tv The Communicators CSPAN March 7, 2015 6:30pm-7:01pm EST
ots. speakers include a former nfl football player, the lead plaintiff in a lawsuit against the washington redskins, and the native rights advocate. see it starting at 8:00 p.m. eastern on c-span. host: this weekend on "the communicators,," a discussion on the future of television, the internet, and video. joining us is rocco commisso the founder of mediacom communications corporation. welcome to washington and welcome to "the communicators." what is mediacom? mr. commisso: mediacom is what they used to call cable-television companies. in fact, we started our company back in 1995. little by little our mission at that time was to go out and which is maintained, to deliver to the air in smaller markets in the u.s. same level of services
you could find in san francisco, new york city, or washington d.c. up $7.3 billion of investment. we have achieved that. we are in 22 states. we have 1500 communities in 22 states. we have 4600 employees. regenerate -- we generate $1.7 billion in revenue. i am a lucky man i have the people i have. host: reporter:are you a cable company? mr. commisso: we like to say we are a cable company but we are multi services. we started as a media company in 1995 buying assets. the wi was a one way communications effort for the most part. in the late 1990's we got into the broadband business. in 2005, we got into the telephone business. then in the last seven years we spent a lot of money and time in
getting into the enterprise commercial side of the business. host: mr. commisso, here in washington, a lot going on. the fcc's vote on net neutrality, how does that affect your business? mr. commisso: it's non-callable vote. as i keep asking everyone in washington, what have i done wrong? and they do not have an answer for me. in fact, we have done everything good and nothing bad. i just mentioned to you we have spent a lot of money to make sure that the small-market consumers and all the franchise areas that i operate at the -- get the just mentioned to you we have spent a lot of money to make same level of services as the bigger cities. i'm proud to say in fact today in each of the market -- and we don't discriminate like other companies that go into one area of us video like google-- of a city like google.
we started out with a 256 meg service. today we offer operative 300 megs download speeds in some markets. host: but to go back to the question, hollow that affect your business? how will new net neutrality regulations as they go into effect under title ii -- will they create uncertainty? mr. commisso: we want to make sure all the lawyers in washington, they can go on vacation. they have been going on vacation ii -- will they create to our three-week the year. they will go on vacation for the next year because they will be making so much money out of this. there is not a money to go around. it will impinge on our ability. it will not be seen in a month or two. on our ability to raise money at a reasonable cost, ok? for it will increase -- i have
no doubt this will increase rates to consumers. why's that? if they are going to impose regulatory fees, additional rental fees, taxes at the local level, i think utilities regulatory utilities in the states where we operate are going to get into the act. i have not found one government that does not want to raise more money. and frankly, the thing the craziest part of this thing, peter, is there is a company like mediacom tha tjust -- that just in the last four year -- i took the company private four years ago. i raised $1.1 billion in capex. we have been able to double and triple the speeds of the network
capacities we have available for our customers in the -- last 15 years. i'm just concerned that if i cannot make a return -- once we see the order -- it may take weeks or months to see the order. i'm not going to be able to keep up with the dramatic needs to advance money in our networks we can deliver what's coming down the road. host: joining our conversation this week on "the communicators" is monty talo. mr. talo: mr. commisso, commissioner o'reilly use the terms "forebearance" to express his doubts that the fcc is going to keep some of those taxes away. why don't you believe chairman wheeler when he says thosenew new taxes are not going to apply to your company?
mr. commisso: for instant, he spoke about no tariffs, no regulation, but that's on day one. he also has in the order the ability for anyone to file a lawsuit for anyone to bring the procedure at the fcc. you know what happens, right? rates are too high or whatever. i have to hire lawyers. ok, so the fact there's no rate regulation may be true today but not necessarily true tomorrow. two, once this regulatory, this monstrous migratory scheme is put into play, which goes back to 1934 when there was a true monopoly operating the phone system all over the u.s., we don't know what the next
commission is going to do. we do not know what the next re-commissioners, as you mean they are democrats, and i don't have the certainty to know exactly that three years down the road once i make the investment i need to make that i will be able to get a return. host: what should the fcc have done instead? mr. commisso: we have been a very, very strong proponent of -- what's been in place that last 15 years under bush and under clinton and in the first six years of the obama administration is a net neutrality order we have abided to. no slow lanes. it's done it's job. because frankly, when i started my company in 1995 google was not around. none of thseese companies were around. and they succeeded.
the largest for companies in the internet space just to give you an numbe. r. as we speak thaty got $250 billion other b -- on their balance sheet. how is it possible if this thing has been so bad they able to accumulate $280 billion on their balance sheet? they have debt. something has not been sent to the consumer and to the public the way it should have been said with facts and true fullness frankly, on a major issue like this which is re-regulating the entire internet under a scheme that plays back in 1934 when we only had one phone company in this country. reporter: some have said that
paid prioritization is not a bad thing. do you believe that there could be a good side to paid prioritization? mr. commisso: first of all, we lost that argument and we agreed not to have any of that. if i was in a different world, right, i iwould say, yes people should pay for what they use. meaning, people should pay for the money they get out of the network they utilize. so, let me give you an example. netflix has been a huge proponent, ok, of this re- regulation of our business. this little company called mediacom. spent $800 per customer in capital expenditure. got that number? ok? what do you think netflix spent? $6.00. so how has netflix been able to get there 50 customers?
basically bypassing the distribution, which is true in any business. even there we have agreed, ok? that was the agreement that has been put in place for the last 15 years. what we do not like and what we are going to find is th -- fight is this re-regulation of our business under a regime that already failed if you go back to the 1992 cable act. host: you say you are going to fight. does thatm 00--- does that mean in court? mr. commisso: we have three avenues to fight this and do the right thing for my consumers and my employees, whom i love very dearly. i'm the one that is going to watch after them. first of all, we have congress. and we are in full support of the legislation that has an put in place by senator thune in the
commerce committee. and i think we will see what happens there, but i think in the next month or two maybe something will happen in congress. at the same time, -- in court because are not just not going to allow three bureaucrats at the fcc to go out and change the entire ecosystem of this is is put in place. and three may be a change in administration. all right? because if there is a lawsuit taking place and it goes on for years -- by the way, the fcc does not know how to dispose of these things rather fast. i do not know if you remember the janet jackson situation at the super bowl. but i've been looking at it for eight years. they still have not resolved it. so it may take a long time to get final resolution if we go to the court system. but we may have to go that route. the best thing for everyone is for the elected representatives
of our people, ok, which is congress to go out and revisit this thing, which they have not done since 1996, and let everyone talk about it and let congress decide how is this. will be done. host: rocco commisso is a member of c-span's board of directors. you are here in town. the national table into -- cable and telecommunications association has some meeting. is there a general agreement among all companies about how to approach net neutrality? mr. commisso: within this ncta is comprised of companies from the distribution side and the content side. at the very least, within the distribution side, the distributors there is full agreement, ok? within the content side, they
are not saying you cannot sue. last time i checked i'm an american city and somebody gave me the right to sue if the government or anyone is trying to hurt my people and the investment i put in. i think, whether it's us, whether the phone or cellular industry or whether the manufacturers, cisco intels, the ibm's -- someone -- and the public interest. the public interest is not just free press and what is it public knowledge all right? it includes my customers ok. andi i don't think my customers frankly know what the hell is really going on here. and over time, they will find out that the one in washington
wants to make their bills go up. reporter: your company on the accaa have pointed out that the net neutrality rules do not prevent content companies like viacomm from blocking the way it does isp's. doesn't that fact they are keeping them from blocking give you guys more ammo against? mr. commisso: you would think so. but this is the way washington works. because we provide a bill for the consumer, it is a fact -- when espn or viacomm gets paid, they do not get paid by the consumer. they get paid by rocco. the consumer pays me and that i give them viacomm. that is a very, very critical distinction as to what we are all about as opposed to everybody else. google facebook, what consumer
complaints do they have? they make their money by selling advertising space. i maykeke my money by charging the consumer, which is -- i want to charge the consumer less not more. just make sure the suppliers of my content charge me less which has not been the case in the last 15 years. so, i think one of the problems, and we have seen it already and the 1992 cable act, when the government came in and said $20 rates for video is too high. today they are $75 no one complaints. why? all that is due to what we pay espn disney, nbc and so on. and the consumer has to foot the
bill. the same thing is happening here. this thing really it is a question of screwing the summer. that somebody else in silicon valley can get the dollar. let me give you one number, ok, again. the four largest companies in silicon valley have $280 billion, ok, on their balance sheet in cash. whereas the infrastructure -- the companies like myself, have $260 billion of debt. it does not make sense. the one people that make you money are the good guys. and the guys that are borrowing money to invest are the bad guys. host: from an isp point of view, a video and consumer point of view, should consumers be able to opt out of bundles and be able to go a la carte? mr. commisso: if the programming
community permits me to do that, yes. the contractual agreements i have, i am not allowed to permit my customers -- i've been talking about this for 15 years ok? my customers cannot do that. when you bundle product from espn and ivviacomm, it's everything or nothing. i do not think it is right. once again, let me go back to this major act was passed in 1992 where the government came in and said more competition will lead to lower prices. $75, last time i checked it is more than $25. our price tripled largely because our programming cost went from $4.00 to $45. the programming cost for month -- from $4.00 to $45 11 times.
we do not make any more money, but that money we charge the consumer is going someplace else. more competition in that particular business model led to higher prices for the consumer. now the government is trying to prove by redefining ok, what -- it really is. this 25 meg definition. they are trying to prove that we are a monopoly because there are very few people that offer more than 25. i'm in the situation that i invested the money. i had the best speeds in the markets where operate -- they speak of monopoly. maybe i should not have invested the money. i would be below 25 with everybody else and then there would be 7 competitors as opposed to one. that is the issue. it is also an issue, frankly what the other part the ffccc is trying to do. president obama went to cedar falls. was hap-- in the great state of
iowa. to talk about monopoly. tell me how that makes sense. cedar falls. there was a utility that was put in place before i got into the state of iowa. they have monopoly with water, sewer, electric, and gas. and used that monopoly status to basically go out and compete with private enterprise, right? so, he's the greatest -- the greatest entity in the entire state of iowa, cedar falls utility, because they are utility competing with rocco. they launched a 1 gig service. they have 50 employees. and rocco that's got 1600 employs. how fair is that? for him to pick and choose which side he wants to, frankly -- he wants to appease to. i can tell you that my people were absolutely upset .
we have been in that state for 15 years with the work we have done. we cover 300 different communities in the state of o iowa. nothing good was mentioned about the work they do and everything. reporter: you mentioned the bundle as a problem. wheeler said he is redefining -- mr. commisso: i do not know how that is going to work out. my people know the answers better than me, but there is all kinds of the justice, -- logit stics and regulatory issues with what wheeler is trying to do. the question is -- do i qualify? if netflix can do that -- reporter: do you think it would lead to increased competition for you guys? mr. commisso: it probably could. but listen, i lost 650,000 video
customers in the last 12 years. i've lost - i'm not proud to say that. but when somebody calls me a monopoly maybe they should look at the facts. monopolies do not lose customers. i have because people do not want to pay the money they're paying at the end of the day. now we are trying to replicate the failures of what happened in 1992 with what the fcc has done today. today is thursday the very choice six. -- february 26. i have no doubt this is not good for the american consumer, at least the consumers i serve. we'll only increase costs. if it cost me more money and i cannot pass along to netflix or google, then who is going to pay for that investment? let me give you another
statistic, if you do not mind. we are seeing a tripling of data consumption in our company over the last three years. the average consumer in our company utilizes about 90 gigs of data per month. we think we are -- amazon, apple, hulu, and a few others, right/ ? and video streaming is the big thing. besides netflix, that 90 may go to 300. that 300 in the next two or three years. if that 300 takes place, we have to spend hundreds of millions of dollars to expand our network. if we cannot get a return on that, what is going to happen to all of these new potential competitive forms of video? how are they going to be able to be launched if we can keep up wi th, on the infrastructure side? host: mr. commisso, even though
you have got 5000 plus employs -- mr. commisso: 4600. host: 1500 communities, etc., you are considered a smaller operator. do you have a position when it comes to the comcast-time warner merger? mr. commisso: we have not filed any comments with the fcc. so i think these, hopefully our market deals. and i have to live with the consequences of them getting bigger and me staying where i am. but i can accept that because that is the free market. that is the way the market operates. what i cannot accept -- if the government -- after i spent the money. i spent $7.3 billion in the last 19 years. you do not want to repeat that again. i spent it under one set of
rules, and i do not want to -- the rules to change. that's the government intrusion into my business. it's absolutely uncalled for. given what has developed in this country over the last 15 years given the fact this is the engine of our future, the engine of innovation. this internet is good for everyone. so, it's ok to take care of the big companies in silicon valley because this is not for the innovator. trust me. this has nothing to do with the garage innovator. they are being used to do that talking. but the beneficiary of what the fcc is doing is to benefit those companies, o k, that are already very big. we have no issues with the garage -- i'm a garage innovator. maybe not in the garage. i started in the basement with nothing. we are in the same sort of
situation as the garrage innovators -- garage innovators are. what we are concerned about is that frankly something that should be non-partisan, something that should be democrats, republicans, let's vote together for the good of the country, that this has been made highly political and highly partisan. something like let's take care of my base before leave office because that is who supported me to become president of the u.s. and not worry about the what do you call it, the people in iowa who helped get the president elected. host: last question from you. reporter: we were just talking about the comcast merger and something that gets brought up is bad customer service from those two company. and cable has a rep that way.
comcast, the senate is going to do something about that. mediacom had problems in that area in the past -- mr. commisso: let me tell you something, monty. you do not set a bill to the customer, you have no complaint, ok? once again the people that made the money out of our business -- on the content side or silicon valley. not one of them tends the bill to the consumer. when you send a bill to the over, they are not going to call google and complain. google is the good guy. and so is espn. but they complain to me. they complain whether prices are going up. that is80% of the problems we have. i will blame the government for that, too. if the government really wanted to make sure this thing was done well, they would have regulated it. they would have regulated the cable business, the infrastructure the distribution and they would have regulated the content guys.
because what they do right now, they really want to regulate mediacom and not gogogle. it is a one-way street. it's us that makes house calls. we have over one million -- this is a small company. we got 1.3 million customers. we do over one million truck calls a year. how many calls do you see google, apple, facebook, microsoft do? zero. ok? zero. that is the reason why the consumer complain. they blame me for raising their prices while other people are making their money. host: do you feel you have a voice at the fcc and do you think your new york senators and representatives hear you? mr. commisso: look, we are in 22 states. and we are a headquarters in new york. hopefully they will listen to us.
they listen to us when i get my peoples in a headquarters there. so hopefully they will listen to us, but we have pretty strong support i must add, ok with a lot of the political leaders in congress that come from my state. iowa, florida, georgia missouri , we are in22 22 states. hopefully they get going and try to help us and the american cymer on this major, major change to the way we do business. host: rocco commisso founder president, ceo of mediacom. monty taylolo associate editor of "communications daily." thank you, guys. >> tonight on c-span, american indians discuss the stereotyping of their culture and sports mascots and elsewhere.
speakers include a former nfl football player, the lead plaintiff in a lawsuit against the washington redskins, and a native rights advocate fighting to eliminate native american math.. see it -- native american mascots. see it at 8:00 p.m. eastern on c-span. >> you would see what they used to call when i was a kid a mutt and jeff combination or a stick ball set. washington was a large man. 6 foot. very robust. terrific natural athlete. and madision is a skinny guy. >> this sunday on "q&a," founding father james madison and the partnerships he made. >> his gift i like most is his ability to perform remarkable
partnerships with the great people of his era, but it also alludes to his gift to the country of his talents and what he was able to do to help create the first self-sustaining constitutional republic. >> sunday night on c-span "q&a." >> here at c-span around this time, we talk to you about our student documentry competition. the goal with the annual competition is to challenge middle and high school students to think about issues that affect them and their community. the 2015 theme for student cam this year was the three branches and you. we asked students to tell us a story that demonstrated how a policy, law, or action has affected them or their community. and in addition to telling it through video, we asked them to use c-span programming in their video and explore alternative points of view.