Recently, Comcast did what it always does….and secured a franchise agreement with a city. But what made this interesting to me is that it was one in which Comcast is allowed to build out to a very select part of the city with no plans to expand in the future.
Fred Eaton, government affairs manager for Comcast, appeared before the board seeking the franchise agreement during a meeting in June.Comcast will provide video, broadband, voice and home products and services to the already identified audience of customers, Jones said.“We do not currently have expansion plans,” he said. – HomeTownLife
But would Comcast allow another company to get such a franchise agreement in a city that Comcast currently operated in? Let’s remember that Comcast always pushes for “Most Favored Nation” (MFN) clauses in local/state franchise agreements. Most of the time, they get it.
MFN’s allow Comcast to renegotiate with a city if that city allows another company to sign a franchise agreement but with “better terms” then the deal Comcast has. This may sound normal in theory but Comcast (and all other major providers) have used MFN’s to threaten outside providers with lawsuits if those providers try to enter their city. If a provider goes to a city and says that they need 3-4 years to fully build out their network, Comcast will threaten the city and company with a lawsuit by proclaiming that any company entering the city MUST offer the exact same thing as Comcast at that moment both in terms of speeds and reach of service. Nevermind that it took Comcast years to get where they currently are in terms of provider reach in that city.
Even though the MFN doesn’t ACTUALLY say this, Comcast and others use this often and it works.
- When Google Fiber was trying to enter the Portland market, Comcast made sure that city officials understood that by allowing Google into their city, Comcast would tear up their own franchise agreement with the city, likely pay less to the city in revenues and slow investment into the city.
- When Verizon was trying to enter the Washington County, Oregon market, Comcast threatened the city with a possible lawsuit unless Verizon was given the exact same deal as them….which was done years earlier. Comcast pointed out to the city that Comcast provides cable service to almost all parts of the county, while Verizon’s proposal had no such requirement.”
- In Auroa, Colorado, the city noted that during negotiations, Comcast initially wanted the city to include “very one-sided language which would have given (Comcast) unilateral authority to determine when a new franchise had better terms.”
- When CenturyLink wanted to enter the St. Paul, MN region, Comcast demanded that CenturyLink be forced to their own build-out requirements within 5 years. Think of the children, won’t you?
“This requirement for a “level playing field” has been stressed by Comcast, not surprisingly, which has used the issue to resist CenturyLink’s expansion onto its turf in other cities. Comcast’s argument — that a provider not obligated to serve an entire city could “cherry pick” neighborhoods and leave poorer residents behind…” – MinnPost
In fact, this isn’t even the first time that Comcast wanted to go into a city and simply serve a very select part of the area….aka “cherry-picking” as Comcast puts it whenever competition comes their way. In 1999, Adelphia sued Comcast in Florida for specifically serving select areas and not expanding outside of those wealthy parts. Comcast won (though it was due to procedural mistakes by Adelphia).
So, let’s remember….Comcast is AGAINST competitors trying to cherry-pick areas as the poor and young will suffer. But if they want to do it in cities they don’t currently serve? That’s fine.