

"He was smothering us with attention but he was not answering our questions," said Representative Tony Cárdenas, Democrat of California, who said that in the early stages of the deal he was open to supporting it if his questions were addressed satisfactorily. "And I could not help but think that this is a $140 billion company with 130 lobbyists — and they are using all of that to the best of their ability to get us to go along."

So we're talking, what, not enough lobbying? Or just not good enough lobbying?
"The warning signs," says Eric, "were already present from the muted reception [the deal] had received on Capitol Hill."

Despite the distribution of $5.9 million in campaign contributions by the two companies during the 2014 election cycle, and the expenditure of an extraordinary $25 million on lobbying last year, no more than a handful of lawmakers signed letters endorsing the deal. By contrast, more than 100 signed letters of support in 2010 when Comcast was pushing its merger with NBCUniversal.

Congress has no direct power to approve or disapprove any merger, but endorsements, particularly if they come from black and Hispanic leaders, can send a subtle but important message to regulators that the deal is in the public interest and should be cleared. It was not that many lawmakers spoke out against the Comcast-Time Warner Cable deal — it was just that many of them remained silent.

And it's not as if Comcast hasn't been to this rodeo before. Eric notes that the company, "at least until this deal, had a near-legendary reputation in Washington for leveraging its connections."
Its connections?

In 2013, President Obama stopped by Mr. Cohen’s Philadelphia home for a fund-raiser, and Mr. Roberts was envied for having played golf with President Obama that same year in Martha’s Vineyard.

Oh, its connections.

The company carefully assigned members of its sprawling lobbying team to different lawmakers at both the federal and state levels, based often on their ethnicity or past relationships, company officials acknowledged in an interview shortly after the Time Warner Cable transaction was proposed in February 2014.

Comcast, for example, assigned Juan Otero, a former Department of Homeland Security official who serves on the board of the Congressional Hispanic Caucus Institute and now works as a Comcast lobbyist, to be the point person to work with Mr. Cárdenas.

Meanwhile, Jennifer Stewart, an African-American lobbyist on the Congressional Black Caucus Institute board, was assigned to work with Marc Veasey, Democrat of Texas, who is also black. She personally appealed to Mr. Veasey’s staff, urging that he not sign a letter last August questioning the deal, according to an email obtained by The New York Times, citing the company’s work on behalf of the minority community. (Mr. Veasey still signed a related letter.)

Comcast also asked Jordan Goldstein, a former official at the Federal Communications Commission who is now a Comcast regulatory affairs executive, to work with [Connecticut Sen. Richard] Blumenthal’s office. Mr. Goldstein had previously developed a working relationship with Joel Kelsey, a legislative assistant in charge of reviewing the matter for the senator, who is a member of the Senate Commerce Committee.

At the state level, it also hired at least two former state attorneys general — Patrick C. Lynch of Rhode Island and Walter W. Cohen of Pennsylvania — to reach out to state officials, who in many cases have their own antitrust powers, to try to remove impediments to the deal’s approval.

Senator Blumenthal, Eric has already pointed out, "was critical from the deal from the start." He says now, ""There are limits as to how effective even the best advocate can be with a losing case, as this merger would have further enhanced this company’s incentive, its means and its history of abuse of market power."

Oh my.

Lawmakers cited a variety of reasons as to why Comcast’s elaborate pitch failed to gain traction this time: The miserable customer service ratings the company earns, for instance, made politicians leery of helping it out. In addition, there were much more substantial antitrust concerns associated with this deal, and some members of Congress said they thought Comcast had failed to live up to its promises in the NBCUniversal deal, and so could not be trusted this time.

Other lawmakers and staff members on Capitol Hill, in interviews Friday, cited Comcast’s swagger in trying to promote this deal. They said they felt that Comcast was so convinced in the early stages that the deal would be approved that it was dismissing concerns about the transaction, or simply taking the conversation in a different direction when asked about them.

"The miserable customer service ratings the company earns made politicians leery of helping it out"? And members "thought Comcast had failed to live up to its promises in the NBCUniversal deal and so could not be trusted this time"? Oh my.

Comcast itself isn't talking much.

Comcast did not offer on Friday its own post-mortem on the deal’s collapse. "Today, we move on," the Comcast chairman and chief executive Brian L. Roberts said in his short statement. A Comcast spokeswoman declined to comment further.

We learn, though, that "in some cases, lawmakers like Mr. Cárdenas and Mr. Blumenthal had private conversations with Thomas Wheeler, the chairman of the F.C.C., to express their reservations." Oh my. And Senator Blumenthal "also spoke directly with Mr. Cohen," the master lobbyist, "who visited the senator’s office for a chat." The senator, however, "said he came away from the meeting unconvinced."

So did "others on Capitol Hill who had similar conversations," like the two quoted at the top of this post, the "senior Senate staff aide who spoke on the condition of anonymity because he was not authorized to speak publicly," and Rep. Maxine Waters."

Meanwhile Comcast is "mov[ing] forward." Watch out in case it comes too close. Unless you're already one of its customers, in which case God have mercy on your soul. And we TWC customers are left to wonder what's in store for us next.

#

TimeWarner Cable-- Not Just Bad For Consumers… Bad For America

Last week Robert Reich penned a column about the Comcast acquisition of TimeWarner for his blog that I've been meaning to pass along, Antitrust in the New Guilded Age. I was a senior executive at TimeWarner when the horrific AOL merger happened. It's what led to me deciding to retire. Earlier this year, when the new merger was first announced, I suggested it would be an even worse disaster for consumers than the ill-fated AOL merger was. What Reich dealt with last week was how bad this merger is likely to be not just for consumers, but for the country and the fabric of our society-- yes, that bad.

We’re in a new gilded age of wealth and power similar to the first gilded age when the nation’s antitrust laws were enacted. Those laws should prevent or bust up concentrations of economic power that not only harm consumers but also undermine our democracy-- such as the pending Comcast acquisition of Time-Warner.

In 1890, when Republican Senator John Sherman of Ohio urged his congressional colleagues to act against the centralized industrial powers that threatened America, he did not distinguish between economic and political power because they were one and the same. The field of economics was then called “political economy,” and inordinate power could undermine both. “If we will not endure a king as a political power,” Sherman thundered, “we should not endure a king over the production, transportation, and sale of any of the necessaries of life.”

Shortly thereafter, the Sherman Antitrust Act was passed by the Senate 52 to 1, and moved quickly through the House without dissent. President Harrison signed it into law July 2, 1890.

In many respects America is back to the same giant concentrations of wealth and economic power that endangered democracy a century ago. The floodgates of big money have been opened even wider in the wake of the Supreme Court’s 2010 decision in Citizen’s United vs. FEC and its recent McCutcheon decision.

Seen in this light, Comcast’s proposed acquisition of Time-Warner for $45 billion is especially troublesome-- and not just because it may be bad for consumers. Comcast is the nation’s biggest provider of cable television and high-speed Internet service; Time Warner is the second biggest.

Last week, Comcast’s executives descended on Washington to persuade regulators and elected officials that the combination will be good for consumers. They say it will allow Comcast to increase its investments in cable and high-speed Internet, and encourage rivals to do so as well.

Opponents argue the combination will give consumers fewer choices, resulting in higher cable and Internet bills. And any company relying on Comcast’s pipes to get its content to consumers (think Netflix, Amazon, YouTube, or any distributor competing with Comcast’s own television network, NBCUniversal) also will have to pay more-- charges that will also be passed on to consumers.

I think the opponents have the better argument. Internet service providers in America are already too concentrated, which is why Americans pay more for Internet access than the citizens of almost any other advanced nation.

Some argue that the broadband market already has been carved up into a cartel, so blocking the acquisition would do little to bring down prices. One response would be for the Federal Communications Commission to declare broadband service a public utility and regulate prices.

But Washington should also examine a larger question beyond whether the deal is good or bad for consumers: Is it good for our democracy?

We haven’t needed to ask this question for more than a century because America hasn’t experienced the present concentration of economic wealth and power in more than a century.

But were Senator John Sherman were alive today he’d note that Comcast is already is a huge political player, contributing $1,822,395 so far in the 2013-2014 election cycle, according to data collected by the Center for Responsive Politics-- ranking it 18th of all 13,457 corporations and organizations that have donated to campaigns since the cycle began.

Of that total, $1,346,410 has gone individual candidates, including John Boehner, Mitch McConnell, and Harry Reid; $323,000 to Leadership PACs; $278,235 to party organizations; and $261,250 to super PACs.

Last year, Comcast also spent $18,810,000 on lobbying, the seventh highest amount of any corporation or organization reporting lobbying expenditures, as required by law.

Comcast is also one of the nation’s biggest revolving doors. Of its 107 lobbyists, 86 worked in government before lobbying for Comcast. Its in-house lobbyists include several former chiefs of staff  to Senate and House Democrats and Republicans as well as a former commissioner of the Federal Communications Commission.

Nor is Time-Warner a slouch when it comes to political donations, lobbyists, and revolving doors. It also ranks near the top.

When any large corporation wields this degree of political influence it drowns out the voices of the rest of us, including small businesses. The danger is greater when such power is wielded by media giants because they can potentially control the marketplace of ideas on which a democracy is based.

When two such media giants merge, the threat is extreme. If film-makers, television producers, directors, and news organizations have to rely on Comcast to get their content to the public, Comcast is able to exercise a stranglehold on what Americans see and hear.

Remember, this is occurring in America’s new gilded age-- similar to the first one in which a young Teddy Roosevelt castigated the “malefactors of great wealth, who were “equally careless of the working men, whom they oppress, and of the State, whose existence they imperil.”

It’s that same equal carelessness toward average Americans and toward our democracy that ought to be of primary concern to us now. Big money that engulfs government makes government incapable of protecting the rest of us against the further depredations of big money.

After becoming President in 1901, Roosevelt used the Sherman Act against forty-five giant companies, including the giant Northern Securities Company that threatened to dominate transportation in the Northwest. William Howard Taft continued to use it, busting up the Standard Oil Trust in 1911.

In this new gilded age, we should remind ourselves of a central guiding purpose of America’s original antitrust law, and use it no less boldly. 

Re. the Comcast-TWC deal, Paul Krugman asks: "When and why did we stop worrying about monopoly power?"

"Comcast perfectly fits the old notion of monopolists as robber barons, so-called by analogy with medieval warlords who perched in their castles overlooking the Rhine, extracting tolls from all who passed. The Time Warner deal would in effect let Comcast strengthen its fortifications, which has to be a bad idea."

-- Paul Krugman, in his NYT column today,
"Barons of Broadband"

by Ken

Both Howie and yours truly have registered horror at the prospect that Comcast and Time Warner Cable can actually get away with the plan they hatched -- remarkably stealthily, in this day and age -- for Comcast to swallow up TWC, thereby combining the counry's top two cable-TV and Internet-service providers, which also includes the entire Universal-NBC entertainment and TV complex, extensive phone holdings, and goodness knows what other media froufrous.

I was especially charmed by Comcast CEO Brian Roberts's hilarious assertion that the deal is "pro-consumer, pro-competitive, and strongly in the public interest," when a backward sixth-grader could see that it's designed to be in every way humanly possible anti-consumer, anti-competitive, and profoundly against the public interest.

I suppose our Brian's hilarious cliam falls squarely in the modern-day right-wing comic tradition of dubbing things the exact opposite of what they are. You know, like Fox Noise's side-splitting claim to fair-and-balanced-ness, when its aim and practice, indeed its reason to exist and as a fake-news entity, is to exclude any element (except occasional meaningless window dressing) which even inadvertently hints of any real fairness or balance.

But I'm still thrown by what threw me when I first heard the news reports about the Comcast-TWC deal: that it was made at all, given what I would have taken to be the flat-out impossibility of its passing any of the regulatory hurdles. Nevertheless, given how much the companies have already invested in taking the deal this far, one has to suppose they think approval is not only possible but likely. Um, howzzat?

Paul Krugman to the rescue. I'm relieved to find our Paul sounding kind of flabbergasted himself, as reflected in the first of the two questions he asks about the deal in his NYT column today, "Barons of Broadband":

"First, why would we even think about letting it go through?"

"Broadband Internet and cable TV," Paul points out,

are already highly concentrated industries, with a handful of corporations accounting for most of the customers. Once upon a time antitrust authorities, looking at this situation, would probably have been trying to cut Comcast down to size. Letting it expand would have been unthinkable.

While he's at it, Paul explains the claim advanced by CEO Brian, which on quick hearing sounds sort of reasonable, that his company and TWC aren't competitors, is "transparently disingenuous."

Comcast's chief executive says not to worry: "It will not reduce competition in any relevant market because our companies do not overlap or compete with each other. In fact, we do not operate in any of the same ZIP codes." This is, however, transparently disingenuous. The big concern about making Comcast even bigger isn't reduced competition for customers in local markets -- for one thing, there's hardly any effective competition at that level anyway. It is that Comcast would have even more power than it already does to dictate terms to the providers of content for its digital pipes -- and that its ability to drive tough deals upstream would make it even harder for potential downstream rivals to challenge its local monopolies.

"The point is," says Paul,

that Comcast perfectly fits the old notion of monopolists as robber barons, so-called by analogy with medieval warlords who perched in their castles overlooking the Rhine, extracting tolls from all who passed. The Time Warner deal would in effect let Comcast strengthen its fortifications, which has to be a bad idea.

(Paul also finds it interesting that a standard boilerplate cliché usually advanced to promote megadeals like this, that they advance innovation, has been conspicuously absent from the merger rhetoric. He points out that "a number of experts . . . have argued that the power of giant telecommunication companies has stifled innovation, putting the United States increasingly behind other advanced countries.")

"There are good reasons to believe," says Paul, "that this isn't a story about just telecommunications, that monopoly power has become a significant drag on the U.S. economy as a whole." Which brings us to his other question:

"Second, when and why did we stop worrying about monopoly power?"

There used to be a bipartisan consensus in favor of tough antitrust enforcement. During the Reagan years, however, antitrust policy went into eclipse, and ever since measures of monopoly power, like the extent to which sales in any given industry are concentrated in the hands of a few big companies, have been rising fast.

At first, arguments against policing monopoly power pointed to the alleged benefits of mergers in terms of economic efficiency. Later, it became common to assert that the world had changed in ways that made all those old-fashioned concerns about monopoly irrelevant. Aren't we living in an era of global competition? Doesn't the creative destruction of new technology constantly tear down old industry giants and create new ones?

The truth, however, is that many goods and especially services aren't subject to international competition: New Jersey families can't subscribe to Korean broadband. Meanwhile, creative destruction has been oversold: Microsoft may be an empire in decline, but it's still enormously profitable thanks to the monopoly position it established decades ago.

Moreover, there's good reason to believe that monopoly is itself a barrier to innovation. [Susan] Crawford [of Benjamin N. Cardozo School of Law, author of the recent book Captive Audience] argues persuasively that the unchecked power of telecom giants has removed incentives for progress: why upgrade your network or provide better services when your customers have nowhere to go?

And having the economy structured this way, suggests Paul, "may be playing an important role in holding back the economy as a whole."

One puzzle about recent U.S. experience has been the disconnect between profits and investment. Profits are at a record high as a share of G.D.P., yet corporations aren't reinvesting their returns in their businesses. Instead, they're buying back shares, or accumulating huge piles of cash. This is exactly what you'd expect to see if a lot of those record profits represent monopoly rents.

This is, I think, a vastly more helpful response to the news of the Comcast-TWC deal than my own Rip Van Winkle-ish assumption that they can't do that, can they? All that's left is the traditional Krugman Klincher:

It's time, in other words, to go back to worrying about monopoly power, which we should have been doing all along. And the first step on the road back from our grand detour on this issue is obvious: Say no to Comcast.

I guess we'll have to see whether they can do that. I'm just relieved to find that I'm not the only one who just assumes that not so long ago there wouldn't have been any question that they couldn't.

#

How Bad Is The Comcast Acquisition Of TimeWarner For Society?

In his 1995 article for Business On A Small Planet, Corporations and the Public Interest, Jonathan Rowe helped put the intent behind the rise of corporations into a perspective that has been lost over the decades. "When I was a law student in Philadelphia," he writes, "I was hired by the owner of a small local radio station to look into the original corporate charters of the Penn Central Railroad (originally the Pennsylvania Railroad). The Penn Central was in the process of ending its passenger service, and the man who hired me wondered if the railroad didn’t have a legal duty of some kind to continue it. What I found truly surprised me. The charter spelled out clearly that the corporation had an obligation to serve the public by providing passenger service. That was the condition for the privilege of operating in the corporate form, and also for the generous grants of land it received from the legislature."

This was true of the early corporations generally. Their charters asserted that they existed first and foremost to serve the public. That was their reason for being.

In fact, the first corporations in the Anglo-American tradition had nothing to do with profits. Much as it might cause free market fundamentalists to squirm, the original corporations were actually regulatory agencies, such as guilds, or local governments such as townships. (In New England, when you drive from one town into another you pass a sign that announces the year in which the town you are entering was "incorporated.")

Later, the British Crown adapted the corporate form to what we would call today a "public-private partnership." The Queen wanted to lay claim to the New World, but such ventures required huge amounts of capital, and were risky in the extreme. To amass the capital, there was a need to insulate investors from responsibility for the undertaking, beyond the amount of their investment. Thus the "joint stock company" was born.

Individual responsibility is one of the bedrock principles of common law. To dilute this principle was an extraordinary step, one that was conceivable only for a mission that presumably served the public good. In other words, there was a direct link between the exemption from individual responsibility for corporate investors (and later officers), and the public good that the corporation was chartered to carry out.

This legal tradition carried over to the American colonies. It gave rise to the corporate charters that the state legislatures bestowed one by one, and only for specific undertakings. (Think of Amtrak as a rough modern-day equivalent, including the subsidy.) This was the form of corporation the framers of the Constitution had experienced. It was totally a state matter, and nothing for the new federal Congress to worry about.

Predictably, there was a lot of patronage and corruption in the granting of charters, which in effect were private monopolies. There also were boondoggles of the first order, the railroad land grants being a prime example.

By the middle years of the 19th century, the nation’s commerce was bursting at the seams. What historians now call "Jacksonian Democracy" gave political expression to these impulses-- the resentment of special privilege and the explosive growth of commerce. Corporations became a prime target of political attack; not to curtail or abolish them, or to reinforce the original bargain, but rather to extend the privileges of incorporation to everyone.

Up close, this Jacksonian Democracy could look a lot like an S&L convention in the ’80s. One after another, the state legislatures enacted "free incorporation laws," which democratized the corporate form. No longer did legislatures have to charter corporations by special act. No longer were corporations limited to specific activities that served the public. Now anyone could form one, to do anything they wished. Market ideology said that simply seeking gain would, under the dispensation of the Invisible Hand, serve the public good.

Thus US Steel and Standard Oil and the like were born on a wave of what might be called today "liberal permissiveness." Several decades later, the Supreme Court completed the coup by declaring, with little basis in law or history, that the Fourteenth Amendment applied equally to corporations, making them legal "persons" with all the Constitutional rights and privileges of human beings.

The important point is that the free incorporation laws tore up the original bargain that was the basis of the corporate form. Corporations no longer had to serve the public. They could do anything they wanted. But they still enjoyed the extraordinary exemption from individual responsibility that they had obtained historically only because they would serve the public.

More recently, writing for Alternet, Thom Hartmann, an expert on the depredations of corporations-run-amuck, reminds us that doing business is a privilege, not a right: "In order to do business you, or you and a group of participants, must petition a Secretary of State for a business license."

If your petition is granted, you will be given to set of privileges ranging from the ability to deduct from your income taxes the costs of your meals (if you discuss business), to a whole variety of special tax breaks, incentives, and immunities from prosecution for things that, had you done them as an individual, you might otherwise go to prison for.

When we set up this country more than 200 years ago, we established some of these privileges, and associated with them some pretty heavy responsibilities.

Up until the 1890s, a corporation couldn’t last more than 40 years in any state-- which prevented them from being used as a tool to accumulate massive and multigenerational wealth. A corporation had to behave in the public interest, and when they weren’t, thousands of them every year were given the corporate death penalty, their assets dissolved and their stockholders losing everything (but nothing more than) they had invested.

Over the years, as the Supreme Court has given more and more power to wealthy individuals and corporations, these responsibilities receded so far into the background that in one state, Delaware, your articles of incorporation can be a single sentence stating that you intend to “Do whatever is legal in the state of Delaware.” Which is probably why more than half of all the companies listed on the New York Stock Exchange are Delaware corporations.

The reason we originally allowed businesses to do business in this country was that some benefit would come to society from it. But since the era of New Deal economics was replaced by Reaganomics, the principal rationalization we use to give limitations of liability and privileges to corporations and their masters has changed from, “What is best for society?” to, “How can somebody best get rich quick?”

This is a perversion of the entire concept of why nations allowed people and corporations to do business, and why we facilitate that activity by providing at public expense: stable currencies and a stable banking system; predictable and fair court systems; transportation, electrical, water, septic, and communications infrastructure; a criminal justice system to enforce the rules of the game of business; and a workforce educated at the public expense and protected with a public pension called Social Security. We do all these things so the business will provide some good to the public while, in the meantime, enriching its owners.

But a new business model has emerged in the United States. Companies still get the privileges, but they no longer have to conduct themselves in ways that inure a net positive to the public.

On Friday, Ken examined the TimeWarner/Comcast merger from the perspective of an intended victim of the deal: "My first thought," he wrote, "on hearing of Comcast's acquisition Time Warner Cable (which as far as I can tell is a more accurate description than a 'merger' of the country's no. 1 and no. 2 cable-TV companies) was: They're not gonna let that happen, are they? By 'they,' I guess I meant the FCC, the FTC, the Justice Department's Anti-Trust Division-- whoever would have to sign off on a corporate conglomeration that would turn two pretty powerful players in the cable industry into one behemoth. It's just not possible, is it? My second thought was: Well, they spent a lot of time and billable lawyer hours negotiating the deal, so they must think they can somehow slip it past the regulators?" Ken forgot to mention that the cable companies are determined to charge $200/month by 2020 and the merger will make that even easier.

As Ken pointed out, he's an East Coast victim of TimeWarner Cable; I'm a West Coast victim of TimeWarner Cable. I'm also a former divisional president of TimeWarner. In its heyday, employees had every reason in the world to be proud of the company, it's commitment to serving its employees, its customers and the public. The father of the company, Steve Ross, who died in 1992, was considered a visionary. He was also a sharp businessman who made his shareholders gigantic returns on their investments and built a gigantic company with an eye on sustainability. And for the people who worked for him, he had a very clear message. We would prosper so long as we took the interests of our shareholders, our employees, our artists, our customers and the society around us into account. I heard about the concept of stakeholders from Steve. And we took that seriously. His vision ended on January 10, 2000 when Jerry Levin and Dick Parsons sold the company to huckster and financial predator Steve Case of AOL. An aggressive gnat swallowed a whale and the stakeholders were suddenly the enemy. Within 15 minutes of meeting Steve Case for the first time I decided to retire at the ripe old age of 52. He had a vision too-- screwing the shareholders, the employees, the artists, the customers and society. Gone were the days that TimeWarner was the biggest contributor to the Democratic Party and to progressive initiatives in the United States. TimeWarner would never again be a force for good-- just a force for ripping off everyone it came in contact with. Last week a supervisor suggested to one of my neighbors that she dump her cable system and get DirectTV.

Friday, writing for AP, Ryan Nakashima explained the consumer outrage around the Comcast acquisition of TimeWarner Cable. "Comcast and Time Warner Cable regularly rank at the bottom of the pay TV industry when it comes to customer satisfaction. So it didn't take long for customers to vent frustrations online over high prices, spotty service and fears of a monopoly after Comcast announced its $45 billion purchase of Time Warner Cable… Consumers [and not just Ken] weren't buying the assertion of Comcast CEO Brian Roberts that the combination, which will have 30 million TV and Internet subscribers, would be 'pro-consumer and pro-competitive.'"

Using a contorted logic, the two companies are expected to argue to anti-trust regulators that the fact they don't directly compete against each other in many parts of America shows the deal won't reduce competition and therefore should be approved.

But it is that lack of overlap, and lack of choice, which is at the root of customer frustration, according America Customer Satisfaction Index managing director David VanAmburg. Cable companies that purposely don't compete against each other to provide fast Internet or reliable TV service can get away with not fully meeting customer needs in markets where they dominate.

"It's almost subconsciously built into their business model that they don't have to worry so much you're going to leave for a competitor," said VanAmburg. "It's definitely a big factor."

Most people think the Justice Department shouldn't allow the merger. Most people are right-- but that won't matter one jot. Michael Noll at cnet.com seemed more fatalistic about the ability to stop it and is hoping the Feds at least force a spin-off of the content business. Like everyone who doesn't get a fat paycheck from one of the two companies, he asserts that the claim that the merger will benefit consumers is "nonsense." That's got to be a contender for 2014's understatement of the year. "One perspective on this is the distinction between conduit and content. Verizon's optical fiber or Comcast's coaxial cable is the conduit over which video, Internet, and telephone services are carried to our homes. The television programs we watch are the video content.

At the local level, there is conduit competition between the cable company (Comcast or Time Warner Cable) and the telephone company (Verizon or AT&T). But there's no competition between Comcast and Time Warner Cable or between Verizon and AT&T. These supersize firms have carved up the United States, with each sharing the provision of the conduit with the other-- what is called a duopoly. Government believes duopoly is better than monopoly.

The problem is that the cable companies own content-- the telephone companies do not. For example, Comcast owns NBC, Universal Pictures, and cable networks; Time Warner Cable owns CNN, HBO, and Warner Brothers. An acquisition of Time Warner Cable by Comcast would create a gigantic content business with incredible control over content pricing, packaging, and programming. And this supercontent is what the telephone companies would be forced to purchase to resell to their customers.

Decades ago the cable television companies were allowed to own both the cable conduit and also content providers. Government allowed this as an incentive to the fledgling cable companies. But today cable companies are far from fledgling, and past polices need to be revisited in light of today's realities.

Another perspective on this is the use of the Internet to go directly to video content providers, thereby bypassing the video provided by the cable company. This is a threat to the lucrative video business of the cable company. One way to counter this threat is to own as many content providers as possible and stipulate and control access to the content. This proposed acquisition would create a supersize content provider with tremendous market domination and control.

Monopoly might be evil and duopoly a little better. But the combination of conduit and content on the scale of this proposed acquisition would truly be evil squared. Decades ago, movie theaters (the conduit) and movie producers (the content) had to be separated and broken apart. It is time again for government to separate conduit from content and break up the power of the cable companies. If government allows this acquisition, as a condition the content business must be spun off.

Comcast's CEO must just be kidding when he calls swallowing up Time Warner Cable "pro-consumer, pro-competitive, and strongly in the public interest"

by Ken

My first thought on hearing of Comcast's acquisition Time Warner Cable (which as far as I can tell is a more accurate description than a "merger" of the country's no. 1 and no. 2 cable-TV companies) was: They're not gonna let that happen, are they? By "they," I guess I meant the FCC, the FTC, the Justice Department's Anti-Trust Division -- whoever would have to sign off on a corporate conglomeration that would turn two pretty powerful players in the cable industry into one behemoth. It's just not possible, is it?

My second thought was: Well, they spent a lot of time and billable lawyer hours negotiating the deal, so they must think they can somehow slip it past the regulators?

And my third thought was: Uh-oh. You see, I'm a TWC of NY/NJ customer. (And for that matter, Howie on the opposite coast is also a TWC customer.) Next to my rent, my TWC bill is my biggest monthly bill -- and I haven't figured any way of lowering it, even as TWC keeps managing to find ways for that bill to keep movin' on up. From everything I know about Comcast, I ain't seen nothin' yet. Since cable companies aren't subject to any price limitation, TWC is already charging about as much as it thinks it can get, but I can't help feeling that Comcast's approach to billing, and to customer service as well, is going to make me look back on TWC as a veritable philanthropic enterprise.

The last time I tried to make a dent in my monthly outflow for cable TV and Internet access, some years back, I yielded to the siren song of the "triple-play" package, turning my phone service over to TWC as well. I had all kinds of numbers thrown at me, telling me how much I would save. When the billing dust settled, I counted myself lucky that at least I wasn't paying any more than I had been for cable, Internet, and phone service.

Of course there was the small matter of the phone that no longer rings. I discovered that even while the installer was still on the premises, but he insisted that nothing he did could have caused that, which ended the discussion, even though that phone had been ringing normally before my service "upgrade." And oh yes, the router I was provided during that installation to handle all the services -- a couple of years ago we got a notice that as of such-and-such date it would become a rental item, with a nice little chunk of $$ to be added to my monthly bill. Add in the cost of the router, and my guess is that I am now paying more for the "package" that I'd be paying for the separate services.

Still, I have to say, all in all I'm not displeased with the actual service provided by TWC. I get a pretty darned fine TV picture, and having after more or less overlappingly swapped out all my old cable boxes and upgraded two of my three TVs to HD, they're all working fine. A couple of those boxes at least should probably have been replaced years ago, but I've always been afraid to ask the Customer Service people for anything, since somehow it always seems to wind up costing me money. In fairness, though, TWC has insisted since the introduction of HD that customers wouldn't pay any more for it than for previous service, and they've made good on that promise both in my switching out of boxes and in my billing. I even now have a box on my remaining CRT TV that will provide HD service if and when I upgrade that TV.

What people in other parts of the country often don't realize is that in much of NYC, especially Manhattan, cable TV isn't a luxury, it's a necessity if we want to have a watchable TV picture. And for most of the city, our only choice is none other than TWC -- or whatever the new entity is going to be.

And The New Yorker's John Cassidy says (in a newyorker.com post, "We Need Real Competition, Not a Cable-Internet Monopoly," that "by far the most important" reasons why we Americans pay so much more than people pretty much anywhere else for those "triple-play" services -- and he provides some eye-popping numbers -- are "compettion and competition policy."

In countries like the U.K., regulators forced incumbent cable and telephone operators to lease their networks to competitors at cost, which enabled new providers to enter the market and brought down prices dramatically. The incumbents -- the local versions of Comcast, Time Warner Cable, Verizon, and AT&T -- didn't like this policy at all, but the regulators held firm and forced them to accept genuine competition. "The prices were too high," one of the regulators explained to the media writer Rick Karr. "There were huge barriers to entry."

That quote accurately describes the situation in the United States today, where vigorous competition is almost non-existent. In some big cities, broadband consumers have a choice between a cable operator, such as Comcast, and a telephone provider, such as Verizon. But that's practically no choice at all. Although the cable and telephone companies spend huge sums of money on advertising trying to lure each others customers, they rarely compete on price. To use the economic jargon, they act as a cozy "duopoly," keeping prices well above their costs. Many people, myself included, don't even have two options to choose from. On my block in Brooklyn, Verizon's high-speed FiOS service isn't available yet, so I'm stuck with Time Warner. (And, no, they don't rush out to repair the frequent outages.)

And, says John, "This sorry situation isn't an accident."

It's the predictable outcome of Congress bowing to the monopolists, or quasi-monopolists, and allowing them to squelch potential competitors. "Americans pay so much because they don't have a choice," Susan Crawford, a former adviser to President Obama on science and innovation, and the author of a recent book, "Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age," told the BBC. "We deregulated high-speed internet access ten years ago and since then we've seen enormous consolidation and monopolies… Left to their own devices, companies that supply internet access will charge high prices, because they face neither competition nor oversight."

And Comcast, he argues, "is one of the big consolidators and overchargers." He provides some cases in point, and says, "No wonder Comcast's stock price has quintupled since 2009. (Time Warner Cable's stock has gone up even more.)"

John begins his piece by talking about Comcast.

Comcast Corporation is America's biggest cable company, its biggest internet-service provider, and its third-biggest home-telephone provider. As the owner of NBCUniversal, it's also one of the largest producers of programming for film, cable, and television; on NBC's networks, it is currently showing the Olympics. It's not just big by American standards. It's the largest media company in the world. In 2013, it took in $64.67 billion, generating $13.6 billion in operating income and $7.1 billion in net profits.

"Now," he says, "this behemoth wants to get even bigger," and he gives Comcast CEO Brian Roberts "some marks for chutzpah. In announcing the TWC deal, John says, Roberts "brushed aside concerns that the regulators and anti-trust authorities might veto the deal, describing it as 'pro-consumer, pro-competitive, and strongly in the public interest.' "

"Pro-competitive" is obvious nonsense, and since one clear intent is to put all of both companies' customers at their mercy, "pro-consumer" seems even more nonsensical. And "strongly in the public interest"? Yeah, sure.

"What we need," says John Cassidy, "is a new competition policy that puts the interests of consumers first, seeks to replicate what other countries have done, and treats with extreme skepticism the arguments of monopoly incumbents such as Comcast and Time Warner Cable."

"But will we get it?" he asks, and points out that the new FCC chairman, Tom Wheeler, "is a former lobbyist for two sets of vested interests: the cell-phone operators and, you guessed it, the cable companies."

Wheeler took office in November, after seeing his nomination to head the F.C.C. criticized in many quarters, including this one. He has pledged to do all he can to defend the public interest. He's said that his motto will be "competition, competition, competition." If Wheeler means what he says, this is a good opportunity for him to demonstrate it. He could start by tossing out the merger as another self-serving scheme and announcing that he's flying to London to find out how the British managed to introduce some real competition. That would give Brian Roberts and his fellow cable guys something to think about.

#

Time Warner And Media Fascism In America

Yesterday, on my travel blog, I documented how Emirates, which hypes itself as a first-rate international airline, unceremoniously dumped all its L.A.-bound business class passengers flying from Cochin in Dubai so the airline could sell their seats to other customers. I was one of those travelers and I was forced to spend 24 unscheduled hours in Dubai. Aside from visiting the world's biggest-- and most garish-- shopping mall, I spent much of my time watching Al-Jazeera. I don't get the station in L.A. but I do watch it online and find it far more informative and in-depth than CNN International and usually better than the BBC. 

While I was away, Ken did an update about how Al-Jazeera is buying Al Gore's Current TV, explaining how the purchase is meant to "provide the pan-Arab news giant with something it has sought for years: a pathway into American living rooms." What Ken didn't get into is how Time Warner immediately announced they are kicking Current TV off their cable systems. Globalvision's Danny Schecter, a founder of Mediachannel.org, explained what this means and why Americans should be paying attention. "Why," asks Schecter, "does our media system attract so many uninformed and unbrave people who are locked into such predictable and parochial attitudes? Do they have an agenda that the public is unaware of?"

Take Time Warner. Remember how it initially would not run the then new red white and blue Fox News on its platform in New York City, forcing it to cough up a high "per-subscriber fee" to get on the air? That was a clear commercial dispute with a bit of extortion thrown in, an attempt to protect their news channel, CNN, from being challenged.

Now that Al Jazeera has bought Current TV, a channel shown on Time Warner cable, the Time Warner megacorp became the first system operator out of the box to say it would not carry the new news channel that the Qatar-based network wants to launch in America, in much the same way that BBC set up BBC America to offer its programming to US viewers.

Even as Time Warner carries Russia Today, CCTV out of China and other foreign-owned channels, it is excluding this channel before they even know what it will offer. This could be a ploy to jack up licence fees-- a la Fox News-- but there is probably more to it.

In reporting on the deal: Fox first focused on how much money-- $100 million-- it claims that Al Gore, an early investor in Current, will make for his 20 percent stake in the network. Bashing Democrats is always Fox's first priority (it now turns out that Glenn Beck wanted to buy Current, but Gore went with Al Jazeera).

Fox does not report on rumours that its owner Rupert Murdoch and his Saudi partner Prince Walid visited Al Jazeera and reportedly were interested in buying the channel, or that Al Jazeera frequently exposed bogus pro-US military propaganda that Fox carried as news during the Iraq War.

You will recall that an Al Jazeera reporter was killed by the US military in Baghdad and their Kabul office was bombed, while one cameraman was held for years in Guantanamo on charges that were never proven. You may remember that George Bush joked about bombing Al Jazeera's headquarters in Doha, a threat that was idiotic since Qatar allowed the Pentagon to base troops and run its Coalition Media Centre there (I covered this story in my film WMD Weapons of Mass Deception and two books, Embedded and When News Lies, 2006).

A major supplier of natural gas to the US, Qatar has moved even closer to the US and was allied with Washington in the war in Libya, and now on Syria, that Al Jazeera seems to be covering sympathetically.

But Fox News has a habit of not letting facts get in the way of its coverage, reporting that many Americans "feel" it's a terrorist network perhaps because Al Jazeera to them, idiotically, sounds like al-Qaeda (and because this "feeling" is always being reinforced by bombastic pundits who are scoring political points, not making factual statements). There is no evidence to support this claim.

Fox reports:

Al Jazeera has been criticised for having a pro-Islamist bent, and accused of working with members of al-Qaeda. One of its journalists was arrested in Israel in 2011 on suspicion of being an agent of the Palestinian group Hamas.

(That was Samer Allawi, their Kabul bureau chief, who was later released, a fact Fox ignores when Israeli suspicions proved groundless.)

Fox's "report" goes on: 

Dave Marash, a former Nightline reporter who worked for Al Jazeera in Washington, said he left the network in 2008 in part because he sensed an anti-American bias there.

As it turns out, I spoke with Marash (who I worked alongside at ABC News) about why he left and he said it had more to do with his wanting to report with his wife from the field and not be stuck in an anchor chair.

Last year, the media website Newser reported that Marash still respects Al Jazeera, the opposite of what the Fox article insinuates.

He is quoted as saying:

The product is too good, too significant, to not have a market in the US, given the complete abdication of American networks and cable channels from actually covering international news.

... The current situation is "tragic", in his view. It plays into the ignorance of American viewers, most of whom are clueless as to what the world thinks and why. It's very harmful to America's effectiveness and stature in the world.

So once again, Fox's smears and aversion to the truth misrepresents the situation. So, what is behind the knee-jerk reaction by Time Warner?

Can it have to do with the business Time Warner does with Israel, a country that, incidentally, allows reporters from Al Jazeera to work there and broadcast their reports?

When it owned AOL, Time Warner was active in an Israeli business.

The Jerusalem Post reported: 

Three US companies that invest in Israel-- AOL Time Warner, IBM and Rupert Murdoch's News Corporation-- were lauded at the America-Israel Friendship League's Partners for Democracy Awards dinner.

So, yes, Time Warner has been very friendly to Israel with top executives aligned with Israeli charities and fundraisers, and some correspondents accused of bias. CNN's Wolf Blitzer of the Situation Room once ran the Israeli lobby group AIPAC, but the charges that CNN has slanted the news is disputed and has become part of the larger debate about the pro-Israel orientation of almost all US TV outlets. Murdoch even blasted CNN for anti-Israel bias.

Schecter's co-founder of Mediachannel.org/,Rory O'Connor, also took a shot at explaining the TimeWarner situation in a post he did, Welcome to America, Al Jazeera. Like me, O'Connor finds Al Jazeera "one of the best cable news networks in the world: and points out that it "has always had a tough time in the US."

It's long been derided by conservatives here as a "terror network" and propaganda organ. It's been widely denounced by publicity-seeking politicians for airing messages from al-Qaeda. Its reporters have been imprisoned in the Guantanamo gulag for years before being released after having never been tried or convicted of any terrorist ties. Others have been targeted by US forces in both Afghanistan and Iraq, shot at, had missiles fired at them, and even killed.

As a result-- despite massive lobbying and advertising campaigns-- most major cable and satellite television network in the US have refused to offer Al Jazeera's English-language service to their audiences ever since its inception six years ago. Instead, it's clearly been blacklisted and made almost impossible to find on America's airwaves.

Now, in the most American of solutions, the pan-Arab news leader has gone ahead and simply bought its seat at the media table, with the purchase of Current TV, a low-rated cable channel founded by former US Vice-President Al Gore and his partners seven years ago. For the relatively small sum of $500 million, it has just bought entree into at least 40 million cable-ready living rooms all across the US.

Welcome to America, Al Jazeera!

Sounds good, right? And it is, both for American audiences, starved for real news about what's going on in the world around them but plagued instead with a surfeit of gossip, celebrity doings and opinionated bloviators from both the right and left on such putative cable "news" channels such as Fox and MSNBC, and for Al Jazeera itself, which will only extend its global influence by finally gaining a foothold in two crucial American marketplaces-- that of commerce, of course, but also that of ideas. 

...[T]he outlook is not entirely rosy for Al Jazeera's entry into America. For one thing, the powerful Time-Warner cable system, America's second largest cable company with 12 million subscribers in New York, the largest media market in the US, used the occasion of the sale to drop its carriage of Current. That means AJA is not yet guaranteed access to Time-Warner's subscribers, unlike those of such other major distributors as Dish, DirecTV, Comcast, Verizon and AT&T, which did consent to the acquisition.

Although Time Warner executives said the channel wasn't removed for political reasons, and that their decision had more to do with Current's low ratings, many were quick to see a conspiracy and politics at play, and a firestorm of protest rapidly spread through social media. Late on January 3, as it continued, Time Warner Cable issued a statement that opened the door to carrying Al Jazeera America in the future. "We are keeping an open mind, and as the service develops, we will evaluate whether it makes sense, for our customers, to launch the network," the statement read.

Sounds like the smooth lies Air Emirates told me when they chiseled me out of my flight back to Los Angeles Saturday. Sleazy Arabs always tell you what you want to hear to shut you up and get you out of their hair-- just like sleazy Time Warner executives. Is that fair for me to say? Sure, I used to be a divisional president at Time Warner, I know exactly how they operate.




A NOTE FROM KEN

I find this development quite interesting and fairly unsurprising. When I wrote the post Howie refers to about the Current sale to Al Jazeera, I thought about this possibility a lot. Apparently Al Jazeera's interest in the deal was based on the assumption that buying Current would give it access to all those cable systems, but what made the Al Jazeera people assume that all, or any, of those cable systems would carry their new channel? We know how precious even crappy cable slots have become, and we get frequent glimmerings of the shenanigans involved in procuring them.

I figured we would find out eventually how many of those cable slots Al Jazeera would hold onto. I just didn't expect "eventually" to be this quick.

#

What's Occupy Got To Be Mad About?

George Martinez, censored by TimeWarner

We'll be talking about Brooklyn in a moment, but first I want to take a look at a story from last year in the Daily Telegraph by Daniel Hannan, a Conservative Member of the European Parliament. It was a memo to the Occupy movement about what "we evil capitalists really think." He lists 10 because he claims right-wingers like himself are badly misunderstood. And some of what he's talking about can be valuable for progressive congressional candidates here in America who need to pick up votes from people who have been brainwashed by Fox and Hate Talk Radio. Especially his schpiel-- points number 1 and 2-- on the bankster bailouts-- whether the mother-of-all Bush bailouts or this past weekend's Spanish bailout.

1. Free-marketeers resent the bank bailouts. This might seem obvious: we are, after all, opposed to state subsidies and nationalisations. Yet it often surprises commentators, who mistake our support for open competition and free trade for a belief in plutocracy. There is a world of difference between being pro-market and being pro-business. Sometimes, the two positions happen to coincide; often they don’t.

2. What has happened since 2008 is not capitalism. In a capitalist system, bad banks would have been allowed to fail, their profitable operations bought by more efficient competitors. Shareholders, bondholders and some depositors would have lost money, but taxpayers would not have contributed a penny.

We'll let his utter cluelessness on the Laffer Curve slip by, as well as his delusions of a flat tax without loopholes. He called himself a right-winger so... well, you can't expect a lot. But he does claim that "those of us who believe in small government are not motivated by the desire to make the rich richer. We’re really not... [and] we are not against equality... Our objection is not that egalitarianism is undesirable in itself, but that the policies required to enforce it involve a disproportionate loss of liberty and prosperity." Ah, now we're getting to what makes rightists reprehensible and why their ideals always lead them to taking anti-democracy stands. And don't worry that I've left off the other half of his points. They're all basically rubbish that you've heard before. Instead, I want to move to a reason Occupy movement people-- and those they represent-- do hate the Establishment... and Hannan misses that point, the it isn't rightists that are held in such contempt, but the Establishment, the voice, and muscle, of conservatism-- regardless of the partisan divide-- who are the enemies of progress for ordinary working families. And that's where Brooklyn comes in. I've mentioned George Martinez before, the Occupy activist who decided to take on the grotesquely corrupt Brooklyn Democratic Machine and their dueling congressional candidates, incumbent Nydia Velázquez and Erik Dilan. George is running a people-powered congressional race, a veritable "grassroots experiment of participatory democracy." and isn't engaging in the classic money-grubbing politics that has ceded our whole system over to the corporations and to hereditary billionaires. But local TV station NY1 just banned him from participating in the district's debate-- for exactly that reason: he hasn't raised enough money. He raised enough signatures to put him on the ballot... isn't that enough? Not TimeWarner, apparently.

“Our longstanding policy at NY1 when we’ve held debates is to give seats to candidates who we consider to be viable…who are on the ballot…[and] getting donations from voters in the district and spending the money on basic campaign expenses,” said Bob Hardt, Political Director at NY1, which is owned by Time Warner Cable company.

While Mr. Martinez has indeed been approved by the Board of Elections, and submitted all required Federal Elections Committee (FEC) paperwork, he was not required until recently to submit an FEC financial disclosure form because his campaign had succeeded in getting nearly 3,000 signatures and his place on the ballot without spending the minimum disclosure amount of $5,000. To us, this represents a victory for people-powered, grassroots politics, not a lack of “viability”!

Over the course of the day yesterday, hundreds of people spoke out in support of Mr. Martinez and against the censorship that NY1 would impose by barring a candidate from a debate because of the amount of money his campaign has/hasn’t raised. The group had planned a rally and press conference at NY1’s Chelsea Market studio this afternoon, with allies from OWS.

Where does that rate for Occupy on the reasons-to-be-pissed-off meter? If you'd like to help George raise the small amounts of money he does need, you can do it here on our ActBlue page.

How A TimeWarner Power Play In North Carolina Threatens The Core Of American Democracy

TimeWarner was once a very reputable company. I can be really proud to say I was once president of one of their divisions. Then AOL bought it. I couldn't imagine a corporate culture degenerating so rapidly. Once a model of corporate good governance that consciously sought to align the interests of shareholders with employees, customers and society, AOL's primitive instincts turned TimeWarner into the untrustworthy mess it is today. The company's valuation reflects that change. Taking splits into account, the company once traded at over $250 a share. Today, a much-diminished company, it's lucky to be over $30 a share. TimeWarner was once the single-biggest contributor to progressive causes (and the Democratic Party) of any company in America. Today TimeWarner is like an amalgam of what Thomas Jefferson and Franklin Roosevelt warned America about in regard to corporations. Jefferson on the power of corporations:

"I hope we shall take warning from the example of England and crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our Government to trial, and bid defiance to the laws of our country."

We didn't take warning and the situation got exponentially worse until corporate barons with familiar names-- duPont, Bush, Rockefeller, Morgan...-- attempted a right-wing coup d'etat against President Roosevelt. FDR's warning, of course, sounds even more contemporary:

"The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic State itself. That, in its essence, is Fascism-- ownership of government by an individual, by a group or by any controlling private power."

What does this have to do with TimeWarner? Glad you asked. Tim Karr sent me this extremely disturbing news from Charlotte, North Carolina.

North Carolina has a long tradition of self-help and self-reliance, from founding the nation's first public university to building Research Triangle Park. Befitting the state's rural heritage, North Carolinians routinely take self-help measures to foster economic growth and provide essential local services such as drinking water and electric power.

Statesville built the state's first municipal power system in 1889, and over the years 50 North Carolina cities and towns followed suit. In 1936, the state's first rural electric cooperative was launched in Tarboro to serve Edgecombe and Martin counties. Today, 26 nonprofit electric networks serve more than 2.5 million North Carolinians in 93 counties.

Strangely, this self-help tradition is under attack. The General Assembly just passed a bill to restrict municipalities from building and operating broadband Internet systems to attract industry and create local jobs. Although pushed by the cable and telephone lobby, similar bills were defeated in previous legislative sessions. But the influx of freshmen legislators and new leadership in both houses created an opening for the dubiously titled "Level Playing Field" bill (HB 129).

No one disputes the importance of broadband access for economic growth and job creation. That's why five cities-- Wilson, Salisbury, Morganton, Davidson and Mooresville-- invoked their self-help traditions to build and operate broadband systems after years of neglect from for-profit providers, which focus their investments in more affluent and densely populated areas. Not coincidentally, all five cities own and operate their own power systems or have ties to nonprofit electric cooperatives.

(While the bill does not outlaw these five municipal networks, it restricts their expansion and requires them to make annual tax payments to the state as if they were for-profit companies.)

How does a state that values independence, self-reliance and economic prosperity allow absentee-owned corporations to pass a law essentially granting two industries - cable and telephone-- the power to dictate North Carolina's broadband future? This question will be moot if Gov. Beverly Perdue exercises her veto power and sends this bill where it belongs: to the dustbin of history.

However, if the bill is signed into law, its passage could embolden the cable/telco lobby to take aim at the state's many independent, nonprofit broadband networks, primarily in the most rural areas. These networks, with little fanfare or publicity, have made real progress in addressing the rural broadband crisis over the last decade.

These nonprofits include traditional rural electric and telephone cooperatives as well as more recent start-ups such as Mountain Area Information Network (MAIN) and ERC Broadband, both based in Asheville. MAIN launched in 1996 to provide dial-up Internet access via a local call in some of the region's most remote communities. Prior to this, many mountain residents had to call long-distance to reach the Internet.

The catalyst for ERC Broadband's launch in 2003 was the possible loss of the National Climatic Data Center, which was looking to relocate to a community with more abundant and affordable broadband access. This homegrown fiber network helped keep NCDC and its high-paying jobs in Asheville. ERC's success helped spawn a second nonprofit fiber network, PANGAEA, serving Polk and Rutherford counties. Likewise, the Eastern Band of the Cherokee and a local software firm in Franklin joined forces to launch a third fiber network, BalsamWest, to serve the mountain counties west of Asheville.

This corporate assault on North Carolina's heritage of self-help and self-reliance is all the more bizarre because these out-of-state cable and telephone carriers have begun using the state's nonprofit networks, both rural and municipal, to supplement their network capacity and reduce their bandwidth costs. Common sense dictates that this corporate power-grab should end with a stroke of the governor's pen.

At least it's a Democratic governor... so there's a chance that she'll stand up to what Jefferson and Roosevelt clearly defined as an existential threat to our democracy.

Coaches are hired to be fired -- it's just more fun when it's pipsqueak Dan Snyder's team imploding

The little pipsqueak -- er, the "cool guy" with the shades, that's world-class scumbag Daniel Snyder. The other guy, that's . . . well, he's nobody now. He used to be the Redskins' head coach. Don't worry about him.

by Ken

Thank goodness for the Washington Redskins, say I as a New York Giants football fan. It's been a rough football season here in the Big Apple. After that deceptive 5-0 start, the Giants came on to show just how fine a coach the New Tom Coughlin is and veritably stank their way to an 8-8 finish. (Somehow the Jets slipped into the playoffs, but I don't know anyone who takes them seriously.)

We're a tough breed, though, us NY-ers. As bad as the Giants sucked, there has been much entertainment value this season in the truly disastrous performance of our sometime division rivals the Redskins. And there's plenty of fun in watching the Skins in agony, because you know the digestive tract of former-boy-wonder but permanent-scumbag owner Dan Snyder must be dripping acid like a leaky battery. Hurray!

Okay, it means Scumbag Dan gets to fire somebody, which probably makes his day, making him feel like some kind of a big deal. You just have to hope that reality has seeped into this awareness enough that on some level he knows how grotesquelly incompetent he has proved at running an NFL franchise, especially one as visible as the storied one in our nation's capital.

Today was the day, after a season-long death watch, when Scumbag Dan's people dropped the ax on Skins head coach Jim Zorn. They're talking about Mike Shanahan taking over, with presumably full control of the football operation, Scumbag Dan supposedly having learned his lesson. Only the Scumbag Dans of the world don't usually learn lessons, at least not the right ones. So for this Skins-hater, the idea of Shanahan working for Scumbag Dan -- I say, "Bring it on!" That should provide us Giants fans with a measure of comic relief during the struggles of whatever bozo our genius management comes up with to replace the New Tom Coughlin.

TIME WARNER CABLE PLAYS CHICKEN WITH RUPERT M

What made the Giants' season doubly hilarious was the high-stakes game of chicken Time Warner Cable was playing with a scumbag who makes Scumbag Dan look like a choirboy, Rupert Murdoch. (I believe that in some translations of the Bible Rupert makes his first appearance as a public scumbag in the Garden of Eden sequence in Genesis, where other translations have "a snake" or "a serpent" giving Eve that great advice about the apple.)

Rupert, you see, wanted that TWC should give him some astonishing amount like $4 per TWC customer for Fox "content," on the theory that somebody might be watching it. This year's year-end threat had us threatened with losing all of News Corp's TV programming, including American Idol and 24 and the entire Fox Noise Shebang.

So where, you may be wondering, is the downside? Like losing all that crap would be a bad thing? OK, sure, I would miss The Simpsons and House. But sometimes sacrifices have to be made. And as it happens, I've got half a dozen unwatched Simpsons episodes on my DVR, and the House episodes I could catch on USA.

Which brings us to the Giants, who being an NFC franchise are usually on Fox. But there's the joke! Miss the Giants? Hardly! They're the joke. Good riddance. Take them all, please.

MICHAEL WILBON ON "NICE GUY" JIM ZORN

Meanwhiile, on the WaPo website Michael Wilbon's got a nice column, "Zorn's long, sad vigil finally ends." He makes clear that Zorn was in way over his head as a head coach, that the Skins were in fact shockingly unprepared for NFL combat, and yet he's "an especially decent sort," who has been subjected to two years of pretty much nonstop humiliation. He describes him as "a nice person you'd rather go to dinner with than some of the more successful coaches in the NFL."

Wilbon too seems unoptimistic about the prospects of the impending Shanahan regime, not least because of the degree of control he will insist on, which Wllbon insists just doesn't work in today's NFL. He takes obvious delight in the current great fortunes of another nice guy, Norv Turner, who was hounded out of Washington, only to emerge, in San Diego, as the hottest coach in the game.

And you know, it's nice to read Wilbon, rather than watching him and Tony Kornhiser shouting at each other on ESPN's Pardon the Interruption. In fact my new image of sports TV is the hilarious show that Tracy Morgan guested on a couple of 30 Rock episodes ago, where the screen was split into quadrants housing four "sports guys" who simply shout simultaneously at the top of their lungs.

I would have loved to find a clip of it, but NBC seems to be doing a super-efficient job of keeping the Internet scrubbed free of any evidence that anybody is watching let alone enjoying its shows. To be fair, it probably doesn't happen very often these days. And you have to wonder, assuming the new ownership deal for NBC goes through, whether Comcast is going to be as tolerant as GE has been having the 30 Rock people savaging them week after week.

THE WINNER AND STILL CHICKEN-MASTER IS . . .

By the way, if you're wondering about the great war between Rupert M and Time Warner Cable, of course in the end TWC caved. Even after running a campaign to get us customers to urge them to play hardball in the interest of keeping cable costs down, you knew they would be afraid to face customers enraged by the loss of American Idol. So they'll raise our rates even more than they would have otherwise. TWC is a company that lives with both hands in its customers' pockets, squeezing every last penny out of us they can.

(I sometimes wonder why I hate my cable and ISP -- and now phone -- company so much, even though they provide a pretty good service. This is why: the feeling that they're always got both hands reaching deeper into and rummaging around my pockets. In my humbling experience, it's almost impossible to have a conversation with a TWC customer rep without winding up paying more.)

Although I have resolutely opposed "tiered" cable pricing, where you get charged according to which services you use rather than for the total package (the tiered pricing just seems too easy an opportunity for the cable operators to stick it to us with à la carte prices), in this case I would gladly make an exception.

In fact -- and here's my proposal, Time Warner Cable -- I might actually be willing to pony up, say, an extra buck a month for a cable lineup that's Guaranteed Murdoch-Free.


UPDATE: JUST HEARD IT ON THE RADIO --
THE NEW TOM COUGHLIN KEEPS HIS JOB!

Straight from the mouth of management. Defensive coordinator takes one for the team, but Coach The New Tom Coughlin is coming back! Just think how many Sunday afternoons that frees up for Giants fans next fall!

We're 8-8! We're 8-8!

Let's just hope the Mike Shanahan era in Washington gets off to a really horrific start! This one's for you, Pipsqueak Dan!

UPDATE II: IN COMMENTS, A FASCINATING

LOOK BACK AT PIPSQUEAK DAN'S CAREER

A couple of really great comments, including this stroll down Memory Lane as Pipsqueak Dan builds his fortune, leaving kind of nothing behind, reminding us of another famous American pipsqueak. Must read!

#