After Blowing $336 Million On Failed Merger, Comcast Again Proves New Neutrality Rules Won't Harm Broadband Investment

from the watch-what-we-do,-not-what-we-say dept

Comcast’s earnings this week indicate that the cable giant everybody loves to hate spent $99 million on trying to get its $45 billion merger with Time Warner Cable approved last quarter. All told, Comcast spent $336 million on trying to sell the deal before it was ultimately squashed by regulators for being just too big and ugly. And that’s likely not including all of the costs of the deal, like the money thrown at minority and other groups to create the illusion of diversity of support for the deal. That’s money that could have been spent on Comcast’s historically abysmal customer service, which contributed to the negative public sentiment surrounding the deal.

Neither the failed merger nor the FCC’s new net neutrality rules appear to have stopped the company from its plan to deploy still-unpriced, 2 gigabit service to 18 million homes by the end of the year (including to some cities it had previously sued, threatened, and otherwise manhandled to try and stop precisely these kinds of services from being deployed). Speaking to investors and analysts, Comcast cable CEO Neil Smit proclaimed that the FCC’s reclassification of ISPs as common carriers hasn’t impacted the way Comcast does business in the slightest:

“On Title II, it really hasn’t affected the way we have been doing our business or will do our business. We believe on Open Internet and while we don’t necessarily agree with the Title II implementation, we conduct our business the same we always have, transparency and nonpaid peering and things like that. I think how it will emerge remains to be seen. We have been flexible in our packaging with HSD. We have invested significantly in our capacity and will continue to do so and that includes both the — we launched a 2 gigabit speed, 2 gigabit symmetrical speed recently. We are rolling that out across 18 million homes by the end of the year…”

Which, again, is odd given the fact that Comcast’s participating in a lawsuit where the primary argument is the FCC’s new rules are so “arbitrary and capricious,” they’ll demolish sector investment. If you’re playing along at home, Smit’s only the latest broadband industry executive to admit that the FCC’s rules really won’t hurt the sector. Frontier, Cablevision, Sprint, Sonic and even Verizon executives have all said, at one point or another, that the FCC’s new neutrality rules aren’t going to even dent sector investment.

And while some of these executives have claimed their comments have been taken out of context. They keep making the same statements. Time Warner Cable CEO Rob Marcus this week also proclaimed that nothing really changes under Title II:

“At this point in time no changes to our overall philosophy. Obviously, we’re going to be watching closely how things unfold on the Title II front. We have said [in] the past that [our] normal business practices comply entirely with the notion of the open Internet. No blocking, no discrimination, no throttling, and transparency are fundamental parts of the way we do business. So to the extent that’s the full scope of what gets implemented under Title II, I think you won’t see a change in the way we do business. To the extent that something more comes from this, as we would describe it, excessively broad granted authority, then we will have to revisit the way we are approaching investment and pricing.

Charter CEO Tom Rutdledge offered a similar sentiment:

“Well, look on the regulatory side, I mean I think every situation is different. Title II was a — it’s actually a longstanding issue. The issue of net neutrality has been around for a long time and companies have been agitating. It’s been part of the President’s agenda all along, and he campaigned on it initially. So it’s not surprising that the forces that prevailed there did. Although I wish it were structured differently and I thought that the outcome was less than ideal, I don’t think that is particularly related to being friendly or not friendly to cable in general.”

And here again we have Comcast not only saying that Title II doesn’t hurt them, but proving as much by continuing with an 18 million home fiber deployment that wasn’t supposed to be possible under the “innovation chilling” new neutrality regime. So yeah, perhaps cable executives can sit down with their lawyers currently suing the government and compare notes. Because the network investment bogeyman just isn’t scary when you consistently admit he’s just not real.

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Companies: charter, comcast, time warner cable

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Comments on “After Blowing $336 Million On Failed Merger, Comcast Again Proves New Neutrality Rules Won't Harm Broadband Investment”

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DannyB (profile) says:

What a collossal waste of money

From elsewhere I read that Time Warner spent enough so that their combined total spent on this bad idea of a merger was over HALF A BILLION dollars!

How much new fiber could have been laid with that?

How many new and upgraded routers in the infrastructure?

I know these days that numbers like a hundred million or half a billion don’t sound like much. But that is a huge amount of money. How much new fiber could be installed for only one million?

Anonymous Coward says:

First, the lawyers of these ISPs are saying Title II is so bad that fluffy kittens will die if ISPs don’t get their way.

Then, the executives of these same ISPs admit that Title II won’t negatively affect their investments.

So, which is it?

Are the lawyers and executives even speaking with one another to realize how bad this sounds? I suspect there are a bunch of lawyers collectively facepalming. How can the statements of these executives dismissing the Title II bogeyman not come up in court proceedings once the lawsuits get underway? How can the fact that they are investing now and indeed, announcing new planned investments not come up in lawsuit court proceedings?

They are torpedoing their own argument.

tqk (profile) says:

Re: Re:

How can the fact that they are investing now and indeed, announcing new planned investments not come up in lawsuit court proceedings?

If I was a shareholder, I’d be pretty annoyed that they’re wasting big bucks on frivolous lawsuits instead of investing it or handing out dividends. Are they trying to buy another smackdown from Wheeler, and how does that help the bottom line?

Anonymous Coward says:

And what is even more funny, is that the present CEO of Comcast states since the merger didn’t go through they will be working on improving their service.

That’s the same hogwash they drag out and parade around every couple of years. They are always going to improve service but somehow they never quite get around to it.

Chris Brand says:

Poor executives

It must be tough to be an executive at a public company like that, having to tell the investors that “everything is great” while telling the government “we’re in terrible trouble, you have to help us!”. I guess it’s ok as long as you can keep the latter to secret “lobbying” meetings, but when there are things like public hearings…

ECA (profile) says:

For all the money

For all the money these folks have spent…Which they Got from the Customers.
How much to update their system?
How will they rank in the next 10 years if they dont START updating their system.
GET customer service that works.

How this started..
A bunch of local small companies setup TV service in the area..And a BIG company dives ion and buys they out After the systems have been out there along time. The problem here is FIXING failing sections of each of these systems.
REPLACING an old 40+ year system is expensive…this is NOT PATCHING.

For all the money they are paying out to fight this. Even if they were Still only doing CABLE TV, they would still be replacing Tons of wires.

That One Guy (profile) says:

"That's not what you said before..."

I would love it if the judge(s) involved in the case of the ISP’s against the FCC brought up during the trial the contrast in claims between what the ISP’s are telling their shareholders, versus what they are claiming in the lawsuits.

I’m sure it would be all sorts of funny to watch them scramble like headless chickens to reconcile the two, and try to explain how claiming publicly that Title II will have no real impact on investment or build-out doesn’t actually mean it won’t have an impact on investment or build-out of their networks, they were just saying that for the fun of it.

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