(With a great graphic) The Media Borg series: One cable company to rule them all
Since the summer, Comcast has warned hundreds, possibly thousands, of customers of potential service termination due to high Internet use. The customers who receive these letters, people who’d always been told that their Internet service was “unlimited,” find themselves in a Kafkaesque comedy of errors: The customers say that Comcast tells them they’re using the service too much, but it won’t give them any meaningful measure of how much is too much.
[…] Comcast is the largest cable television operator in the United States, a firm whose lines reach more than 21 million homes, almost twice as many as its closest rival. With more than 5 million high-speed Internet customers, it is also the nation’s largest broadband service. If it succeeds in its attempt to buy Disney, it would be the largest media company in the world. Comcast also spends millions of dollars a year on a sophisticated lobbying operation in Washington. […]
To […] customers who have been caught up in the company’s Byzantine policies, this power makes the company something to be feared. And the customers worry that if Comcast is successful in its hostile bid for Disney, a deal that would make it the largest media firm in the world, Comcast will become even less responsive to customers. Consumer groups are bracing for the possibility; they suggest that if Comcast gets Disney, the media — especially the Internet — will never be the same again.
[…] Such restrictions have prompted people to wonder what the company might do when it owns a vast stash of content. Will Disney’s content — its Web sites, its streaming movies and music and TV shows — get pushed through at quicker rates to Comcast’s broadband customers? Will other content, whether from a rival media giant or from your friends and family, get pushed through at all? And will the underlying architecture of the Internet subtly shift, over time, to accommodate the kinds of applications that media giants like Comcast want us to use, rather than the ones that come from the bubbling innovation of the Internet itself — like the Web, or e-mail, or peer-to-peer file trading?
[…] “If Comcast thinks the merger is going to pay off because there’s a natural synergy between content and distribution, the only way for them to make it pay is by using their distribution platform to give an unfair advantage to the content,” says Dave Burstein, the editor of DSL Prime, an influential broadband industry newsletter. “Comcast will have incredible incentive to keep content that’s not from Disney away from the consumer.”
Currently, there are no federal regulations prohibiting Comcast from doing something like that, which is why Comcast’s critics are demanding such restrictions. Unless the Federal Communications Commission imposes rules to prevent distribution companies like Comcast from favoring the content of one media firm over others’, says Lawrence Lessig, a professor at Stanford Law School, “if Comcast and Disney are together, the incentive to play the game will be irresistible.”
And here’s an argument to keep you up late at night:
So what’s better — a smart pipe or a dumb pipe? It’s completely up to the customer, [the Cato Institute’s Adam] Thierer says. Many people will want a restriction-free dumb pipe. But “my poor mother, when she gets online she’s utterly helpless. Some people need integrated intelligence. When they sign a contract they’re going to expect a little more than a new big fast pipe.” So if some people want dumb pipes and some people want smart pipes, why not let the market choose?
Comcast offers a variation on this position. It should be free, it says, to favor some content on its network over other content — but whether it does so or not will be circumscribed by market forces, and in the end consumers won’t be harmed.