From the skyline to the mayor’s office (to the very broadband line through which this story is being published), Comcast is everywhere here in Philadelphia. But even this company town occasionally has to go through the process of reviewing and renewing its franchise agreement with said company. Unfortunately, it looks like some of Philadelphia’s top brass may be dragging its feet on this process — and ignoring the opinions of their constituents — at the same time Comcast tries to acquire Time Warner Cable.
Nearly two years ago, when there wasn’t even a hint that Comcast would try to merge with TWC, Philadelphia began the franchise renewal process by drafting surveys that would be sent out to city residents. The results of those surveys would help inform the city’s “needs assessment” report.
Don’t Ask If You Don’t Want To KnowImage courtesy of Adam Fagen
Those surveys, one for current Comcast subscribers [PDF] and one for non-subscribers [PDF] went out in early 2014, before Comcast announced the proposed $45 billion TWC mega-merger that would give it control of the coveted pay-TV and broadband markets in Los Angeles and New York City.
But as the Philadelphia Inquirer’s Jeff Gelles recently pointed out, the results of those surveys have yet to surface, at least publicly.
Sure, it’s a big city with lots of things to do, but it couldn’t take this long just to review the answers to a handful of questions from a few hundred city residents, right? This is what interns are for.
And in fact, the city does have both the survey results and the needs assessment report ready to share. Why do we know this? Because the city has already shown this information to Comcast.
A city official confirmed to Consumerist that Comcast has indeed been given a copy of the report.
“The City believed that as a matter of fairness, Comcast should have a reasonable opportunity to review the voluminous report before its release so that Comcast could be prepared to address publicly any issues contained in the report,” explained the official.
While you might agree with the idea of giving Comcast a heads-up about the report so that it can provide informed responses when it’s made public, this stance would also seem to support showing the report to local advocates and other community groups that will be asked to respond to the contents of the assessment.
But none of the groups we reached out to had seen the full assessment. For example, Philadelphia Community Access Media, which is responsible for public access programming in the city, has only been shown survey responses directly related to its operations.
Others, like West Philadelphia’s Media Mobilizing Project, have not been given any access to the survey results or the needs assessment. The group has even begun a petition calling on Mayor Michael Nutter — a vocal supporter of both Comcast and the TWC merger — to release the survey and assessment.
“We understand that the city wants to do its due diligence — this is a once-in-a-generation negotiation,” explains Media Mobilizing Policy Director Hannah Sassaman. “But the city has been working on this needs assessment — which officially launches the franchise process — for many, many months. The longer we wait to hold public hearings, the less chance the public — and our elected representatives in City Council — will have to weigh in.”
In spite of multiple sources telling Consumerist that the delay in releasing this information to the public is coming from the top-down, the city denies that Mayor Nutter’s office has anything to do with the sluggish pace of the release.
In fact, the city official we contacted denied that there is any delay.
“The city had not set a specific date for release of the survey results or the completed needs assessment report,” explains the official. “Any perceived ‘delay’ in the release of the report is not based upon any timeline for release established by the city.”
No, it’s just based on common sense, and the belief that the survey results can’t be good for Comcast. After all, the company is already among the lowest-rated businesses — not just cable/Internet providers, all consumer-facing businesses — in the American Customer Satisfaction Index. It’s not like the service and pricing here in Philadelphia is any better than it is in the Comcast’s other service areas.
Additionally, while it’s all well and good to not surprise your hometown sweetheart with the needs assessment, advocates wonder why the city thinks it’s fine for Comcast to raise rates on Philly customers without warning.
“When Comcast raises our bills, it is almost always always a surprise – and Comcast did just that in Philly this January,” says Sassaman. “The people who need to see the results of this needs assessment are the Philadelphians who struggle to pay their bills, who are looking at starved and shuttered schools, and are wondering when they’ll get a chance to hold Comcast accountable. The time is now to start this process and release the needs assessment.”
Sassaman also notes that there are plenty of non-Philadelphia parties waiting to see the outcome of this report, especially with Comcast poised to take over pay-TV and data services for the two largest cities in the country.
“If I lived in New York, California, or another Time Warner Cable market, I’d want to see what Philly consumers think of their Comcast monopoly before signing up to let them take over my Internet and cable service,” she explains.
Ignoring The Internet?Image courtesy of Damian
Even though Comcast will soon have more broadband customers than it does pay-TV customers, there’s good reason to believe that Philadelphia leadership may ignore the issues of Internet access when it comes time to renew Comcast’s franchise agreement.
Comcast recently had to go through the process of showing the FCC that there is “effective competition” for the pay-TV market in Philadelphia. If a pay-TV provider fails to do so, then a city can challenge for the ability to regulate cable rates.
And even though the only other wired pay-TV provider in Philadelphia is Verizon FiOS, which only covers a small portion of the city, Philadelphia chose to not oppose Comcast’s petition.
“The city concluded that Comcast met the FCC’s tests for a finding of Effective Competition in each franchise area, and that Comcast’s Petition would be granted whether or not the City opposed,” explains a city official to Consumerist.
And he’s right, in that the FCC’s competition standard is based on a 1992 pre-broadband statute. Thus, the Commission can only look at pay-TV competition. So the presence of Dish and DirecTV subscribers in Philadelphia means that Comcast would have likely passed muster regardless.
Comcast Wins (And Consumers Lose) When It Doesn’t CompeteImage courtesy of Adam Fagen
But what gives us concern is when we asked the city official if he believed there was adequate broadband competition in Philadelphia. Rather than responding to the question, we were just given an explanation of why the city couldn’t use broadband to challenge Comcast’s pay-TV competition filing.
A different official who refused to go on the record would only say that a comprehensive analysis of broadband competition would be needed to determine if there was need for more broadband competition.
Yet all the city needs to do is look at its own survey, which asks several questions about Internet connectivity. There are only two named companies in terms of Internet service providers — Comcast and Verizon.
There is no need for the city to undertake a separate competition analysis. It knows where Verizon offers FiOS service. Anywhere else it’s either Comcast or Verizon DSL. That’s not competition.
“I live in West Philly, and the only ‘high speed’ Internet option for me is Comcast,” says Sassaman. “Same for my two-doors-down neighbor, whose high school daughter uses the Internet to do her homework, and whose twenty-something son uses the Internet to research and apply for work.”
And not only does Philadelphia lack competition in broadband, Comcast isn’t exactly doing a bang-up job of bringing high-speed service to customers.
As another recent Inquirer piece — this one from Bob Fernandez — points out, Census Bureau data ranks Philly 23rd out of the 25 largest cities in terms of broadband penetration. Only Memphis and Detroit ranked lower in this group.
These three cities are also the three poorest large cities. And yet, Comcast’s Internet Essentials — which is intended to provide affordable Internet access (which is so slow it no longer meets the FCC’s definition of broadband) to low-income households — has only signed up 15,000 families in the entire Philadelphia area since launching nearly four years ago. And the company won’t say how many are currently enrolled; this is merely the total number of connections made since the launch.
With Comcast about to build another skyscraper across the street from its current massive glass-and-steel thumb drive office tower, and with a franchise renegotiation on the horizon, why then did Comcast choose Atlanta over its home city for the recently announced 2Gb fiber service that will be twice as fast as Google Fiber?
“Real competition in Internet would drive down prices and drive up quality for millions in our region,” says Sassaman.
For its part, Comcast won’t comment directly on whether or not the impending presence of two gigabit fiber options had anything to do with its decision. A rep for the company did note that Comcast is investigating other cities for Gigabit Pro, though he did not given any indication that Philadelphia is or isn’t on that list of possible markets.
It Doesn’t Hurt To AskImage courtesy of Damian
Let’s be honest: It’s unrealistic to believe there is any way in which Philadelphia won’t ultimately renew its franchise agreement with Comcast. The company is so woven into the city’s economic and political fabric — Exec. VP David “Merger Whisperer” Cohen was Chief of Staff to then-Mayor Ed Rendell around the last time the franchise agreement issue came up — for that to happen.
But this is still a negotiation, and some believe that it’s an opportunity for the city and its residents to put conditions on the new agreement, which would be the city’s first in a post-dial-up world.
“The thousands of Philadelphians who pay their growing Comcast bills every month see the franchise as a big leverage point,” says Sassaman. “Our City Council and Mayor get to weigh in on our service. So the public must as well.”
In terms of what the city might ask for from Comcast, the official we spoke with would only say, “the city intends to pursue terms in a renewed franchise agreement that will ensure that the community’s future cable service-related needs and interests are fully met.”
Unless this is a case of the city holding its cards close to the vest, it doesn’t give much hope that Mayor Nutter intends to curb price hikes — which have continued to outpace inflation in Philadelphia — or make any demands in terms of broadband service.
Once again, the city seems to be taking the position that Comcast primarily provides cable TV service, when that subscriber is actually declining.
Consumer and community advocates believe this is an opportunity for the city to question programs like Internet Essentials, which has been criticized for being too restrictive in its enrollment requirements — effectively barring the elderly and those without children from taking part — and so inadequate that it fails to close the digital divide.
“Internet Essentials is one-fifth the speed of the FCC definition of broadband, and only a small percentage of Comcast-deemed-eligible families get the program,” says Sassaman, who says that Comcast could offer low-cost, high-speed, reliable broadband to the 25-35% of the city that is currently unable to access the Internet.
California state regulators, in reviewing Comcast’s request to take over the Time Warner Cable franchise agreements in the state, have asked the company to ease its Essentials enrollment standards so that they include all lower-income customers, not just those with school-age children.
There is also the issue of Comcast’s free ride on property and break on income taxes that they get from the city. Groups like Media Mobilizing Project say there’s no reason that Comcast, with its nearly $150 billion market cap, couldn’t be tapped to help fund science and technology education in the cash-strapped Philadelphia school district.
In the long-run it could help the company by giving these students an educational leg-up that would help them get into college, get a job, pay for premium cable and Internet service and maybe even work for Comcast.
“Cities nationwide have won meaningful things by organizing around these rare franchise negotiations, including protections and resources for public access TV, protections for workers who want to unionize, and resources for intra-city networks,” contends Sassaman. “All of these things should be on the table — which is why we need a robust public process to start now.”
The question remains: Will the city leadership let that process, which may put Comcast in an unfriendly spotlight, begin while the Time Warner Cable merger is still pending?
We won’t know if the city is trying to shade Comcast from this sort of public scrutiny until we all get to see what’s in that needs assessment.