What Comcast and Time Warner Don’t Want the Public to Know

We previously indicated that there is insufficient information in the Comcast/Time Warner merger petition and in the public record of the case at the PSC from which one could conclude that the merger satisfies the “public interest” test.  That test requires a demonstration that positive incremental benefits due to a merger will outweigh its risks and negative factors.   See TELEPHONE AND BROADBAND UNIVERSAL SERVICE, CONSUMER PROTECTION, AND RATE CONCERNS RAISED AT HEARING ON COMCAST TAKEOVER OF TIME WARNERAlso, under the new merger approval law enacted with this year’s budget bill, companies are required to address whether they are in compliance with existing PSC regulatory standards. 

For more information and background, see COMCAST TIME WARNER MERGER.

The Public Service Commission was asked , in a FOIL request in mid-June 2014, to provide its staff discovery requests and the answers of  Comcast and Time Warner in PSC Case 14-M-0183.  Reports filed with the PSC by Time Warner regarding its phone service quality performance were also requested under FOIL.  The staff discovery questions up to the date of the request, June 17, were readily provided.

Comcast/Time Warner protested public release of many of its answers, and the answers and service quality reports that were supplied were heavily redacted pending resolution of its trade secrecy claims regarding the omitted information.  On July 15, 2014, Comcast/Time Warner filed a brief urging the Administrative Law Judge not to require disclosure of the redacted information.  If awards were given for creative justifications, this might take the prize:

“In general, the redacted trade secret information and the Exhibits identified below include, without limitation, information and details concerning (i) the current operations and future business plans of the Companies, (ii) strategic information concerning their products and services, (iii) strategic investment plans, (iv) customer and service location information, and (v) performance data. This highly sensitive information has not been publicly disclosed and is not expected to be known by others. Moreover, given the highly competitive nature of the industries in which Comcast and Time Warner Cable compete, disclosure of these trade secrets would cause substantial injury to the Companies’ competitive positions– particularly since the Companies do not possess reciprocal information about their competitors.”

The “competition” for TV, broadband, and phone business in New York generally boils down to a duopoly (phone company or cable ) or at best oligopoly (maybe phone and cable companies plus Dish or wireless), in which  providers are probably able to deduce who has the other customers and likely know, due to interconnection and traffic activity, what their “rivals” are doing.  See NEW REPORT RAISES QUESTIONS ABOUT VERIZON PHONE AND INTERNET SERVICES: “IT’S ALL INTERCONNECTED”.

What Comcast and Time Warner Don’t Want the Public to Know

Comcast/Time Warner’s request  to the PSC to maintain secrecy of information includes continuied blocking of the release of

  • “specific details of Time Warner Cable’s current broadband deployment plans in New York. In particular, the information contains the specific details about such plans, including the franchise area, county, total miles of deployment, number of premises passed and the completion or planned completion date. Such information is kept confidential by Time Warner Cable”
  • “information regarding the Companies’ promotional rates for service in various locations within their respective footprints – as well as competitive intelligence concerning competitor offerings. This compilation and competitive analysis are not publicly available.”
  • “specific details of Time Warner Cable’s current build-out plans to rural areas of New York, as well as Comcast’s future business plans in this area. The information also contains anticipated financial expenditures for Time Warner Cable’s build-out plans. Such information has not been publicly disclosed.”
  • “information concerning the New York schools and libraries served by Time Warner Cable, as well as information concerning Comcast’s future business plans to serve such entities. This information is kept confidential by Time Warner Cable and has not been disclosed to the public.”
  • “information concerning the number of Comcast’s “Internet Essentials” customers in New York, as well as Comcast’s future business plans for the “Internet Essentials” program.”
  • “the Companies’ detailed customer and service quality data.”
  • “information concerning the Companies’ current operations and staffing levels in New York, as well as Comcast’s future business plans concerning post-merger operations and employee levels.”
  • “information setting forth the number of subscribers to Time Warner Cable’s “Everyday Low Price” broadband service.”
  • Comcast’s handling of customer requests for an unlisted service, and how Comcast handles customer inquiries related to this subject matter.”
  • “Comcast’s future business plans with respect to particular subject matters.”
  • “information and performance statistics relating to the Companies’ call centers in New York and the Northeast.”
  • “information concerning Time Warner Cable’s operations as they relate to projects funded by federal or state [energy efficiency or distributed energy resource] programs.”
  • “information concerning Comcast’s operations and future business plans relating to avoidance of truck rolls and vehicle fleets.”
  • “information relating to the number of Wi-Fi hotspots that Time Warner Cable has deployed in New York, as well as Comcast’s future business plans in this area.”
  • “information concerning Comcast’s handling of cyber-security issues associated with its Xfinity Home service.”
  • “information concerning the Companies’ operations and customers in relation to cellular backhaul service.”
  • “information concerning Time Warner Cable’s projects funded by NYSERDA”
  • “projects developed in conjunction with New York State”

Comcast and Time Warner are not shy about touting the putative benefits of their merger, including extension and improvement of broadband service, low-income programs, basic broadband rates, service quality, investment, and others.  But when it comes to divulging their actual performance and actual intentions regarding matters affecting the public interest, such as internet service to schools, extension of rural broadband, service quality performance, jobs in the state, universal service, and so forth, well, that is all a “trade secret” justified by nonexistent competition.  Thus, the situation remains the same, there is insufficient available evidence to conclude that the putative incremental benefits of the merger outweigh its risks.

The PSC has invited the public to comment on the merger by July 31, 2014, although comments will be received until a decision is eventually made.  Comments can be submitted online at the PSC website.  TO date, more than 2,300 public comments have been posted, mostly urging rejection of the merger.

Updates

The PSC on July 17, 2014 extended the time for filing comments, and has indicated it will consider the merger petition on October 2, 2014:

“TAKE NOTICE that in response to a request from the
Department Staff, Comcast Corporation has agreed to extend the
period for review (47 USC §537), so that the Commission can
consider this matter at the October 2, 2014 regularly scheduled
Session. In light of that extension, the schedule for public
comments previously established by Notice issued May 16, 2014
is being modified as follows: Initial Comments are due
August 8, 2014 and Reply Comments are due August 25, 2014.”

The letter from Comcast/Time Warner referenced above states:

“Comcast Corporation and Time Warner Cable Inc. agree to action by the Public Service
Commission on the Joint Petition at the October 2, 2014 Commission Session, with a final order
being issued no later than October 8, 2014.”

On July 22, 2014, PSC Administrative Law Judge David Prestemon issued a decision regarding Comcast/Time Warner’s objections to release under FOIL of information they provided to Department of Public Service Staff.  

The decision discusses in depth the standard for releasing information under FOIL when there is a “trade secret” claim that release will cause competitive harm.  It rejected trade secret claims as to some items, any accepted the claims for others.  The decision can still be further appealed and  the information found not to be trade secrets is not yet available.

Also on July 22, 2014, the Comptroller of the City of New York Scott Stringer filed comments urging the PSC to require the merger applicants to address the digital divide and slow internet speeds and to require net neutrality in carriage of programming from sources other than Comcast/TimeWarner.  The Comptroller’s comments were especially critical of the “Internet Essentials” program touted by Comcast as its effort to make broadband more available to low income households:

“The Center for Public Integrity found that of the 7.2 million low-income families in Comcast’s
nationwide service area, only 2.6 million are eligible for Internet Essentials.iv The Center’s

analysis of customers in Time Warner Cable’s service area found that of the 4.6 million
households that earn less than the amount that would qualify them for the federal government’s
free and reduced-price lunch program, only 1.7 million would qualify for Internet Essentials
since the program is not offered to childless couples or low-income individuals.

Not only are the eligibility rules for Internet Essentials far too narrow, but the company has done
a poor job of signing up those who do meet the criteria. In fact, only 300,000 (12 percent) of
eligible households nationwide have actually signed up since the program was launched in 2011.

It is critical that the PSC not only press Comcast to significantly expand the reach of Internet
Essentials, but also that it engage in appropriate oversight to ensure that the company is meeting
its commitments to low-income residents of the Empire State.”

 

Gerald A. Norlander

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