Comcast Overlooks Rural America Again, And It’s Not Without Consequences

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Betsy Huber President, The National Grange
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Small town USA wants and needs the same services, conveniences and options found in New York City, Los Angeles or Washington, D.C. Yet, companies serving rural communities face barriers to making this happen.

Some of these barriers are due to the fact that these areas have fewer people, are farther from population centers and are settled in rougher terrains that make broadband build-out a challenge.

But other barriers can be attributed to market choices made by bigger companies that exercise their market power to overcharge rural firms – a key reason why many rural areas remain inadequately connected if at all.

For the past 20 years, rural broadband providers have been working to spread their services to small towns across the country. Because this type of expansion is often cost-prohibitive, such companies often take a risk in doing so.

By putting people before high profits, these broadband service providers, most of whom are small businesses, are investing in people — something mass media conglomerates, such as Comcast/NBCU, have been unwilling to get behind. Notwithstanding these efforts, more work is needed to reach the millions who are still getting less than those in urban areas.

Many have wondered how a company as big as Comcast/NBCU affects small-town America? The answer is actually quite simple.

First, it decides not to invest in rural America. Of Comcast’s nearly 21 million customers, less than 6 percent live in rural areas.

The company also makes value decisions for the customers in rural markets, charging small rural providers higher fees, reportedly as much as 30 percent higher, to carry popular NBC programming than large urban providers, which eats away at the cash that rural providers can then plow into building and upgrading their broadband networks.

These investment decisions undercut rural Americans and make it so rural providers cannot win.

They face the reality of either losing customers if they increase service prices or bringing in smaller profits, leaving them less likely to have the capital necessary for investment in broadband infrastructure. The latter is often the choice these providers make, which ultimately benefits companies like Comcast because, without broadband, these areas will have little to no access to online video services such as Netflix and Hulu, which compete with NBCU programming.

When the merger between Comcast and NBC Universal was given the green light in 2011, federal agencies subjected the new conglomerate to conditions that were supposed to keep higher programming fees in check.

For example, Comcast/NBCU was required to submit to arbitration in program access disputes with small- to medium-sized cable operators. Now that this key condition has expired, however, the company has been unleashed to leverage control over consumers and competitors in the market.

For 150 years, the National Grange has been an advocate for rural Americans, from rural mail delivery to electrification and now to the fight for equitable access to broadband. We stand opposed to actions that leave those producing much of our nation’s food, fiber and fuel vulnerable to corporations who put profit interests before people.

Currently, Comcast/NBCU does not possess any incentive, financial or otherwise, to help rural communities thrive. We believe companies should be rewarded for expanding and innovating in rural

America, not punished for it. It has become increasingly clear an unleashed Comcast will take a toll on rural Americans’ access to critical information services.  It is imperative for mass media conglomerates that own rights to both programming and distribution to be subject to binding conditions that keep their power in check. It’s time for Comcast/NBCU to be reined in.

Betsy Huber is President of The National Grange.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.