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Vermont Vents at Billion-Dollar Telecom Mergers Charging Deals Will Ruin the Internet

Stocks in this article: CMCSA TWC DTV T

NEWYORK (TheStreet) - As federal regulators scrutinize a $45.2 billion merger between Comcast (CMCSA) and Time Warner Cable (TWC) as well as a $48.5 billion dollar deal combining DirecTV (DTV) with AT&T (T), small businesses are telling politicians that both transactions are likely to be a drag on start-up companies and local communities.

At a "field" hearing earlier this week in Burlington, Vermont, Senator Patrick Leahy and Rep. Peter Welch, both from the Green Mountain state, gave local resident who may not easily make the trip to Washington a chance to weigh-in on the thorny topic 'net neutrality.' 

For the uninitiated, net neutrality argues that the owner of a broadband pipe, Comcast for instance, can't discriminate among its users, i.e. favoring a deep-pocketed user such as 21st Century Fox  (FOXA), which might able to pay more for a 'high-speed land' than Mom or Pop Start-up. The hearing, entitled, "Preserving an Open Internet: Rules to Promote Competition and Protect Main Street Consumers," focused on how best to address equal access to the Internet for both large corporations and small businesses.

When Netflix signed a direct access deal with Comcast to make sure it's mounds of video efficiently move to their end users, critics argued that the agreement looked and smelled like a violation of net neutrality though both sides denied. The FCC as well said the deal was perfectly lega.

The Vermont hearing comes weeks after Leahy and Rep. Doris Matsui (D-CA) introduced The Online Competition and Consumer Choice Act of 2014, a bill that commands the Federal Communications Commission to ban preferential treatment and paid prioritization deals between broadband and content providers. If the FCC were to authorize paid prioritization deals, the internet could morph into a two-tier system that would prevent consumers from accessing content equally.

With this legislation in place, the Internet may have a better chance of remaining a reasonably level playing field in which small businesses, entrepreneurs and aspiring innovators would have the opportunity to share their content with the rest of the world. And not surprisingly, opportunity and openness not to mention freedom and democracy were just a few of the patriotically-charged words uttered at the Vermont gathering.

In an opening statement, Leahy described the Internet as a reflection of the founding principles of the United States. The Internet, he said, is founded on "the principles of openness and competition and is the ultimate marketplace of ideas where everybody has a voice and where products and services will either succeed or fail based on their merits."
In one of the only remaining realms where true democracy exists, the authorization of paid prioritization or the approval of multi-billion dollar acquisitions, could destroy the openness of the internet and turn it into a world where hegemonic monopolies reign supreme, Leahy argued.

Chief among those to appear was former FCC Commissioner Michael Copps. 

With more and more people understanding "that the Internet is the most opportunity creating tool of our time, just who will have access to that opportunity," Copps asked rhetorically. "Is the net going to be the tool of the many that helps us all live better, or will it become the playground of the privileged few that only widens the many divides that are creating stratified and unequal Americans. Are we heading towards fast lanes for the 1% and slow lanes for the 99%?" he continued.

Rep Welch made the case for rural regions. "If fast and slow lanes were to materialize, rural states in particular would be put at risk suggests," he said. "When representing rural states, there is an enormous economic absolute agency to us having an open internet...We're not going to have an economy in Vermont if we don't have accessible internet."

"We have entrepreneurs here, and a couple in the audience who have shown what can be done in a small state far removed from markets if they have access to the quality tools that are necessary to put their creative energies to work," declared Welch.

Others took up the call. Without the open internet, regional based businesses such as the Vermont Country Store wouldn't have the opportunity to "display merchandise to customers, connect with new audiences, and transact a large portion of our sales" commented Cabot Orton, proprietor of the American retail and e-commerce business.

The message from this corner of Vermont was clear: If the Department of Justice and the FCC were to authorize these multi-billion dollar deals alongside the FCC's authorization of paid prioritization, the online world of opportunity may never be the same.

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