WIRED MAGAZINE: 17.02
The Dark Lord of Broadband Tries to Fix Comcast's Image
01.19.09
Photo: Rainer Hosch
Robb Topolski couldn't stay awake. All he could manage was three hours at a stretch before passing out. At first, his doctors were baffled, though they would eventually diagnose his condition as a severe form of anemia. But for the time being, no one knew anything except that it was dangerous for Topolski to venture too far from his bed.
Topolski was a quality assurance engineer at Intel before going on disability, and he loved playing with new gadgets and software. So in late February 2007, he dragged himself out of the queen-size bed in his Hillsboro, Oregon, home, sat down at one of the three PCs a few feet away, and opened his latest toy, the file-sharing program Shareaza. He was a big barbershop-harmony fan—he'd sung baritone in Intel's One Bit Parody quartet—and he wanted to test the software by searching for some new tracks and sharing the ones on his hard drive: tunes like the Civil War-era hit "The Vacant Chair," and a Tin Pan Alley ode to prostitution, "She Is More to Be Pitied Than Censured."
Topolski pointed Shareaza to his music folder. Then he fell asleep. And that's when something strange happened—or rather, that's when nothing happened. Each time he woke up and checked his PC, he discovered there had been no activity at all. Topolski knew that his music tastes weren't exactly mainstream; but still, among the millions of BitTorrent, Gnutella, and eDonkey users out there who could see his files, no one wanted even one of his tunes? He'd search some forums for help, then fall asleep again.
After more failed file-sharing attempts, Topolski installed a packet-sniffing application so he could log and review everything coming over his network. He set up an online tunnel with a system administrator he knew in Brazil. Topolski's computer would appear to be surfing from South America, not the suburbs of Portland. That would tell him whether the problem was local.
It took him six weeks of short-burst sleuthing to reach his conclusion. In a detailed post on DSL Reports—a site for broadband enthusiasts—under his online name, funchords, Topolski laid out a case against his Internet service provider. Comcast appeared to be blocking file-sharing applications by creating fake data packets that interfered with trading sessions. The packets were cleverly disguised to look as if they were coming from the user, not the ISP. It was as if, in the middle of a phone call to a friend, Comcast got on the line and in the caller's own voice told the friend he was hanging up, while the caller simultaneously heard the same message in the friend's voice. The post generated some discussion but no response from Comcast. It did, however, catch the attention of an Associated Press reporter, who called Topolski to ask about duplicating the tests. Topolski was happy to help and tried to provide all the assistance he could, but he lost touch with the reporter after doctors told him that, in addition to anemia, he had a massive malignant tumor in his colon.
Months later, as he recuperated in the hospital after the tumor was removed, Topolski heard again from the AP reporter. The wire service had conducted its own tests on Comcast's network and the results had been equally damning. The resulting story about Comcast's misdeeds had gone viral. "Oh yeah, I think I kind of heard about that," Topolski said, the sedatives still surging through him.
"It was a pretty big deal," the reporter reminded him.
"Pretty surprising," Topolski mumbled.
"I don't think you understand," the reporter insisted. "This is a really big deal."
For Brian Roberts, 2008 was supposed to be the year Silicon Valley crowned him the most important person in its world. In five years as CEO of Comcast, the 49-year-old had turned his father's middling cable TV company into a media behemoth with $31 billion in annual revenue.
Photo: Robbie McClaran
Comcast's cable infrastructure made the Internet possible. Sure, the tech metaphor of the moment was the cloud, but—metaphor be damned—Roberts knew that nothing could happen without the pipes. You needed big, fat cables to get all those petabytes of data there and back. And increasingly, those pipes belonged to Comcast.
He didn't seek this kind of power. He spent the early part of the decade scooping up cable operations, but that was just to increase Comcast's customer base. Roberts provided packages that bundled TV, phone, and Internet, offering faster and faster speeds and luring away more and more customers from the phone companies, who couldn't keep up. (Comcast is now the third-largest telephone company in the US as a result.) As callers ditched their landlines, they tended also to abandon DSL, which the phone companies made difficult to buy as a stand-alone product. "DSL," Roberts told investors recently, "is the new dialup." Today, the company has 14.7 million broadband Internet customers, making Roberts the largest provider of high-speed access to the home, and sometime early this year he is set to wrest the title of largest broadband provider, period—to homes or businesses—from AT&T.
Sure, new technologies are constantly being touted as potential rivals: 4G wireless, municipal Wi-Fi, fiber. But none of them really have a chance. By the end of 2007, 22 cents of every dollar spent on broadband in the US went directly to Comcast. And that figure looks like it's only going to increase; the number of ways to connect to the Internet reliably and at high speed is shrinking, not growing. "There's this magical thinking, both in the tech community and the regulatory community, that competition will solve all problems," says Craig Moffett, an analyst at Sanford C. Bernstein. "Well, get over it. The evidence says we're not going from two pipes to three but from two pipes to one."
If Comcast is the one pipe that dominates, that's because its main rivals are coming up short. Verizon has spent the past few years trying to steal Roberts' Internet and TV subscribers with a $20 billion fiber-optic project called FiOS, while AT&T has its own $8 billion fiber product called U-verse. But together they cover only about 20 percent of the country, and analysts project that because of costs, they will stall at 40 percent. And reach is only one of their handicaps. In 2008, Roberts launched upgrades that made AT&T's 18-Mbps U-verse seem like a throwback to acoustically coupled modems. Verizon's problem is economics. It costs the company $4,000 to hook up each customer to FiOS, which now offers speeds as fast as 50 Mbps; Roberts spends less than $50 to give one of his customers the equivalent upgrade. As for wireless—supposedly the biggest threat to fat cable wires buried underground—no one really believes it can offer the bandwidth that consumers want at a reasonable price.
Still, Roberts doesn't want to be thought of as merely the lord of the world's dumb pipes. He wants to be known as an innovator, a reputation he planned to burnish in 2008. Early last year, Roberts was ready to debut a reborn Comcast, a company that would turn those pipes into magical delivery systems. At the 2008 Consumer Electronics Show in early January, he delivered the first keynote ever given by a cable CEO.
"We must be the technology leader," he said from the stage, reeling off a list of new initiatives, like a Hulu-style video-streaming feature called Fancast (which debuted about the same time as Hulu) and a new open software platform called tru2way, designed to allow small, third-party iPhone-like apps to be added to any Comcast-connected TV. He promised incredible customer support and the rollout of Docsis 3.0—a new Internet service with speeds that will eventually exceed 100 Mbps. "I believe Comcast is the company you will want to partner with to give consumers what they really want." He ended with a declaration that Comcast was a different company now. "It's a whole new year for Comcast," Roberts said, his eyes darting around the room. "A whole new attitude. It's Comcast 3.0."
Roberts truly believed Comcast was ready for tech stardom as the Facebook or Google of 2008. Instead, he got Topolskied. On October 19, 2007, the AP story broke with the headline "Comcast Actively Hinders Subscribers' File-Sharing Traffic, AP Testing Shows." Bloggers called for protests and boycotts; the Electronic Frontier Foundation said Comcast was using tricks formerly used by "malicious hackers." A coalition of Internet law scholars and consumer groups petitioned the FCC to step in. Instead of basking in glory, Roberts found himself at the center of the fight over network neutrality—the attempt to keep ISPs from discriminating between different kinds of traffic and, say, favoring their own video or VoIP services over another company's.
It's Good to Be the King:
Comcast's Path to Power
By blocking BitTorrent—in effect discriminating against those packets—Roberts had opened himself up to accusations that he was a censor and a monopolist who wanted to limit citizens' access to the Internet. He was painted as power-mad, unable to restrain himself. "Comcast will say, 'We're not blocking.' But they're degrading, prioritizing, and filtering, without telling users. And they're planning to do much more of this," blogged Susan Crawford, an Internet law professor at the University of Michigan Law School.
Roberts hadn't anticipated the backlash. Subscribers accepted that cable TV was just entertainment, but the Internet felt more essential, like water or electricity, and consumers were starting to think of broadband as a constitutional right. Back in the days of basic cable, consumer complaints were always local and easily contained. But the Internet, as it turned out, was different. This was becoming a nationwide battle over who the pipes belonged to. Comcast had invested billions to build its network. Now its heaviest users were demanding that Roberts effectively hand over control to them.
The new Comcast center is the tallest building in Pennsylvania, a 58-story reflective-glass beauty. When it opened last summer, its towering height sent a clear signal that Comcast had arrived. On the 45th floor, Brian Roberts can squint out over all of western Philadelphia, though today it gives him no pleasure. He's still plagued by thoughts of Robb Topolski.
"I honestly don't think we're bad people, and we have no evil intentions," he says. "We helped invent broadband."
Roberts is 6'2". He is so lanky, his gray suit jacket drapes off his shoulders as if it's still on the hanger, never touching his body. The entire company dresses the same way: formal and dated, like midwestern bankers. His speech is reassuringly calm, a nasal monotone he keeps in check regardless of his mood. Roberts could be a partner at a mid-tier law firm or a senior actuary who shoots hoops on the weekend.
Inside the boardroom, his no-style style has made him a favorite of fellow media chiefs. No jockeying for headlines, no flash, no grand competitive vision to match a grander ego. "Comcast has become our top partner, or close to it," says Google CEO Eric Schmidt, who says he trusts Roberts' intuition and dealmaking skill. When Roberts approached Schmidt about investing in Clearwire, the WiMax company started by Craig McCaw, Schmidt quickly agreed. When Roberts then threatened to pull out during the final stages of negotiations, Schmidt dutifully followed suit. A few days later, Roberts called to say Comcast was back in. Google went back in, too, investing $500 million in 2008. "He works very hard," Schmidt says. "I think many people don't understand how he operates." Rob Glaser, CEO of RealNetworks, contrasts Comcast's style with Microsoft's approach. "If I do business with Comcast and then with a Comcast competitor, I don't wake up with a horse's head in my bed," Glaser says. "Even though Brian is in a position of a lot of power, there has never been a time when he approached that in a venal or reckless way."
Yet there's a stunning disconnect between how fellow chief executives view him and what customers think. They see Comcast as arrogant, unresponsive, and overpriced. The company has managed to place last or close to last in just about every survey of customer service. In its annual ISP report, J. D. Power and Associates regularly rates Comcast in the cellar. Harris Interactive, in its annual brand reputation survey, ranked Comcast just ahead of ExxonMobil and Halliburton. Readers of the Consumerist, a shoppers'-rights blog, voted Comcast the second-worst company in the US—after only Countrywide Financial, of subprime mortgage infamy.
Roberts remains philosophical about Comcast's poor rankings. Because Comcast is the biggest cable company, he argues, naturally it gets a high number of complaints.
The Topolski affair, as far as Roberts is concerned, is all based on a misunderstanding. Every company "manages" its network by restricting and opening access to maintain speeds. Providers have little choice, especially when it comes to P2P, the kudzu of cable. File-sharing eats up a half to two-thirds of his upstream capacity in some places. And because cable is a shared network—with some 300 homes downloading from any one pipe—a few BitTorrent devotees could make everyone's surfing experience feel more like swimming against a riptide. "We manage our network so 99 percent of the people have a great high-speed experience," he says. "You've always had Ma Bell managing its network for things like how you handle voice traffic on Mother's Day. You get a busy signal occasionally."
In his heart of hearts, Brian Roberts is still just a cable guy, exactly like his father before him. And there's something about the business that makes executives a little blasè9 about consumer complaints. They've been lambasted for so long, they just don't hear it anymore. Brian's father, perpetually bow-tied 88-year-old Ralph, started Comcast in the early 1960s. Programming cost nothing—he simply took broadcast signals and piped them to homes. Government regulation (unlike for broadcast television) was nonexistent. And expansion was just a matter of finding more towns to wire. Customers complained about price and service—but they never cut the cord. "It's the greatest thing since stealing," one of Ralph's first employees told his friends.
Roberts joined the family business in 1981, right out of the University of Pennsylvania's Wharton School. He carefully studied how top cable execs worked, then carved out a new role for himself. While others were brash and self-confident, Roberts sought to be quietly persuasive. In 1997, for example, he convinced Bill Gates to sink $1 billion into Comcast, arguing that it would help spread the Internet. It was an amazing deal for Comcast. In return for his investment, Gates got nothing, not even a promise that Roberts—then Comcast's president—would deploy Microsoft's set-top-box software. Nor, for all his cash, did Gates get voting power; Roberts controls his business through supervoting shares (today he owns less than 1 percent of the stock yet commands 33 percent of the votes). "You never hear stories about how someone got the best of Microsoft," says one awed consumer-electronics executive. "Brian Roberts did. And how did he do it? With a velvet glove. He's the Bill Clinton of cable. He charms everybody."
Roberts made his biggest move in 2002. AT&T was the dominant player in cable at the time, but after the dotcom bust Roberts sensed weakness and launched a successful $51 billion hostile bid for AT&T's cable unit. Comcast had been a regional player; suddenly it doubled in size, serving 21 million subscribers. It's now the local cable monopoly in 40 of the country's 50 largest markets.
"They were just this little Philly company. Now they're like someone who, in a year, shot up from 5'8" to 6'2"," says Gigi Sohn, president of digital rights lobby Public Knowledge. "They've had to try on a whole new wardrobe and haven't found the right fit yet. They haven't done a good job of handling tremendous growth." PR disasters mounted. One Comcast cable guy fell asleep on a customer's couch; the customer filmed it and put it on YouTube. In Virginia, a 75-year-old woman got so fed up with the company's rude service and unreliable house calls that she smashed up a local Comcast office with a hammer. In the past two years, Roberts has implemented what he calls the Comcast Marshall Plan, hiring 15,000 new frontline technicians and customer service reps. By the end of 2007, Roberts assumed that his consumer-complaint issues were behind him. They weren't. In the old days, cable users might have been mollified, but Internet users were an entirely different breed.
The Ames courtroom at Harvard Law School is typically reserved for mock trials. Its 290 seats face a massive desk on a raised dais, where real Supreme Court justices occasionally sit to determine the fate of fake cases. The FCC decided to hold its hearing on Comcast's actions against file-sharing in Cambridge, and on this February day in 2008, the five commissioners took their seats in the courtroom. At a long witness table, one place was set for Comcast, the rest for its critics.
Earlier in the day, students, professors, activists, and customers gathered on the front steps of Austin Hall. Some carried signs blasting the cable giant—"No One Owns the Internet," read one—other protestors made impromptu speeches about neutrality. Before the hearing even started, campus cops had to turn people away. An overflow crowd gathered in the basement, where a computer showed a webcast of the proceedings upstairs. "It felt like the days before the Vietnam War," says David Clark, an MIT scientist who is considered one of the fathers of the Internet.
Roberts didn't come. Instead, he sent his consiglieri, executive vice president David Cohen. A longtime Pennsylvania political operative, Cohen is stocky and pugnacious, the complete opposite of his boss. Cohen gave an impassioned and unequivocal defense of the ISP's actions. "I'm going to say, on the record, in front of this commission: Comcast does not block any Web site, application, or Web protocol, including peer-to-peer services. Period. Doesn't happen," he said. "What we are doing is a limited form of network management," he added, "during limited periods of network congestion."
The response was just as unyielding. One by one, assorted Internet guardians and programmers leaned into their microphones and pointed out the inconsistencies in Cohen's statements. They noted the harm that Comcast was doing, calling it discriminatory and dangerous to capitalism, to America, to the Internet. "If Comcast gains the FCC's permission to block BitTorrent, you can bet that BitTorrent will be the tip of the iceberg," said Timothy Wu, a Columbia Law School professor. Nevertheless, Cohen seemed to really thrill the audience. He wasn't the most exciting speaker, but several times he was greeted with surprisingly enthusiastic applause.
Later, it came out that Comcast had hired shills: seat-fillers, who the company claimed were there to save places for Comcast employees. But for some reason those employees never showed up.
Comcast needed some other way to defuse the situation, so it put together a partnership with BitTorrent—"in the spirit of openness and fostering innovative solutions," as BitTorrent's president at the time put it—to find ways for the technology to travel in peace with the other packets on Comcast's network. It sounded like reconciliation, but it was only PR. While BitTorrent the company was cofounded by the same programmer who created BitTorrent the technology, it had no actual control over the standard or its users. BitTorrent fans dismissed Comcast's move as just another cynical attempt to fool the government.
At the urging of Comcast's foes, the FCC called a second public hearing, this one at Stanford University, where the man who started it all, Robb Topolski, presented his side of the story. Nobody clapped for Comcast this time, because no one from the company came.
The public beatings were beginning to hurt. In early fall, the company decided to measure just how bad the damage was by holding a series of subscriber focus groups. Most of the people, it turned out, had never even heard of P2P. In one session, a young man mentioned that he was using BitTorrent to assemble a library of every anime movie ever created. The rest of the group quickly turned on him, accusing him of stealing their broadband. "They didn't bash us; they didn't talk about poor customer service. It was actually pretty uplifting," says one employee who attended. "If you read the blogs on the P2P stuff, you'd think we were Satan."
It drove Roberts crazy to see Comcast getting trashed, to have his family's business maligned. Roberts had told the crowd at CES that he wanted to lead the technology industry, to be a senior statesperson. Now self-proclaimed defenders of the Internet were casting him as a heel. "Comcast leadership has an attitude of 'Damn the torpedoes, we're not doing anything wrong,'" Public Knowledge's Sohn says. "Well, the apple rots from the top, from Brian Roberts."
In August, the FCC issued a 67-page report that read as if Comcast was the worst company the FCC had ever regulated. Comcast lied about its actions, schemed to prevent oversight, confused customers, and put the future of Net-based innovation at risk. The commissioners doubted Comcast's contention that blocking BitTorrent helped its network. If that were the case, the report asked, why was the company doing it during times of light traffic and in areas where there were few bandwidth-sucking households? Wasn't it possible that Comcast was trying to stop a technology that was a threat to its own video-on-demand cable services? The final verdict was devastating: "In laymen's terms, Comcast opens its customers' mail because it wants to deliver mail not based on the address or type of stamp on the envelope but on the type of letter contained therein," the FCC wrote. "This practice is not 'minimally intrusive' but invasive and outright discriminatory."
The FCC didn't levy a fine. In fact, it's still not even clear whether the commission has the regulatory right to punish such behavior. But Comcast couldn't ignore the public spanking (though it's currently appealing the decision). It submitted a report to the FCC detailing exactly how its network operated, from how many homes share an upstream connection (about 100) to the equipment it used to fight P2P traffic (the Sandvine PTS 8210). Comcast swore off discrimination based on any particular technology. And it disclosed a policy that had secretly been on the books for a while but which it now intended to enforce: It would cap subscriber bandwidth at 250 GB per month, enough for a user to download 125 movies in standard definition or to watch 1,750 hours of YouTube.
"Was it handled perfectly? You know, it's like anything. I wish we could've done some things differently," Roberts says. "We hit a very raw nerve."
In the end, the geeks won. But they may have unwittingly hurt their own cause. Roberts' "concession"—putting uniform, nondiscriminatory caps on usage—will likely mark the demise of the all-you-can-eat Internet buffet. ISPs like Time Warner Cable and AT&T have begun running limited tests of capped service, penalizing consumers for going over arbitrary limits (ranging from 5 to 150 GB). Countries where low caps are already common have found themselves trailing the world in how they use broadband; in Australia, where the average cap is 15 GB, 70 percent of Internet users say they never download or watch video online.
When broadband is turned into a scarce commodity, surfing suddenly becomes a domestic negotiation: Is it worth it to watch one more Family Guy episode on Hulu, to run BitTorrent, or to download a movie from Netflix? A recent IDC study found that the vast majority of Internet users have no idea how much data they consume or even how to measure it. It's possible that Comcast's FCC-approved cure, if adopted by all ISPs, will strangle online video and drive consumers back to channel-surfing on cable TV, which would suit Comcast just fine.
To be fair, Comcast's 250-GB cap is far above current global standards, and Roberts still may turn out to be an ideal steward of Internet access, but not everyone is willing to wait around to see if he remains so generous. In November, President-elect Barack Obama picked Susan Crawford as an adviser on recasting the FCC. As a Comcast-blasting law professor, Crawford had equated Comcast's actions against peer-to-peer file-sharing with those carried out by the Net censors in China. She called the company's moves "obviously deceitful" and argued for the Feds to break it up. If Roberts thought 2008 was bad, 2009 may be shaping up to be truly horrible.
Brian Roberts is learning. And part of his education has come from an employee nicknamed Famous Frank. Last spring, a middle management customer-support executive named Frank Eliason, 36, started Twittering in his free time. Eliason is relentlessly upbeat and hated searching for "Comcast" on Twitter and seeing only slams. He asked for permission not just to defend the company but to actually try to fix the problems. If someone on Twitter complained about, say, an Internet outage, he'd start troubleshooting for them.
Eliason—who goes by the online handle comcastcares—had already been gaining attention, and accolades, when one of Comcast's senior executives realized that maybe Roberts should be clued in. She left Roberts a voicemail—voicemail, not email, is the preferred form of communication among Comcast executives. "You're doing what?" he responded in his own voice message. "We're just letting him go at it?" Nevertheless, he did nothing to stop it.
Eliason was actively trying to prevent customer complaints from spiraling into angry vendettas. These weren't just regular users, either, but Twitter users, many of whom were likely the same early adopters who love BitTorrent, who complain to the FCC, who might even enjoy building an anti-Comcast blog. Roberts began following the Twitter feed, and he realized that this was ... good. He OK'd adding people to Eliason's special forces team, overruling Eliason's direct boss.
Soon, Eliason became a minor Internet celebrity, hence his new nickname inside the company. He was asked to speak at conferences as well as to other companies struggling with similar problems.
Thanks to Famous Frank, Comcast began thinking about going even further. The weekend that the company published its response to the FCC—outlining how it managed its network and how it planned to change—one of Roberts' lieutenants suggested something even more radical: having ordinary company engineers go on message boards to answer questions. It was the kind of proposal that violated every tenet of the old cable code of business, and the matter could be settled only at an executive board meeting on the 52nd floor.
Roberts, sitting with his back to the window, listened to both sides. Then he declared it was time to be a bit more transparent. He finally got it. He was turning a page. "I think we should do this, but we all have to have thick skins," he said. "People are going to vent. But that's all right."
Senior writer Daniel Roth (daniel_roth@wired.com) profiled renegade Wall Street analyst Henry Blodget in issue 16.12.
