CenturyLink accuses Comcast of using lobbying heft to block it from competitive areas
CenturyLink (NYSE: CTL) has accused Comcast (NASDAQ: CMCSA) of using its influence with local government officials to prevent the company from entering markets where the No. 1 cable operator is entrenched.
The charge is among a flurry of accusations directed at Comcast, as dissent filings to the Federal Communications Commission, urging the rejection of Comcast's proposed purchase of Time Warner Cable (NYSE: TWC), go public.
According to the CenturyLink filing, which was obtained by Ars Technica, CenturyLink accused Comcast of sending letters to local franchising authorities, requesting they block entry of new competitors.
"Comcast has been uniquely and extraordinarily aggressive in seeking to delay CenturyLink's entry into new markets," CenturyLink told the FCC. "For example, in the Denver metropolitan area, where CenturyLink is currently pursuing local video franchises, Comcast appears to be sending a similar letter to each local franchising authority from which CenturyLink is seeking a franchise or potentially might be seeking a franchise providing Comcast's 'concerns' regarding CenturyLink's entry into the video market. The 'concerns' that Comcast has raised, while couched in terms of 'fair competition,' are in reality an effort to have the LFA [local franchising authority] impose such onerous and unreasonable buildout requirements that the new entrant will not be able to obtain a franchise agreement that will support a feasible business plan."
For its part, Comcast has argued to these local officials that CenturyLink shouldn't be able to enter regions where it's not committed to building out its network to all residents, the implication being that poorer households will be left out.
In a statement to Ars Technica, Comcast said, "We believe competitors should have to live under the same requirements as incumbents, that means no redlining poor communities, no cherry picking of only providing services to wealthier communities--it means service to the entire community. This has been our consistent position, that new entrants should be prepared to live under the same rules we have for decades."
CenturyLink's gripe surfaced as more specifics of Netflix's (NASDAQ: NFLX) FCC merger rebuke requests became public too.
As obtained by Quartz, Netflix's filing includes comments from VP of content delivery Ken Florance, who described how the SVOD service began losing an unspecified number of subscribers as Netflix's streaming service on Comcast suddenly degraded in the fourth quarter of 2013.
"For many [Comcast] subscribers, the bitrate was so poor that Netflix's streaming video service became unusable," wrote Florance, adding that Comcast customer service reps advised customers to take their issues up with Netflix. "Those customers complained to Netflix and some of them canceled their Netflix subscription on the spot, citing the unacceptable quality of Netflix's video streams and Netflix's inability to do anything to change the situation."
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