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Comcast critics cast doubt on its intentions

By , NEW YORK TIMES
Ludacris takes a selfie with Chicago students at a Comcast Internet Essentials event. The program offers broadband service to families with low incomes.
Ludacris takes a selfie with Chicago students at a Comcast Internet Essentials event. The program offers broadband service to families with low incomes.TAYLOR GLASCOCK/STR

CHICAGO - David Cohen stood between the rappers Ludacris and Chance on stage in the gymnasium of Alcott College Prep high school here one afternoon last month, holding up one of the dozen laptops the trio was giving away to the roaring crowd. The scene was like a pep rally for the Internet: Students waved posters emblazoned with Comcast's logo and the hashtag .InternetEssentials.

Cohen is one of the top executives at Comcast, the country's largest cable operator, and is in charge of navigating its controversial $45 billion takeover of Time Warner Cable past regulators. He had not slept at all the night before, he said, but made the trip to Chicago to promote the company's Internet Essentials program, which offers families with low incomes broadband service for $9.95 a month.

The program was put in place after Comcast acquired NBCUniversal in 2011 as part of more than 150 commitments it made to secure the transaction's approval. Internet Essentials was scheduled to expire in 2014, but Comcast said last year - one month after announcing its deal with Time Warner Cable - that it would continue Internet Essentials indefinitely.

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Comcast has trumpeted the program as a success story and example of how it can live up to the conditions imposed as part its big acquisitions - the NBCUniversal takeover four years ago and now its proposed takeover of Time Warner Cable, which would combine the two largest cable operators in the country. Other broadband providers do not offer a similar program.

Critics, however, call Internet Essentials a public relations stunt that failed to deliver on its promise, with restrictive qualifications, limited reach and poor service.

Comcast committed to making the program available to 2.5 million low-income households. The company announced in March that the program had connected 450,000 families - or about 17 percent of eligible households (Comcast officials say that the population is difficult to reach and that it has been harder than they thought to get people to sign up for the service).

'A bill of goods'

"Regulators were sold a bill of goods," said John Bergmayer, a senior staff attorney at Public Knowledge, a consumer advocacy group that has criticized the effectiveness of Internet Essentials and is urging regulators to block the Time Warner Cable deal. "I'd be curious whether they spent more time marketing in DC to policymakers than to people who qualify for the program."

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Lawmakers, public interest groups and corporations now are urging the regulators determining the fate of the Comcast-Time Warner Cable tie-up to scrutinize Comcast's record with the Internet Essentials program as well as its broader history of compliance for the NBC-Universal acquisition.

Several grievances

They point to several grievances, including the degree to which Comcast may have influenced Hulu, which it was forbidden to do under terms of the NBCUniversal deal. Comcast assumed one-third control of Hulu - along with 21st Century Fox and the Walt Disney Co. - when it acquired NBCUniversal, and agreed to be a silent partner.

Some TV executives, meanwhile, said they have not complained publicly or to regulators about Comcast's behavior for fear of retribution in their dealings with it. But they complain about the difficulty they have had in making their content available for streaming in Comcast markets.

Critics also point to Comcast's decision to fight a condition that required it to place Bloomberg TV adjacent to Comcast's own news networks on the channel lineup; Comcast went to court over the issue, but dropped its objections around the same time it announced the Time Warner Cable deal.

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Others cite the company's failure to promote a stand-alone broadband service that is not tied to a television package, making it hard for people to find out about it or sign up for it.

A Comcast spokeswoman, Sena Fitzmaurice, said in a statement that not a single television distributor or programmer has requested arbitration or filed a program carriage complaint in the four years since Comcast acquired NBCUniversal.

Fitzmaurice confirmed that Comcast had "one in a series of meetings" with the Justice Department on Wednesday. She declined to comment on the substance of those talks.

A Justice Department spokesman also declined to comment. Last week, people familiar with the thinking of staff lawyers in the department said they were leaning toward recommending that the transaction be blocked on antitrust grounds. That input would be preliminary and not binding on senior department officials.

Critics say that Comcast's attitude toward compliance paints a picture of an already huge company that uses its heft to its advantage.

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