The Consumers Union and the Consumer Federation of America Wednesday asked
federal antitrust regulators to investigate cable operators' practice of giving
price discounts on Internet service to their television-service subscribers.
"We believe these arrangements involve such steep discounts that they
constitute anti-competitive tying -- and possibly even predatory pricing schemes
-- in violation of our nation's antitrust laws," the groups said in letters sent
to Federal Trade Commission chairman Timothy Muris and R. Hewitt Pate, acting
assistant attorney general for antitrust.
Specifically targeting Comcast Corp.'s practices in several markets, the
groups charged that the company's discounts are intended to squelch
video-programming competition from satellite TV, which generally cannot offer
competitive broadband Internet products.
They said bundled Comcast TV/broadband service is being offered as much as
$15 below the monthly marginal cost of basic-cable service.
In Pittsburgh, for instance, Comcast is raising the monthly price of
broadband service from $42.95 per month to $57.95 for customers who don't also
buy TV service. Basic-cable subscribers, on the other hand, can get cable-modem
service for roughly $45 per month.
"If there ever were a candidate for an investigation of predatory pricing,
this would be it," the groups told regulators.