Some Unease in Tech Circles About Comcast Deal

Feb 13, 2014

Some Unease in Tech Circles About Comcast Deal

SHIRA OVIDE

Most big Silicon Valley companiesremained mum after the Comcast-Time Warner Cable deal was announced, despite the fact that many of them rely oncable companies and others to deliver broadband service to homes. But some venture capitalists and other high-tech executives weighed in.

Some of them fretted about the possibility that a bulked-up Comcast could gain additional leverage it could use to hobble competing digital video services or other websites.

“If we have less choice and the gatekeepers just get stronger, the gatekeepers will stifle innovation,” said Bijan Sabet, a partner at venture capital firm Spark Capital.

Sabet and several other executives expressed hopes that the Federal Communications Commission would use its oversight of the merger to strengthen the still-evolving policies and regulations that are sometimes summed up by the phrase “net neutrality.”

Technology companies, particularly startups, long have said broadband providers such as Comcast shouldn’t be allowed to discriminate among Web content by granting some companies faster Internet connections.

As part of Comcast’s 2011 acquisition of NBCUniversal, Comcast already has agreed to abide by net neutrality provisions. The company offered to extend that pledge to Time Warner Cable markets if the merger goes through, even though the FCC’s own net neutrality rules are in flux after a court ruling last month.

Brad Burnham, a venture capitalist with Union Square Ventures, said Comcast’s proposal didn’t go far enough. He said the FCC should move to put Internet service providers under the same stringent rules as telephone companies, which long have been required to create a level playing field for all phone calls.

“The trade should be Title II regulation,” said Burnham, referring to the part of the FCC code dealing with telephone companies.

Fred Wilson, a partner of Burnham’s at Union Square, also said the FCC should use theComcast merger to push more broader availability of super-fast Internet services based on fiber-optic cables. Comcast said Thursday it faces stiff broadband competition, including from new Internet services offered by Google Inc.

But the Web-search giant offers its Internet access in just a handful of cities such as Austin, Texas, and Provo, Utah. “If we could get fiber in every market, we could have a three-way competitive market,” Wilson said.

A Google spokeswoman declined to comment on the transaction Thursday.

Some tech executives also said they believe Comcast after absorbing Time Warner Cable would have more resources to expand its own digital-video services, and give them preferred treatment over those offered by companies like Netflix Inc., Amazon.com Inc. and Apple Inc. “Step Two is they’re going to do their own version of these services,” Sabet said.

Comcast also has put in place caps on how much Internet data a household can use each month. The company has said the goal is to limit the tiny fraction of subscribers who hog a disproportionate share Internet bandwidth and slow down speeds for everyone else.

It’s unclear how the merger might spread broadband-usage limits to Time Warner Cable, or whether in the future Comcast will apply the caps to a bigger chunk of its subscriber base.

“Consumers want their content, anytime, anywhere, on all their connected devices,” said Charlie Nooney, chief executive of MobiTV, which makes apps to access digital-video services.

“I believe that the FCC recognizes the power of consumer choice and will be very mindful of the way the market is headed when they review the Comcast-Time-Warner deal.”

Comcast CEO Brian Roberts, in a conference call Thursday, called the deal “pro-consumer, pro-competitive and strongly in the public interest.”

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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