Comcast’s week just got notably worse with the news (barring some last minute miracle) that the cable giant will likely be walking away from its $45 billion acquisition of Time Warner Cable after leaks suggested the DOJ and FCC will likely be blocking the deal. Regulatory opposition was based in part on the belated realization that Comcast had failed to adhere to the conditions set in its 2011 acquisition of NBC, despite the fact that most of the conditions were volunteered and engineered by Comcast to be as meaningless as possible. The real deal killer however? More than a year’s worth of unrelenting, negative media attention for what’s arguably some of the worst customer service in any industry.
Leading this latest merger sales job for Comcast was top lobbyist David Cohen, who played a starring role in getting Comcast’s 2011 acquisition of NBC approved, earning him the reputation for being a telecom policy and lobbying “rock star.” As any well-paid lobbyist would, when tasked with a new merger to sell, Cohen repeatedly pushed a litany of utterly unbelievable deal benefits pulled entirely out of the ether, denied absolutely every criticism as illegitimate and irresponsible, then proudly proclaimed that nobody “reasonable or knowledgeable” could possibly object to the company’s merger.
Cohen’s secret weapon during the NBC acquisition was something Comcast called its “Internet Essentials” program, which provides $10, 5 Mbps broadband to homes that qualify for the National School Lunch Program. Cohen consistently touted Internet Essentials as an utterly selfless, altruistic effort to close the digital divide, wholly unrelated to the company’s attempt to grease the M&A rails. There’s many reasons why Cohen and Comcast failed to win the hearts of consumers and regulators, but Internet Essentials perfectly exemplifies Comcast’s unique brand of hubris.
The program became an absolutely massive public relations boon to Comcast, which held junket after junket at schools across the nation, patting itself on the back for being a noble corporate citizen, with Cohen and politicians endlessly photographed surrounded by smiling children as they pretended to crush the digital divide in classrooms across America. The PR success of the effort even prompted Cohen to start calling himself Comcast’s “Chief Diversity Officer,” despite the fact the title’s real goal was to help him dodge legal lobbying restrictions on how many hours a week he can lobby.
Since it worked so well for the NBC deal, Cohen and his lobbyist team started hyping the program even more heavily for the Time Warner Cable deal. The problem was, by this point people were starting to see through the effort. The program started taking national media heat for being hard to find, hard to qualify for, rife with caveats and little more than a faux-altruistic show pony for regulators. As a result, depending on the state, only about 11 to 15% of the millions of eligible households were able to sign up for the program. Stanford Law Professor Susan Crawford recently called Internet Essentials a “customer acquisition program masquerading as a philanthropic gesture,” highlighting the restrictions Comcast baked into the program to ensure it had to do as little heavy lifting as possible:
“…only low-income families with school-age children are eligible for the program. It does nothing to close the digital divide for other underserved groups like the elderly, the disabled, and low-income childless adults. Plus, it’s hard to apply: the California Emerging Technology Fund says that it takes two or three months for applications to arrive. No existing Comcast customers are eligible — no matter how “low-income” you are, you can’t decide to reduce your bill by applying for Internet Essentials instead. (Families have been told to drop their Comcast service for 90 days and then try signing up — a terrible hardship for anyone.)”
Whenever anybody pointed out that Comcast’s effort was anything less than the pinnacle of nobility, Cohen trotted out a brand of snotty rhetoric that only managed to make the company seem less likable than ever. Case in point from a blog post this week, in which Cohen once again tried to “set the record straight” about the deal benefits:
“And while it may be easy for critics to do this from the sidelines, we would rather try, in the spirit of President Kennedy, to light a candle than to curse the darkness. The reality is that Internet Essentials has been one of the most successful, if not the most successful, private sector initiatives to close the digital divide ever. And it’s not just Comcast that says this; scores of credible civic and community leaders have said the same…But to those critics and business interests that want to take shots at the program, we say join us in the fight against the digital divide to make broadband a reality for all Americans, working together to do more, rather than sniping at cross purposes to run down what has been done.”
To be clear here, Comcast is offering a limited number of homes a $10, 5 Mbps down, 1 Mbps up broadband service that costs the company virtually nothing to provide, then behaving as if it had just cured bowel cancer. Meanwhile, the lion’s share of the “credible civic and community leaders” supporting the program are usually paid to do so. Most importantly though, Cohen ignores that these amorphous “critics” of the program are the same poor families he breathlessly claims to care so much about. Said critics had to protest in Comcast’s hometown of Philadelphia to get Comcast’s attention regarding the failures of the program:
“A 10-year-old back-due cable-TV bill for $180 made Hawkins ineligible for the $9.95-a-month Internet Essentials that Comcast publicized as an aid to closing the nation’s digital divide – the term for the substantial number of poor people who can’t afford $50-a-month Internet service. Hawkins didn’t think that was right, and Comcast wouldn’t agree to a payment plan. She has a son, Khyrie, then a fifth grader at L.P. Hill Elementary School on Ridge Avenue. “They opened a can of worms with me,” said Hawkins, who helped organize a protest in 2012 at Comcast’s Center City headquarters to present executives with bologna sandwiches that she thought represented its Internet Essentials program.”
Internet Essentials was the very heart of Comcast’s Time Warner Cable merger sales pitch, as it shifted the focus away from Comcast’s poor customer service reputation and toward Comcast’s manufactured image as a champion of diversity, propped up by a chorus of astroturfers on the Comcast payroll. Cohen pitched a laundry list of other imaginary deal benefits that were equally negligible, from hallucinated cyber security improvements to claims the deal would be a boon to creative people everywhere.
But as AT&T found out when it tried to claim that killing T-Mobile would magically increase wireless competition, there actually is a line you can cross when it comes to lobbying bullshit and blistering hubris, even in Washington DC. However, government only respects that line when consumers can be bothered to pay attention, and they were certainly paying attention here after two decades of being abused by one of the least competitive, most apathetic industries in American history.