Using words like "behemoth," "harm." "undermine" and "deny" in reference to a combined Comcasdt/NBCU, Earthlink general counsel Samuel DeSimone Jr. plans to tell the Federal Communications Commission it needs to make mandatory wholesale access to at least four independent Internet service providers a condition for the agency to approve the union.
That is according to prepared testimony for a House Communications Subcommittee field hearing on the proposed deal Thursday July 8 in Chicago.
"The dramatic increase in the scope and scale of Comcast's control over programming and content, combined with its dominant gateway control over the broadband access network, raises the risk that the transaction will result in less competition, diminished choice, decreased information diversity, reduced broadband network investment, and higher costs for consumers," according to DeSimone.
In his testimony, he wrote that Comcast does not make its service available to the majority of its footprint, and where it does--Boston, Seattle, Houston and "a few other relatively small metropolitan areas" -- the price is a disincentive.
"Comcast's refusal to offer EarthLink wholesale services in the majority of its footprint has essentially excluded EarthLink and other independent ISPs from providing consumers a choice of competitive broadband services in many markets where Comcast is the only highspeed option," according to DeSimone. "EarthLink's current contractual arrangement with Comcast is limited geographically in scope to the Boston, Seattle, and Houston markets, as well as a few other relatively small metropolitan areas, which represent only a small fraction of consumers passed by Comcast. Moreover, the pricing of this limited arrangement renders the wholesale service uneconomic for consumers. As a result, competition and consumer choice is further constrained."
"There is competitive choice in broadband markets," countered Comcast spokeswoman Sena Fitzmaurice in response to the characterizaton. "For example in the Chicago area, consumers can chose from AT&T DSL, Verizon Wireless, Clearwire, Comcast, RCN, WOW, and other options."
"Earthlink's requests for wholesale regulation are not new," she said. "They have been pushing these policies for a decade. Other resellers like AOL have moved on and changed their business models. Wholesale regulation was not a successful policy, it does not lead to investment in facilities based competitors. To the extent this issue should be addressed, it should be done on an industry-wide basis."
The Federal Trade Commission imposed open-access conditions on the combination of AOL and Time Warner, which Earthlink points to as precedent it would like the commission to follow.
At the time, then National Cable & Telecommunications Association president Robert Sachs said that it should not be a template for future deals and was unique to AOL's dominance--then almost half of the Internet access market.
Comcast estimates it has about 20% of the market at most -- less if dial-up is included.