Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age (48 page)

82.
Seventy-four House Democrats signed a letter to the chairman, asking that the proposal be dropped. See John Eggerton, “Democrats Take Aim at Title II,”
Multichannel News
, May 24, 2010,
http://www.multichannel.com/article/453016-Democrats_Take_Aim_at_Title_II.php
. The letter stated, “The uncertainty this proposal creates will jeopardize jobs and deter needed investment for years to come. … We urge you not to move forward with a proposal that undermines critically important investment in broadband and the jobs that come with it” (Gene Grene to Hon. Julius Genachowski, May 2010, available at
http://www.savetheinternet.com/node/30594
). Thirty-seven Senate Republicans sent a letter as well: “There is scant evidence that the broadband market lacks competition or that consumers have been harmed in a manner that would warrant the heavy-handed 19th century regulations that you seek to impose on a highly competitive 21st century communications marketplace” (Senate Republicans to Hon. Julius Genachowski, May 24, 2010, available at
http://netcompetition.org/Senate_Republican_Letter.pdf
).

83.
Ron Chernow,
Titan: The Life of John D. Rockefeller, Sr.
(New York: Random House, 1998), 544.

84.
Federal Communications Commission, “FCC to Seek Best Legal Framework for Broadband Internet Access,” news release, June 17, 2010.

85.
In the Matter of Preserving the Open Internet Broadband Indus. Practices
, 25 F.C.C.R. 17905 (2010).

Chapter 3. A Family Company

Epigraph. Ken Auletta, interview with John Malone, New York, October 16, 2002, available at
http://www.kenauletta.com/2002_10_16_johnmalone.html
.

1.
Susan P. Crawford, “The New Digital Divide,”
New York Times
, December 3, 2011; Shalini Ramachandran, “Behind Claims of ‘Fastest’ Internet Speeds,”
Wall Street Journal,
January 31, 2012; Bob Fernandez, “Hoping for FiOS, Some Cities Now Feel Abandoned by Verizon,”
Philadelphia Inquirer
, April 29, 2012, available at
http://articles.philly.com/2012-04-29/business/31475013_1_fios-verizon-wireless-wireless-spectrum
.

2.
Bernstein Research, “Broadband Numbers for Susan Crawford,” November 7, 2011, on file with author.

3.
“In areas that include 75% of the population, consumers will likely have only one service provider (cable companies with DOCSIS 3.0-enabled infrastructure) that can offer very high peak download speeds” (Federal Communications Commission,
National Broadband Plan Connecting America
, chap. 4, p. 42, available at
http://www.broadband.gov/plan/
). Where Verizon FiOS service exists, there will be competition with cable Internet access service providers for high-speed Internet access at the speeds necessary to carry out real-time videoconferencing or watch high-definition video. Where there is no Verizon FiOS service, there won't be any competition, and consumers will have just one provider to choose from: their local cable monopoly. Most Americans—perhaps more than 75 percent of them—will fall into this category.

4.
Robert C. Atkinson, Ivy E. Schultz, Travis Korte, and Timothy Krompinger, “Broadband in America—2nd Edition: Where It Is and Where It Is Going (According to Broadband Service Providers): An Update of the 2009 Report Originally Prepared for the Staff of the FCC's Omnibus Broadband Initiative, May 2011, 69, available at
http://www4.gsb.columbia.edu/null/download?&exclusive=filemgr.download&file_id=738763
.

5.
“Ownership Chart: Cable,”
Free Press
,
http://www.freepress.net/ownership/chart/cable
; Bob Fernandez, “Comcast Earnings Up, Subscriber Defections Down in 3Q,”
Philadelphia Inquirer
, November 2, 2011,
http://articles.philly.com/2011-11-02/news/30350594_1_comcast-shares-timewarner-cable-cable-tv-subscribers
; Peter Svensson, Associated Press, “Comcast Will Start Charging Data Hogs Extra,” May 17, 2012,
USA Today
, available at
http://www.usatoday.com/money/industries/technology/story/2012-05-17/comcast-data-hog/55045306/1
.

6.
Associated Press, “Comcast Wins OK to Buy NBC.”
Christian Science Monitor
, January 18, 2011,
http://www.csmonitor.com/Business/Latest-News-Wires/2011/0118/Comcast-wins-OK-to-buy-NBC
; TechnicallyPhilly, “Comcast Adds Internet Customers, Loses Cable Subscribers, Profits Jump,” May 3, 2012,
http://technicallyphilly.com/2012/05/03/comcast-adds-internet-customers-loses-cable-subscribers-profits-jump-roundup
; Brian Roberts biography, Comcast Web site, accessed May 31, 2012,
http://www.comcast.com/nbcutransaction/pdfs/Bios%202.13.10.pdf
.

7.
John Eggerton, “Kagan: Cable Subs Dip As Multichannel Subs Rise”
Multichannel News
, July 28, 2011, available at
http://www.multichannel.com/article/471688-Kagan_Cable_Subs_Dip_As_Multichannel_Subs_Rise.php
.

8.
Craig Moffett, Nicholas Del Deo, Regina Possavino, and Amelia Chan, “U.S. Pay TV: Death, Taxes and Cable and Satellite Rate Hikes … Smaller Increases in Store for 2011,” Bernstein Research, January 10, 2011;
United States of America, State of California, State of Florida, State of Missouri, State of Texas and State of Washington v. Comcast Corp., General Electric Co., and NBC Universal, Inc.
, No. 1:11–00106 (2011), available at
http://www.justice.gov/atr/cases/f266100/266158.htm
.

9.
Reply Comments of Time Warner Cable, Inc., In the Matter of Petition for Rulemaking to Amend the Commission's Rules Governing Retransmission Consent
, MB Docket No. 10–71 (June 3, 2010), 16, available at
https://prodnet.www.neca.org/publicationsdocs/wwpdf/6310twc2.pdf
; e-mail from telecommunications analyst Mitchell Shapiro to author, May 18, 2012 (summarizing Comcast 1Q ARPU public figures).

10.
“Comcast Reports 1st Quarter 2012 Results,”
Comcast Investor Relations
, May 1, 2012,
http://www.cmcsk.com/releasedetail.cfm?ReleaseID=669493
. Comcast's prices for DOCSIS 3.0 high-speed Internet access are much higher than prices for faster, better service elsewhere in the world. See Tim Karr, “Verizon's Broadband Bunk,” December 8, 2011,
http://www.savetheinternet.com/blog/11/12/08/verizons-broadband-bunk
(“Compare our circumstances to those in Japan, for example, where Internet users are accustomed to surfing the Web at speeds of 100 Mbps [or megabits per second] at the same prices Americans pay for dial-up. In Hong Kong, one provider now offers a $20 a month “triple play” package that includes a blistering 1,000 Mbps data service.”)

11.
Craig Moffett et al., “Weekend Media Blast: A Tragedy of the Commons,” Bernstein Research, March 26, 2010.

12.
Giovanny Moreano, “The Highest Paid CEOs of 2010,”
CNBC
, April 13, 2011,
http://www.cnbc.com/id/42573061/The_Highest_Paid_CEOs_of_2010
.

13.
Peter Key, “Comcast CEO Roberts Sells, Donates Stock,”
Philadelphia Business Journal
, August 12, 2010, available at
http://www.bizjournals.com/philadelphia/blogs/technology/2010/08/comcast_ceo_roberts_sells_donates_stock.html
; Douglas McIntyre, “The Most Powerful CEOs in America,”
MSNBC, The Bottom Line
(blog), May 9, 2012,
http://bottomline.msnbc.msn.com/_news/2012/05/09/11504828-the-most-powerful-ceos-in-america?lite
; Comcast Investor Relations, Frequently Asked Questions,
http://www.cmcsk.com/faq.cfm
, accessed May 31, 2012 (“Comcast has a Class B common stock, which does not trade publicly and is held entirely by BRCC LLC [a limited liability company controlled by Brian L. Roberts, CEO and President of the Company] and two estate planning trusts of Mr. Roberts. The Class B common stock constitutes an undilutable 33 1/3% of the voting power of the total voting power of all classes of the Company's common stock.”).

14.
Mark Maremont and Tom McGinty, “Corporate Jet Set: Leisure vs. Business,”
Wall Street Journal
, June 16, 2011, available at
http://online.wsj.com/article/SB10001424052748703551304576260871791710428.html
.

15.
“Competition in the Media and Entertainment Distribution Market”: Hearing Before the H. Comm. on the Judiciary
, 111th Cong. 63 (2010); Geraldine Fabrikant and Laura Holson, “Family-Dominated Comcast Good at Pleasing Investors,”
New York Times
, February 14, 2004, available at
http://www.nytimes.com/2004/02/14/business/family-dominated-comcast-good-at-pleasing-investors.html
.

16.
Joint Written Statement by Brian L. Roberts and Jeff Zucker to the Senate Judiciary Committee, Subcommittee on Antitrust, Competition Policy, and Consumer Rights
,
February 4, 2010, 2,
http://www.judiciary.senate.gov/pdf/10-02-04%20Roberts-Zucker%20Testimony.pdf

17.
George Szalai, “Comcast Feels Strategically Complete,”
Hollywood Reporter
, December 7, 2009, available at
http://www.hollywoodreporter.com/news/comcast-feels-strategically-complete-92063
.

18.
“CMCSA: Comcast Corporation at Morgan Stanley Technology, Media & Telecom Conference,” conference call, March 2, 2011, transcript, 4, available at
http://files.shareholder.com/downloads/CMCSA/0x0x447538/c20eba7d-049c-4dc7-a5cd-873f880b42bb/Comcast_MS_Transcript_3.3.11.pdf
.

19.
Ibid.

20.
Geraldine Fabrikant, “The Heir Is Clearly Apparent at Comcast,”
New York Times
, June 22, 1997, available at
http://www.nytimes.com/1997/06/22/business/the-heir-is-clearly-apparent-at-comcast.html?pagewanted=all&src=pm
; Geraldine Fabrikant, “AT&T's Cable Deal: The Family; Philadelphians Take a Giant Step Toward Leading the U.S. Cable Industry,”
New York Times
, December 20, 2001, available at
http://www.nytimes.com/2001/12/20/business/t-s-cable-deal-family-philadelphians-take-giant-step-toward-leading-us-cable.html
.

21.
Tom Southwick, interview with Ralph J. Roberts, July 27, 2000, the Cable Center, Barco Library, Hauser Oral and Video History Collection, available at
http://www.cablecenter.org/content.cfm?id=641
.

22.
Joseph diStefano,
Comcasted
(New York: Camino Books, 2005), 35.

23.
Jim Keller, interview with Julian Brodsky, June 16, 1998, the Cable Center, Barco Library, Hauser Oral History Collection, available at
http://www.cablecenter.org/content.cfm?id=439
.

24.
“Cable Guy,” Wharton Entrepreneurial Programs, University of Pennsylvania, Philadelphia, September 2009, available at
http://wep.wharton.upenn.edu/gis/article.aspx?gisID=140
.

25.
Keller, interview with Julian Brodsky.

26.
Ibid.

27.
David Lieberman, “Father-Son Odd Couple Make Bid to Rule Cable. One's Calm. One's Wary. Together They're Comcast,
USA Today
, July 23, 2001.

28.
“Cable Guy” “WEP Alumni Impact: Julian Brodsky on the Genesis of Comcast,” YouTube video, 0:19–21, posted by “wepvideo” September 21, 2009,
http://www.youtube.com/watch?v=2e4xeps9B3w
.

29.
Keller, interview with Julian Brodsky.

30.
Ibid.; “Comcast Is King of Its Empire,”
Courier-Post
(Cherry Hill, N.J.), May 14, 2011.

31.
Keller, interview with Julian Brodsky.

32.
Southwick, interview with Ralph Roberts; “Comcast Corporation,”
Funding Universe
, accessed May 31, 2012,
http://www.fundinguniverse.com/company-histories/Comcast-Corporation-company-History.html
.

33.
Federal Communications Commission, “General Cable Television Industry and Regulation Information Fact Sheet,” June 2000, available at
http://transition.fcc.gov/mb/facts/csgen.html
; Keller, interview with Julian Brodsky.

34.
Media Commentary Council,
Channels of Communications
5 (1985): 44; Keller, interview with Julian Brodsky.

35.
Keller, interview with Julian Brodsky.

36.
K. C. Neel, “The Life of Brian: Roberts Helped Shape the Industry He Grew Up In,”
Multichannel News
, December 21, 2009.

37.
Southwick, interview with Ralph Roberts.

38.
Neel, “Life of Brian” Lisa Furlong, “CEO List 2006,”
Golf Digest
,
http://www.golfdigest.com/golf-tours-news/2006-12/CEOrankings_gd2006
.

39.
Patrick R. Parsons,
Blue Skies: A History of Cable Television
(Philadelphia: Temple University Press, 2008), 481.

40.
Betty Liu, “Liberty Media's John Malone Talks Communications,”
Bloomberg Television
, July 14, 2010, available as YouTube video, “Malone Says Telecoms Lack ‘Firepower’ Versus Cable,” posted by “Bloomberg,” July 14, 2010,
http://www.youtube.com/watch?v=QUbQRwKXeCU
.