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Comcast fighting fears it will become an ‘Internet gatekeeper’

By
Josh Kosman
Published March 27, 2015, 11:01 p.m. ET

Is Comcast a broadband bully?

As the regulatory review of its proposed $45 billion takeover of Time Warner Cable enters the final stretch, the cable giant is busy honing its case against critics who say it will be the high-speed Internet gatekeeper.

The FCC has heightened scrutiny of the deal in the wake of stronger net neutrality rules and, while many still think it will get approved, the numerous delays are causing jitters.

Whether the Federal Communications Commission approves the deal — with or without conditions — depends largely on how much of the market for broadband, or high-speed Internet access, the combined company will end up controlling.

Comcast earlier insisted in meetings with regulators that there was no such thing as a national broadband market and that the FCC’s analysis should focus on local markets where Comcast and Time Warner Cable don’t compete.

In more recent meetings with the FCC, however, the company has shifted its strategy and is now trying to parse the national broadband market, according to sources.

Comcast told regulators this week that the deal would only marginally increase its national broadband share for customers under the FCC’s new broadband standards, sources said.

Many cities and towns across the US still don’t have a broadband provider under the stricter, new FCC definition.

If the FCC looked at only the areas that do, then Comcast said its broadband share increases by just 1 percent.

That’s because Time Warner Cable doesn’t offer what qualifies as broadband now in many markets.
So it’s not really adding much to Comcast’s broadband share.

“That’s grasping at straws,” said one antitrust lawyer who is working for critics of the deal.
Comcast and FCC spokespeople declined to comment.

In January, Comcast appeared to suffer a big blow in its pursuit of TWC when the FCC changed what constitutes a high-speed Internet connection.

Under the new designation, broadband is defined as the delivery of Internet data at speeds of at least 25 megabits per second, up from 4 megabits per second.

By narrowing the definition, it had the effect of increasing Comcast’s share of the market to more than 50 percent.

But it also had the effect of lowering Time Warner Cable’s share.

The change was aimed at stopping cable and phone providers from trying to pass off subpar download speeds as broadband.

“About three-fourths of American households have zero or one choice for high-speed, wired broadband to their homes. No choice or one choice does not make an attractive marketplace from a consumer’s perspective,” FCC Chairman Tom Wheeler said in a speech at Ohio State University on Friday.