New FCC Rules and Stopping Comcast

Fcc_logo1Edinburgh   Some things are certain today.  It will rain in Scotland, and Comcast will continue to quickly exercise monopoly power over the internet, almost making a mockery of the recently proposed “new” rules by the FCC to curb exactly these kinds of abuses.  Comcast and Netflix came to an agreement for Netflix to pay them more to insure faster and more reliable service to Comcast subscribers that are also Netflix members. 

The costs of course are expected to be passed on to consumers.  Absent a monopoly, we might wonder to whom, but since Comcast controls localized monopolies in service areas, customers have little choice but to have chosen them, so it will presumably mean Netflixers will pay more.  In a competitive environment different than what exists, Comcast might absorb some or all of such costs in order to attract more cable users, but, why bother as a monopoly.   All of which of course argues once again that the Department of Justice simply must act to prevent Comcast from controlling 40% of the internet broadband customers based on its territorial control.

The new proposed rules continue not to regulate the internet as the public utility that it has become, though they do open the door for increased local provision of cable service similar to Lafayette, Louisiana’s operation and the high speed programs installed by Google in Kansas City, soon Austin, and perhaps another 30 cities in active discussion.  Google’s local cable play is smart and decidedly a public service, but it is also a firm recognition of the same problem of cable and internet monopoly control by Comcast and others.  Helping cities expand local cable service is not really a public service for Google, but an act of self-protection to keep Comcast and its imitators from setting itself up as a toll collector on the internet highway for them and their search engines.  They are hedging against the Comcast monopoly even while the government is still silent about acting to prevent this expansion.

Comcast’s legions of lobbyists and governmental relations folks swamping nonprofits and others with torrents of cash to try and quiet any cries for justice now parrot their public relations line that they will follow the old rules, overturned by court decisions, until 2018 as a condition of their earlier acquisition of NBC/Universal with the FCC and extend that for Times-Warner.  Given their arrogant disregard of their commitment to lower the digital divide as part of the same deal for lower income families, there’s no reason to believe their intentions or implementation will be any better for these promises than those requirements.

If the FCC is ready to finally assert jurisdiction and tell state legislators, bought and leased by Comcast and its buddies, that they cannot stop local service provision, why not go the rest of the way.  The whole argument by the cable guys is that they spent billions to lay the lines, so they have the right to use them any way they want and charge whatever they can get away with.  The government should simply buy them out at a fair price or seize them through eminent domain as a public service they safeguard and assure for all citizens equally. 

Might be the best couple of billion we ever could spend to invest in all of our futures.

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Pushing Back the Banks in the Wake of Occupy

tumblr_lt7r2hsiK51qav5oho1_500 Orleans Given all of the niggling around the impact of the Occupy Wall Street movement and its impact, it is worth raising some footnotes a little higher on the tally sheet where the results are important, but perhaps unnoticed.  Take these recent developments into account.
Small example, but telling is that JP Morgan Chase, perhaps the most arrogant of banks led by Jamie Dimon, announced that they were NOT planning to add the surcharge onto customers’ accounts for use of debit cards.  Bank of America, which had led the jump into the deep water with their announcement of the $5 per month charge, has also indicated that it is perhaps backing up from its Netflix moment in the wake of customer response.

As we have discussed earlier, lawyers who have successfully litigated with these outfits have called this nothing but grant larceny.  I had the discussion with my banker at Capital One who could only rationalize that it was being considered because “they had to raise money somewhere.” We all know that the defense that “you needed the money” is both the truest and least effective response any criminal can make.

The Times did a sad service with a front page article on the shrewd calculations that Bank of America and its colleagues have made by pushing direct and automatic payments for customers to their regular vendors from utilities to credit card companies to home mortgages and back again.  The story was an easy reminder for readers both how easy it is to sign up for such payments and how hard it is to unravel them to the degree you become welded to your bank regardless of the outrageous charges and abuse.   We are near the point where we are going to need to demand an easier “exit” policy from our banks, just as we had to achieve with our cell phone companies around keeping our phone numbers in recent years.  The little things can kill you!

Even though Occupy has not been successful in seeing any traction on the urgent “Geithner Must Go!” campaign to hold him responsible for some much of the Wall Street pandering and pampering he led first as the critically important head of the New York Federal Reserve Bank, the storm may finally be coming on the horizon.  Amazingly a story in today’s Times documents the giveaway with AIG where banks were paid in full from the federal coffers and were not asked to take any haircut, but in face were even required to shave.  Even banks that offered to take less that they were owed were informed by Geithner’s Fed, since he was head at the time, that they would be paid in full.

At least Geithner, now at Treasuery, with Ben Bernacke at the Federal Reserve are having to line up to finally provide some regulation for non-bank banks in recent hearings in the wake of Occupy.  Of course it is not enough, but even bringing 30 financial institutions like Mass Mutual, Zurich, some hedge funds and outfits like Blackrock and others under regulation because they control over $50 Billion in assets is something.  The Financial Stability Oversight Council still has to wait for comments so the lobbyists will be feeding at the trough, but at least now they need to realize that they might have to reckon with real, immediate, and potentially powerful political outrage if the boys give yet another break to the bankers.

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