Americans want faster Internet service for video and other applications and the government needs to stimulate more competition, the nation’s top communications regulator said today touching on a topic debated in Comcast Corp. (CMCSA)’s proposed purchase of Time Warner Cable Inc. (TWC)
“Meaningful competition for high-speed wired broadband is lacking,” Federal Communications Commission Chairman Tom Wheeler said in a speech in Washington today. “Americans need more competitive choices.”
Wheeler said his agency should protect and encourage broadband competition through efforts such as setting open-Internet policy to keep the Internet “free from barriers erected by last-mile providers.” He didn’t announce new regulations.
Most Americans have no competitive choice for speeds of 25 megabits per second, he said. The FCC in June reported an average subscriber speed of 21.2 megabits.
Comcast, an Internet service provider that is the largest U.S. cable company, and opponents of its planned merger with the No. 2 provider have disagreed on the proper measurement for broadband, or high-speed Internet service. The FCC and Justice Department are reviewing the $45.2 billion deal.
If a standard of 25 megabits per second is used, a combination of Comcast and Time Warner Cable would control 50 percent of residential broadband connections, deal opponent Dish Network Corp. (DISH) said in an Aug. 25 filing. The “chokehold over the broadband pipe” would stifle competition, Dish said.
Claims of harm to broadband competition from a market share of 50 percent or more are “incorrect and based on faulty assumptions or wrong facts,” Comcast said in an Aug. 22 filing.
The enlarged company will serve 35.5 percent of fixed-line broadband customers, Comcast Executive Vice President David Cohen said in a meeting with Commissioner Mignon Clyburn, according to the filing.
The FCC in an Aug. 1 inquiry asked whether it should change its benchmark for broadband of 4 megabits per second. Separately it has proposed setting 10 megabits per second as a speed requirement from some subsidized services.
Dropping slower services from the definition would increase Comcast’s proportion of broadband providers.
“Comcast would be viewed as having materially higher market share if broadband were to be defined as 10 Mbps, or 25 Mbps,” Craig Moffett, senior analyst at MoffettNathanson in New York, said in a July 8 report.
The change would bolster regulators’ authority “to impose more significant conditions on the transaction, or perhaps even block the deal outright,” Moffett said.
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