As TV subs cancel, monopoly control of broadband pipes is Comcast’s best hope to grow business

by Steve Blum • , ,

As TV subs cancel, monopoly control of broadband pipes is Comcast's best hope to grow business

Comcast offered the perfect example last week of why big, monopoly broadband companies hate the idea of network neutrality, and are stuffing politician's pockets with cash arguing so eloquently against it.

Comcast's traditional cable television business is bleeding subscribers and revenue at an increasing pace, but its broadband business is booming. The company reported its second quarter 2018 financial results last week. It gained 260,000 broadband subs, but lost 140,000 video customers, which led to a 1.9% decrease in video revenue. Losing video subs is nothing new, but declining revenue is. It's the first time that's happened, according to a story by Ben Munson in FierceVideo.

The reason is Netflix and its over the top kin, according to Comcast CEO Brian Roberts, who spoke on a conference call with analysts

Continuing competition from virtual contributed to our 140,000 video customer net losses in the second quarter. We remain focused on segments that we can serve profitably as part of a broader relationship with the customer centered on a whole home experience.

One way of creating that “broader relationship” with a “whole home experience” is to manipulate customers' Internet traffic so the video content Comcast sells comes first and the bandwidth used to carry it is cheaper.

That's what paid prioritisation is all about. There are different ways to game it and Comcast lobbyists have tied themselves up in semantic knots trying to redefine paid prioritisation so that Comcast can claim to be against it while building fast lanes for itself. But it comes down to the same thing: use monopoly control of Internet service to make, say, Netflix's video streams slower and more expensive for consumers than Comcast's.

The potential, and the reality, of that kind of abuse of market power is the reason that the concept of non-discriminatory access and open pricing for critical infrastructure came in being – the common carrier principle. It's as applicable to broadband today as it was to ferries four hundred years ago.