NYC official wants Comcast to offer $10, 10Mbps Internet after merger One-third in city have no broadband; it’s too expensive, public advocate says.
New York Cityâ€™s public advocate wants Comcast to promise â€œuniversal broadband for all New York City consumersâ€ in exchange for buying Time Warner Cable.
NYC Public Advocate Letitia James, who has served in the elected position since January 2014 after a career on the city council and as a lawyer, urged the state Public Service Commission (PSC) to impose tough conditions on the merger in a new report. New York City can’t stop the acquisition, but the PSC can approve or deny it because Time Warner Cable licenses would be transferred to Comcast.
James is concerned about the $45.2 billion merger, she told Ars in a phone interview, noting that “Comcast and Time Warner have the lowest customer satisfaction ratings of any Internet service provider in the United States.”
“The jury’s still out” on whether the merger could benefit consumers, she said. “I’m concerned about creating monopolies, I’m concerned about unequal provision of service, I’m concerned about increased cost.”
Comcastâ€™s Internet Essentials program for the poor, which was mandated as part of Comcastâ€™s purchase of NBCUniversal, offers $10-per-month service with download speeds of 5Mbps and upload speeds of 1Mbps. Comcast intends to extend that to Time Warner Cable customers in New York, but James believes the programâ€™s eligibility requirements are too strict.
In addition to expanding eligibility, James wants Comcast to maintain and improve Time Warner Cableâ€™s â€œEveryday Low Priceâ€ plan, which offers 2Mbps down/1Mbps up service for $15 a month and is available to anyone regardless of income. Comcast should change Everyday Low Price â€œto provide at least 10Mbps download speeds and 1Mbps upload speeds for $9.95 a month,â€ Jamesâ€™ report says.
James pointed out that a reported one-third of New Yorkers do not have broadband at home. This part of the population often canâ€™t afford Internet service and ends up relying on public hotspots, she said.
â€œInternet access is not a luxury, but it’s really a necessity in the 21st century, particularly as it relates to addressing the issues of income inequality,â€ James told Ars.
Jamesâ€™ other requests of Comcast include:
– [Provide] free access, training, and equipment for all public housing residents of the New York City Housing Authority, all senior, youth, and community centers, and all domestic violence and homeless shelters.
– [Provide] free Wi-Fi service in all New York City parks.
– Remove connection fees in communities that do not have existing cable services.
– Provide Internet service at discounted prices to small businesses and invest in 10 small business incubator buildings.
– Upgrade New York Cityâ€™s Hybrid Fiber-Coax plant to provide at least gigabit network speeds, which will provide faster service for consumers.
– Establish fund to train New Yorkers for broadband, infrastructure, and technology jobs.
– Reduce the number of consumer complaints by creating at least one customer service center in each borough, along with developing a Comcast call center in New York, and hiring more customer service staff in New York.
– Establish a service quality plan that would result in a penalty paid to consumers if objective criteria fail to be satisfied, similar to Verizonâ€™s Performance Improvement Plan.
– [Offer] increased transparency in regard to price increases and service changes.
Comcastâ€™s current set of offerings â€œcreates some barriers for low-income individuals,â€ she said.
Internet Essentials is available only to families with a child eligible for the National School Lunch program and only if they have not subscribed to Comcast Internet service within the last 90 days. James wants eligibility to be determined by income only in order to make the low-cost service available to poor people without children in the school system.
Comcast defended its Internet Essentials program. â€œWithout the deal going through, there’s no low-income broadband program in New York that’s anywhere close to what we have or what we’ve done in other cities,â€ Comcast VP of Government Communications Sena Fitzmaurice told Ars. Internet Essentials serves 450,000 families, for about 1.8 million people total.
Jamesâ€™ report describes eligibility barriers in the program.
â€œ[I]n order to enroll in Internet Essentials, the consumer cannot have subscribed to Comcast Internet Service within the last 90 days,â€ the report says. â€œThis is a major barrier to affordable service because it forces consumers to go three months with no Internet during which time they could be applying to jobs or accessing vital programs and services.â€
Internet Essentials has also been criticized by consumer advocates in California, who say it’s too hard to sign up for.
The New York Public Service Commission has delayed a vote on the Comcast/Time Warner Cable merger several times, with the latest delay setting a date of April 20. One delay came after the state Division of Consumer Protection’s Utility Intervention Unit (UIU) found “deficiencies associated with the Companiesâ€™ current substandard customer service.”
The most important vote will come at the federal level, but the Federal Communications Commission has not scheduled a vote yet. Last week, the FCC said it is pausing its review while it awaits the result of a court decision on whether certain confidential video programming information can be examined.
Broadband available throughout New York City, but the poor often go without
Broadband in the Big Apple â€œis almost universally available,â€ with â€œresidential coverage stand[ing] at virtually 100 percent,â€ according to New York Cityâ€™s Information, Technology, and Telecommunications department. But â€œthere are disparities based on age, education level, employment status, race and neighborhood,â€ said a December 2014 report by the cityâ€™s comptroller.
â€œMore than one-third (34 percent) of households in the Bronx lack broadband at home, compared to 30 percent in Brooklyn, 26 percent in Queens, 22 percent in Staten Island, and 21 percent in Manhattan,â€ the report said.
TWC serves most of the five boroughs, but is not in the Bronx and is only in part of Brooklyn, Fitzmaurice told Ars. Time Warner Cable has 2.6 million subscribers in New York state, compared to 23,000 for Comcast. Cablevision, which operates mostly in New York, has 3.1 million customers.
In addition to making broadband more affordable, James wants infrastructure to be upgraded. “It’s really embarrassing that we lag behind Chattanooga, Tennessee, and Kansas City and other jurisdictions,” she said. Chattanooga and Kansas City have gigabit-speed fiber broadband. Comcast plans a gigabit upgrade, but its $400-per-month price for 500Mbps is more than five times higher than the $70 charged in Chattanooga and Kansas City.
Time Warner Cable’s “Ultimate” Internet service tops out at 50Mbps with only 5Mbps uploads and starts at $65 per month for the first year. Comcast provides more than double that speed at the same price for the first 12 months. However, Comcast charges at least double what Time Warner Cable charges for entry-level plans that aren’t restricted by income.
New York City has little say in merger
James has no authority over the merger herself. In fact, her report says that New York City gave up control over mergers when it negotiated its latest franchise agreement with Time Warner Cable.
â€œPrior to 2008, New York City retained greater authority when a franchisee such as TWC sought to merge with another company,â€ she wrote. â€œUnfortunately, when New York City renewed its Cable Franchise Agreement with TWC in 2008, the Bloomberg Administration effectively relinquished all ability for the City to protect its interests and leverage the value of its extremely important and profitable franchise.â€
New York City should restore â€œits power to approve or deny changes of control of a Franchisee, hold public hearings and set conditions that must be satisfied before any merger takes place,â€ the report said.
James was on the City Council during that franchise negotiation.
â€œWhen I was a member of the City Council, there was a hearing with regard to the franchise agreement, but we had no idea the mayor of the City of New York was relinquishing power of the City of New York. He did that without notifying the City Council,â€ she said. Besides serving on the City Council for 10 years, James was also an assistant attorney general for New York state, counsel in the state legislature, and a public defender.
James considered recommending an outright rejection of the Comcast/Time Warner Cable merger, but decided against that â€œgiven the political realities,â€ meaning the likelihood that it will be approved.
â€œWe have testified before the PSC, we will continue to lobby the governor, and we will continue to engage state elected officials with regard to this merger,â€ James said. When asked if she is confident the PSC will enact her recommendations, James said, â€œI’m always hopeful and I usually ask for the sky.â€
Separately from the merger, James criticized Governor Andrew Cuomo’s plan to use $500 million from bank settlements to provide incentives to private providers to build in underserved and unserved areas.
“My position is the private sector should be responsible for buildout, and we should not be using public resources to provide for infrastructure improvements,” she said.