Comcast CEO Brian Roberts: It’s time to pay the postman. (Just FYI: I am the new postman)

57 Comments

Credit: Comcast

Faced with difficult questions about his company’s pending takeover of Time Warner Cable — which would combine the two largest cable internet providers in the U.S. into a company consumers will likely hate twice as much — Comcast CEO Brian Roberts made one thing very clear: his company is determined to sit directly in the middle of the tech world.

Roberts, speaking at the Code Conference Wednesday, said Apple co-founder Steve Jobs once told him that Comcast “should be the best dumb pipe,” a common sentiment in the tech industry that internet service providers should get out of the way of the content and device industries and just provide reliable broadband service. But avoiding that low-margin fate has been a telco vow for decades, and Roberts made it very clear that Comcast wants to be “the best pipe.”

That means it wants to preserve a gatekeeper role. In a series of analogies, Roberts likened his company’s role to that of a postmaster, pointing out that Netflix pays hundreds of millions of dollars to mail DVDs to its customers but now expects to be able to deliver the same content over the internet for free.

“They would like it all to be free. I would like to not have to pay for cable boxes,” he said. Delivering bits over a pipe seems just a wee bit more cost-effective than paying the energy and labor costs of physical distribution, but Roberts didn’t get into that.

What should it cost to deliver content over the internet? It’s a contentious question for several reasons. One, of course, is the pending merger, which we believe would hurt broadband consumers by reducing competition and decreasing the incentive for Comcast to upgrade its networks over time. Then there is the debate over net neutrality and paid peering, which are separate issues but ones in which Comcast finds itself in opposition to a lot of tech and new media companies.

Perhaps it’s not surprising, then, that Roberts greatly preferred to talk about the traditional television landscape compared to broadband issues, although interviewers Walt Mossberg and Kara Swisher — aided by audience questions — did their best to force him to talk about broadband.

Code-conference-ticker

57 Comments

Mcbeese

We can talk about fast lanes and slow lanes, but I think that is partially a smoke screen designed to bamboozle our technically illiterate government representatives.

A better way to express what Comcast is doing is to say that It is DOUBLING its internet transport prices. Charging twice for transport of the same bits. Even the FCC should be able to understand the issue when expressed in those terms.

guest

yes but some of there equipment about 90percent is over 10 years old or older by as much as 20 years they just reuse this equipment and they don’t want to rebuild there inferstructure to compete all the main lines are over 25 years old or old some of there lines are still from the anglog era

Danny More

You can bet Con Crap will get Crap Warner… As all The Idiots in DC and the FCC have been bought off.
When Con Crap takes over Crap Warner. And put’s the caps on the net use. Slows it down And try’s to get me to buy into the fast lane crap. I will see what kind of shaft they are going to try to give me. If its a big one. Bet it will be!
I will tell them to fuc$ off. Cancel all my Online movie stuff. And just use NetFlix in the mail.
And RedBox if I want..And buy the DVD’s that I want.
Comcast can put it up there a$$. And the FCC can to..
Just more B.S.. And Greed!

Jenni Randall

They get to screw us because they buy Congress.

Joe Schmoe

Unanimous, American citizens HATE Comcast and sees it as an entity that has existed as a Monopoly outside of necessary regulations for FAR TOO LONG. Let’s see if the Capitol is listening. (doubtful)

Stephan Krause

I’ve been paying the postman for 15 years at quite a premium. That postman in turn has been taking that profit and in turn investing it in his ancient failing Chevrolet Chevette (cable television), while I’ve not seen an increase in speed or reliability.

John Smith

Dear Brian Roberts, You are pathetic! Pay the postman huh? Hmm, I already do, I pay for my connection with your cleverly worded, “up to” speeds for which I NEVER experience. If I ever call to inquire of my lackluster service, I am directed overseas to someone that can barely speak English, let alone understand anything beyond reboot the modem. How about that I pay “up to” the amount listed on my bill so that it better correlates with the true “service” I am receiving? You think that you have made Comcast the best that it can be and are ready to merge? You are so far out of touch with reality, but I guess being one of the HIGHEST paid CEOs EVER creates a distortion field that fools you into thinking that your monopolies are well run, customer loved business with strong, rational management. Wow, must be nice to deny the loathing we, your customers, have for you and your, cough, company. Just know this, if there is EVER a choice to go to another carrier, WE WILL and we will be grateful for the competition you so deserve. It will be fun to watch you get your butt kicked.

Trajan Saldana

perhaps all these tech companies should form a consortium to create their own ISP and bypass Comcast, TW, Verizon FIOS, ATT, etc. That would solve that problem in a heartbeat.

joe

ALL Cable companies need to update to fiber cable, the over rated slow speeds and high prices I’ve been around 34 years. It’s time it came to the 21 century ! HIGH SPEED 1GB like Google Fiber ! is the 21 century Speed of the future.

rightim

I thought I was paying $60/month for access the content I want when I want it. The analogy of the postmaster doesn’t work here as that would mean the sender and the receiver of the mall would be paying. Netflix makes a service available but they only send it when I as a paying customer request it.

lpress

Comcast could invest in the infrastructure needed to insure rapid delivery of Netflix and other’s traffic and pass that cost on to the paying customers at a fair rate of return on the investment. But, they make more money by refusing to upgrade their infrastructure thereby slowing delivery of content and making their customers dissatisfied with the content providers like Netflix. If there were competition in the ISP market, customers would switch to the ISP that provided the best price/performance, but since there is not competition, Comcast is able to reap monopoly profits. If they happen to have a competitor in a given location, perhaps AT&T, they together reap oligopoly profits.

What is the solution? One hope is for Google Fiber to provide meaningful competition, which might work in the short run, but one has to wonder about the long run — cities with Google Fiber would still be oligopolies.

Another hope is Verizon and other phone companies, but it seems the cable and phone companies have reached a gentleman’s non-competition agreement with phone companies focusing on mobile connectivity and cable companies on fixed connectivity.

I can’t think of an alternative other than government (at all levels) providing our connectivity as we do with roads and, in many cases, utilities.

Kim Maddaluna

How about Comcast deliver what is promised via speed? Next step class action against Comcast for unfair practices and false advertising. I pay for the service detailed with what speed and I expect that speed 100% of the time.

Sick of Comcast!!

Derek Bolander

So if this guy thinks Netflix should pay for “postage” of digital content, does that mean I can stop paying a monthly bill to Comcast?

Peel

In the postal analogy, the sender is the only one that has to pay. Now in the internet analogy, he wants the sender(Netflix) and receiver (isp consustomers) to pay. Greeeedyyyy!

fcc

Dumbest analogy of all time. Why did nobody call him in it? The post man doesn’t collect fees from the sender and recipient for the same delivery.

Sad. Because we all know the FCC will allow this merger to go through.

q

If I could add anything to these comments, I would. But it seems that everyone here has easily and already pointed out Brian Roberts’ illogical thinking and bad analogies, and that Comcast desires double dipping, a monopoly, and screwing their customers while slowing down progress.

Steve Raymond

A better comparison would be the electric companies, who are heavily regulated because they are granted a de facto monopoly due to the fact that it doesn’t make sense to build competing capital intensive power grids. Comcast’s great core competency is lobbying to keep the government from acting in the public’s best interest.

There is no danger of Comcast ever becoming a credible tech company – they are bean counters.

Bitch Republic

Cable companies will soon go away. Netflix, Hulu, iTunes, etc are taking the TV/Movie content away from cable. Google Fiber et. al. will take Internet away from cable.

raminic

Netflix doesn’t expect to send it’s movies over the internet for free. I pay to download the information based on an unlimited stream at 50mbps (which has never gone above 22mbps and usually sits around 10mbps – thanks comcast) and Netflix pays to connect to the internet on their end. Technically we’re paying twice. Wait, Comcast is also extorting money out of Netflix for steady (non- throttled) access – a price that was recently passed on to Netflix customers. So I’m actually paying three times the amount to access these streams.

chris

i love when someone uses an analogy that’s not entirely accurate….. Currently ISP’s are designed in the reverse format of the postal service, where the recipient pays up front to receive their content as opposed to the postal service model where the business pays the courier fee…..but who am I to argue, the time it took for him to formulate that ignorant statement likely cost Comcast more than I make in a year.

Guest

Hey Bri….I am paying the postman. Your not keeping up your end of the bargain.

VernonWalter

Nationalize all broadband just like the Postal Service and then we can talk. He’ll work for a public salary and pension right? Thought so – false analogies are false.

ZBhatti

Comcast or any other internet service provider has the right to charge fairly for their service like any other vendor. That being said, they need to choose their pricing model in a transparent way:

1. Stay with the current bundled model: consumers and service providers pay for their end of the box and bandwidth.
2. Unbundled pricing: parties pay for their end-point boxes some per-packet fee between the two parties. I pay for what I send, Netflix pays for what they send. I am open to paying for my QOS and Netflix can pay for theirs. The parties in the middle figure out their shipment charges to each other.

The model cannot change everyday. We have followed (1) so far as billing and tracking is simple/easier/cheaper.

On the merger side, I think that it will certainly be a disaster for the consumers. We pay the some of the highest prices and get some of the poorest service in the entire developed world. Somebody needs to show how the consumer wins in the pending deal.

Madlyb

Did you actually expect any other response?

Just look at this history. Cable companies got into the broadband business because it was a fairly profitable way to reuse existing infrastructure that supported their primary cash cow, but as always, the world evolved and Content Owners wanted more money at the same time as customers were starting to use broadband for content delivery rather than the cable companies distribution system. So, if they aren’t making money off of cable anymore, then they have no choice except to extract it from the secondary business.

And as much as we want them to be dumb pipes, it will never happen because dumb pipes aren’t as profitable as what they are currently doing and I never met a company that was altruistic enough to screw themselves and their investors for a noble ideal.

I hate these folks with a passion, and these latest rounds have only incensed me, but I never had any doubt they would anything other than what they are currently doing.

DrDookieTrouser

level(3) is a public company that has been losing money for 16 straight year essentially screwing over their shareholders in order to be “the low cost provider you can count on”

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Dave

So Roberts fails to see that the end user is paying the postman to deliver the content not the content provider…did anyone ask him about that?

Joseph

The thing is that they’re already being paid. They sold a connection to Netflix, etc. and Netflix pays them for it.

This is no different than the cellular carriers selling unlimited plans and then deciding to stop offering them. Let’s hope consumers are more resistant to those shenanigans this time.

Bobson

“Delivering bits over a pipe seems just a wee bit more cost-effective than paying the energy and labor costs of physical distribution, but Roberts didn’t get into that.”

The more apt riposte is that USPS, unlike Comcast, does not charge mail RECIPIENTS for the privilege of having mail delivered.

Mcbeese

Exactly. In the case of the Post Office (and UPS, etc.), only one of the parties pays for the delivery, not both.

tsahilevi

Funny. If Comcast is the postmaster, then its customers shouldn’t be paying for their set top boxes or delivery – just like they don’t pay for their mailbox and letters.

Oh – and I heard post offices are close to dead around the world. Wouldn’t want to be compared to them these days anyway.

PhiladelphiaFreedom

I pay Netflix for content and delivery of DVDs. Some of that they pay to the Post Office on my behalf.

I pay Comcast for Internet.
I also pay Netflix a lower amount for streaming content than for DVD delivery.

Netflix doesn’t have to pay the Post Office for delivery of streaming content on my behalf. And they shouldn’t have to pay Comcast to stream to me because I’ve already paid Comcast directly for Internet.

Comcast is making Netflix pay them to stream to me on my behalf. Using the money that I paid to Netflix.

In other words, Comcast is charging me twice for the same Internet.

Comcast has to pay for cable boxes. Comcast makes me pay for the cable box, so Comcast is purchasing the cable box and taking title on it and then leasing it to me.

Comcast should charge ESPN a cable box access fee – charging ESPN for the right to use the cable box that I am already leasing from Comcast.

Why not? ESPN would raise their content price to Comcast who would then pass it along to me the consumer. Why not double dip on the cable box?

Guess who the dumb pipe is?

Ed

be careful if Netflix doesn’t pay for it then you will be paying twice because your future rates will increase. Someone has to pay for the increased traffic. Don’t be stupid let Netflix pay.

Gary

There is an elephant in room called Netflix which is hogging a large part of the entire internet system. You do pay more for postage on larger items, and certainly not the same as a letter. Mr. Roberts analogy is correct.

Mcbeese

Netflix isn’t ‘hogging’ anything. Netflix’ customers are choosing to use the Internet connectivity they have paid for to connect to Netflix. It is pull, not push. Comcast is making BOTH ends pay to stream the SAME bits.

Commonly known as ‘double dipping’.

Drengor

You are incorrect. The sender always pays.

Comcast offers you a much lower cost as a residential customer with the provision that you cannot run a server. This is specifically to contain the number of packets you transmit that they have to deliver. Depending on their peering agreements, they may have to pay for any packet you transmit to a destination off their own network. They never have to pay for a packet coming in to you.

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