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Comcast Now Has More Internet Customers Than Cable TV Subscribers

Comcast Now Has More Internet Customers Than Cable TV Subscribers

By Meg James, Los Angeles Times (TNS)

Comcast Corp. again demonstrated that the future is indeed the Internet.

Comcast beat Wall Street estimates on Monday with first quarter profit up 10 percent compared with the year-ago period with strong gains in its Internet service business. The positive earnings came less than two weeks after the company’s planned $45 billion takeover of Time Warner Cable collapsed amid pressure from Washington.

Federal regulators were gearing up to block the merger, worried that Comcast could become too formidable a gatekeeper of the Internet.

“Of course we are disappointed,” Comcast Chief Executive Brian Roberts said during an earnings call early Monday with Wall Street analysts. “It was a unique, one-off situation but really, really we have moved on.”

Roberts declined to dwell on the company’s missed opportunity. He said he had looked forward to bringing his company’s state-of-the-industry products to new markets, including Los Angeles and New York.

“The government ultimately didn’t see it the same way,” he said.

The stinging defeat came in a month when Comcast quietly hit a milestone.

The company now has more than 22 million high-speed Internet customers, surpassing the number of customers that subscribe to its packages of cable TV channels. Comcast added 407,000 Internet customers during the first quarter, which also saw a loss of about 8,000 cable TV subscribers.

Comcast may not be the largest pay-TV operator in the U.S. for much longer. If the federal government approves AT&T’s proposed $49 billion takeover of DirecTV, as expected, that company would hold the distinction of being the biggest pay-TV provider in the nation.

“Our No. 1 focus is to deliver the kind of results we have posted here today, to stay focused and not take our eye off the ball,” Roberts said later on the call.

For the quarter ended March 31, Comcast produced net income of $2.06 billion, or 81 cents a share, compared with $1.87 billion, or 71 cents a share in the year earlier period. Analysts had expected around 74 cents a share.

Revenue was up 2.6 percent to $17.9 billion.

The company also said it was increasing its share buy-back plan this year by $2.5 billion. Comcast plans to buy back $6.75 billion in shares this year.

(c)2015 Los Angeles Times, Distributed by Tribune Content Agency, LLC.

Photo: Knight725 via Flickr

Top Reads: ‘Stealing Time’

Top Reads: ‘Stealing Time’

Since the merger between cable behemoths Time Warner Cable and Comcast fell apart, perhaps we should remember the leviathan tragedy of the marriage between America Online and Time Warner. Back in 2000, a time when mergers were considered sound ideas, the failed merger of the two media giants was a sobering event. In Stealing Time: Steve Case, Jerry Levin, and the Collapse of AOL Time Warner, by Alec Klein, we get a front-row seat to watch the whole thing go sour. The decision to combine the old media of Time Warner with the new media assets of America Online led to a clash of egos and cultures that disassembled the company within three years.

You can purchase the book here.

Understanding Net Neutrality: We Need A Better Analogy

Understanding Net Neutrality: We Need A Better Analogy

Faced with the profound issue of net neutrality, America’s consumers still struggle to understand its complexities. Part of the problem may be the usual analogy of express lanes on a highway.

Most people understand the Internet through its impact on them. So they take the fast lane/slow lane description and translate it into their own choices, like paying to take a toll road when they’re in a hurry. They know they pay extra for high-speed Internet to avoid dial-up, and they don’t see anything wrong with that. In fact, some local cable companies currently provide several speed levels for several price levels, which also seems “fair.”

People fundamentally suspicious of government (comparisons to the Post Office and Amtrak keep coming up) only think about their Internet choices at home, and the fact that competing technologies have delivered faster service without regulation, and assume that it will only get worse with regulation.

So let’s try this version instead:

Think of the Internet as the entire interstate highway system, complete with on-ramps, high-speed freeways, higher-speed tollways, interchanges and off-ramps.

At your home, you’re paying for the off-ramp from the system, and you already pay more if you want a 60 MPH off-ramp instead of a 10 MPH off-ramp with a stop sign. The big issue, the one Comcast, AT&T, Netflix, Silicon Valley and serious geeks everywhere are fighting over, is the on-ramp and access to those high-speed off-ramps.

Once your data is on the highway, slower speed only means more delay from the time your packets of data were sent until they are delivered. Not the end of the world, unless you’re a High-Frequency Trader. I’m sure by now most of us know that when we watch “live” television that there is actually a delay. Even switching from low definition to high definition often adds a few seconds’ lag, but seeing the big play in high def can be worth the cost of not knowing as quickly.

That could all change if the “slow lane” turns into a massive traffic jam. At that point, it won’t matter how much you’re paying for your fast off-ramp. If your content vendor can’t or won’t pay for fast transmission at each stage – getting on, transmitting, and getting off, then you might as well have a dial-up line. Remember “buffering?” Without net neutrality, it’s about to make a comeback.

What is really being debated is a brand-new trend in Internet commerce – charging the vendors extra to get faster on-ramps, and charging the vendors again to get access to the faster off-ramp that you’re paying for already.

Silicon Valley hates it, because it’s the land of garage startups, and if you have a hot new application, the $10 million-a-month fee for the fast on-ramp and fast customer off-ramps might keep entrepreneurs from ever getting into business.

The big ISPs (Internet Service Providers) love creating another source of profit from their control of the Internet “backbone” and their exclusive relationship with the end customers. That’s why Comcast is spending so much on Washington lobbyists, and is currently outspent by only Lockheed.

There is an upside to letting the ISP oligopoly continue unfettered by regulation: they’ll have so much money that they may decide to spend some of it upgrading their systems. They may even decide that the extra revenue for high-speed transmission is good enough to extend high-speed service to areas where other providers enjoy monopoly pricing, lowering subscriber prices. Or they could extend their networks to lower density populations, a development that might let the government get out of the business of subsidizing rural Internet deployment.

Just don’t be surprised to hear the ISPs try to call cutting those rural subsidies a “tax” the way Florida sugar growers described the trial balloon of cutting sugar subsidies. For the sugar kings, that tactic killed the idea and they kept their “emergency” subsidy that’s been in place since the Spanish-American War. You can bet the ISPs like that kind of government interference.

For those who argue that regulatory action on this issue will change the Internet forever, just remember, the one-speed-for-all-content network you’re used to is about to change dramatically unless regulation keeps it that way.

So my question to the “free market” folks who are against net neutrality is this: Are you sure that — for the rest of your life — you only want Internet services that the big boys will come up with? If you think Google, Netflix, iTunes, Amazon and a couple of others will invent everything you’ll ever want, and that they won’t gouge you with their pricing, then by all means, oppose net neutrality.

Howard Hill is a former investment banker who created a number of groundbreaking deal structures and analytic techniques on Wall Street, and later helped manage a $100 billion portfolio. His book, Finance Monsters, was recently published.

Photo: Joseph Gruber via Flickr

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Net Neutrality Stands In The Way Of Larger Corporate Profits

Net Neutrality Stands In The Way Of Larger Corporate Profits

When it comes to Internet Service Providers and high-speed Internet, the consumer marketplace has hardly been a model of competitiveness. Some of us are lucky enough to be able to choose from two providers, and some of us only have access to one.

These digital conduits are essential parts of America’s utility infrastructure, nearly as basic as electricity and water pipes. They connect us (and our children) to worldwide knowledge, news, diverse viewpoints and other fundamental tools of citizenship. And, of course, we can buy and sell through them, be entertained, run our businesses, connect with friends, get up-to-the-minute scores, follow the weather and — yes indeedy — pay our bills.

Yet while this digital highway is deemed vital to our nation’s well-being, access to it is not offered as a public service — i.e., an investment in the common good. Instead, it is treated as just another profit center for a few corporations.

Amassing market power to gouge customers is bad enough, but ISPs plan on eviscerating the pure egalitarian ethic of the Internet, which is why they were so upset when President Obama recently urged the FCC to back a free and open Internet.

Like an uncensored global bulletin board, the great virtue of the Internet is that no one controls its content. This digital communication technology has been so spectacularly successful and so socially valuable because it is a wide-open, democratic forum, accessible on equal terms to all who want to put information, images, opinions, etc. on it or to download any of the same from it. Since its invention, the guiding principle behind the use of this liberating technology has been that no corporation, government, religion, or other controlling power should be its gatekeeper.

This open-access tenet is dubbed “net neutrality,” meaning the system doesn’t care if you’re royalty or a commoner, an establishmentarian or a rebel, a brand-name corporation or an unknown startup, a billionaire or a poverty-wage laborer — you are entitled to equal treatment in sending or getting information in the worldwide webosphere. That’s an important democratic virtue. As we’ve learned in other spheres, however, corporate executives are not ones to let virtue stand in the way of profit, and today’s telecom tycoons are no different. For some time, they’ve been scheming to dump the idea of net neutrality, viewing its public benefit as an unwarranted obstacle to their desire to grab greater profits.

• Rather than having one big broadband “freeway” open for transporting everyone’s Internet content, the ISP giants intend to create a special system of lanes for high-speed traffic.

• This express lane will be made available to those who want to rush their information/viewpoints/programs/etc. to the public and to get greater visibility for their content by having it separated from the mass clutter of the freeway.

• The ISPs will charge a premium price to those who want their content transported via this special Internet toll-lane system.

By creating this first-class fare, the likes of Comcast or Time Warner Cable elevate themselves from mere transporters of content to exalted robber barons. They would be empowered to decide (on the basis of cash) which individuals, companies, and so forth will be allowed in the premium lane of what is supposed to be a democratic freeway. The “winners” will be (1) the ISP giants that would reap billions from this artificial profit lane, and (2) the powerful content providers (e.g., Disney, the Koch brothers, Walmart, the Pentagon, and Monsanto) that can easily pay top dollar to ride in the privileged lane (and deduct the ticket price from their corporate taxes).

The losers, obviously, will be the vast majority of internet users: (1) the dynamic cosmos of groups, small companies, and other content providers without the deep pockets needed to buy their way out of the slow lanes (which ISP monopolists could intentionally make even slower), and (2) the broad public that will have its access to the full range of Internet offerings blocked by the neon glare of those flashing their purchased messages in the fast lanes, limiting what we’re allowed to read, watch, listen to and interact with on our computers, smartphones and TV screens.

The biggest loser though, would be the Internet itself, which would be made to surrender its determinedly democratic ethic to the plutocratic rule of corporate profiteers.

To stand up for a free and open Internet, go to www.FightForTheFuture.org.

To find out more about Jim Hightower, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Web page at www.creators.com.

Photo: Knight725 via Flickr

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