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Comcast Seeking Control of Both Pipes and Content? 241

techmuse writes "Reuters reports that Comcast may be attempting to use its huge cash reserves to purchase a large media content provider, such as Disney, Viacom, or Time Warner. This would result in Comcast controlling both the delivery mechanism for content, and the content itself. Potentially, it could limit access to content it owns to subscribers to its own services, thus shutting out competing services (where they still exist at all)."
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Comcast Seeking Control of Both Pipes and Content?

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  • Bad timing (Score:5, Insightful)

    by DoofusOfDeath ( 636671 ) on Sunday August 16, 2009 @02:33PM (#29085591)

    We can only hope that they're one Administration too late to pull it off.

    • Re:Bad timing (Score:5, Insightful)

      by Darkness404 ( 1287218 ) on Sunday August 16, 2009 @02:42PM (#29085657)
      Yah right, all they need to do is say that it will get them more money to either A) expand broadband or B) create more jobs, and you can bet that it will be accepted.
    • Re:Bad timing (Score:5, Insightful)

      by goombah99 ( 560566 ) on Sunday August 16, 2009 @02:45PM (#29085699)

      Well, historically Democrats are in bed with the Hollywood types so it's not a certain thing that media owners might not see some love too.

      But besides that I blame this on google. Yes google and their don't be evil motto. Seems like there's this fixed amount of evil and if one company tries not to use evil then it just accumulates somewhere else.

      • ...if one company tries not to use evil then it just accumulates somewhere else.

        A systemic problem requires a systemic solution.

      • Re: (Score:3, Insightful)

        by LostCluster ( 625375 ) *
        Hollywood is a divided town politically. The actors tend to be liberal because they're artists, the execs tend to be conservative because they're in business.
        • Re:Bad timing (Score:4, Insightful)

          by jaycagey ( 675302 ) on Sunday August 16, 2009 @06:46PM (#29087073)

          Business != Conservative

          Just because people are in business does not mean they're conservative. In fact, one would expect liberal-dominated industries to attract business-minded liberals. A quick look at opensecrets.org shows that donations from the "TV/Music/Movies" [opensecrets.org] category go overwhelmingly to the Democrats. This category represents employees of entertainment companies (rather than the artists who contract with them) so it would cover all those supposedly 'conservative' executives. In 2008, donations went 78% to Democrats and 22% to Republican. In 2004, at the height of the Republican tide, it was still 69% Dem - 30% Rep

          If you break it down to the sub-categories, it gets even more lopsided. The 2008 percentages (Democrat - Republican):

          The only subcategory that shows anything near parity is Commercial TV and Radio stations [opensecrets.org] with 53 - 47. Presumably this includes all those local TV stations in 'flyover country'.

          So no, Hollywood is not divided politically, even among the non-artists it's overwhelmingly Democrat.

    • Re:Bad timing (Score:5, Interesting)

      by Fudge Armadillo ( 916515 ) on Sunday August 16, 2009 @02:55PM (#29085761)
      This would likely not cross into anti-trust territory. Besides, they have tried it before... http://money.cnn.com/2004/02/11/news/companies/comcast_disney/ [cnn.com] Large cable companies are running out of small mom & pop providers to buy, and have amassed huge cash reserves, which they would like to find something to do with, one of which is to buy a large content provider, or possibly (though they keep denying the rumors), buy a wireless provider. Most of the wireless providers in the U.S. are too large to be taken over by even the largest cable companies, though.
      • Re:Bad timing (Score:5, Interesting)

        by Stupendoussteve ( 891822 ) on Sunday August 16, 2009 @03:13PM (#29085881)

        Or they could pass the savings on to the consumer, by maybe not jacking up their rates yet again.

        No wait, that would never happen. It's not like people are locked in to a single provider...

        • Re:Bad timing (Score:5, Interesting)

          by lambent ( 234167 ) on Sunday August 16, 2009 @03:26PM (#29085961)

          what are you talking about? a very small percentage of people have the ability to choose between two, or even three providers! the system is obviously NOT flawed. /sarcasm

          i agree with your sentiment, they'll never actually LOWER prices. my experience with comcast is that they will raise prices by at least a dime every month, just to condition you to it.

          • Re: (Score:3, Interesting)

            With WiMax and 4G/LTE Networks deploying all over the place, we are starting to see real competition. Real unlimited data, just capped speeds (and very reasonable at that-- CLEAR has plans starting at $20/mo. and unlimited data @ 768/128).

            Free market solving in a way we never expected it to, please leave alone for now.

        • by mgblst ( 80109 )

          So I guess if you could live on less money, you would ask for less pay? Oh no, that would never happen, so why should a company, whose profits are much more important to its health, do the same?

      • Re:Bad timing (Score:5, Informative)

        by iluvcapra ( 782887 ) on Sunday August 16, 2009 @03:48PM (#29086115)

        This would likely not cross into anti-trust territory.

        When the film industry was finally taken to court over their vertical integration in US v. Paramount [wikipedia.org] in 1948 the large holding companies that owned the production arms and theaters were forced to divest. Note though, the FTC had begun investigating the flim business for their abuse of their integrated delivery system in 1938, and it took 10 years of court cases and broken consent degrees with the Justice department before the deed was finally done.

        Also note, the fact that Lowes owned MGM and Lowes Theaters, or that Paramount owned Paramount Studios and Publix Theaters was not sufficiently illegal for the court/FTC/Jusitce to take action. The real issue was that the holding companies used collusive formula deals and clearance and run arrangements to keep independent film producers from having a venue to show their own movies. The original complaints to the FTC were made by independent production companies that didn't own their own distro arm -- the first people to file suit were original United Artists partners and Sam Goldwyn, who sortof reminds of Mark Cuban minus the swearing.

      • In the end, there will be one huge provider that has control over both ends, as well as content. And it will be 'regulated' by the government as a 'required monopoly'.

        We the people will lose out, as always. But it was fun while it lasted! Anyone else miss the early BBS days when freedom was a given?

      • Re:Bad timing (Score:5, Interesting)

        by Eil ( 82413 ) on Sunday August 16, 2009 @05:18PM (#29086625) Homepage Journal

        Large cable companies are running out of small mom & pop providers to buy, and have amassed huge cash reserves, which they would like to find something to do with,

        Oh, like upgrade their effing infrastructure? Months ago they were complaining about how much money they were losing from "high-bandwidth users," peer-to-peer applications, and streaming video sites. But now they have huge cash reserves?

        Kinda like how the RIAA companies always claim to be struggling after losing billions of dollars a year to piracy but turn around to their shareholders and say they're making more sales revenue than they ever have before.

    • Re: (Score:3, Insightful)

      We can only hope that they're one Administration too late to pull it off.

      If you're counting on one man to save the world, you've been watching too much TV.

    • Re:Bad timing (Score:4, Insightful)

      by krou ( 1027572 ) on Sunday August 16, 2009 @03:18PM (#29085917)
      As Bill Hicks said, "I'll show you politics in America. Here it is, right here. 'I think the puppet on the right shares my beliefs.' 'I think the puppet on the left is more to my liking.' 'Hey, wait a minute, there's one guy holding out both puppets!'"
      • Lemme guess .... the puppet-master is a JOOO!?

        Bill Hicks is a comedian. He might say things that sound clever and interesting, but don't for one second confuse his act with reality. You may as well get your political commentary from the teletubbies.

        • Re: (Score:3, Informative)

          by krou ( 1027572 )
          Actually, my point was that both Democrats and Republicans are different factions of the same party, namely the Corporate party. Bill Hicks's description is quite apt and correct. Just because he's a comedian doesn't mean he wasn't right. The OP's claim that Comcast are one Administration too late implies that somehow Democrats are going to be any different, which they're not, except perhaps superficially.
    • Why in the world should the feds get involved in this? They buy Disney and... shudder... you can't see the newest Disney movie unless you buy Comcast cable?

      Really, our government needs to worry about things that actually matter.

      • Re: (Score:3, Insightful)

        No, the real concern is that it will be the other way around. If you buy Comcast, you can only watch Disney movies. Which will be even worse for those with whom Comcast is their only available provider.
        • Only provider of what? Cable TV? That's my point... who cares? Blockbuster, Netflix, the internet, video games, books, newspapers, magazines, over-the-air, satellite, "cellular" cable... the options for your idle time are nearly limitless.

  • But think of the lower prices! We can live better!
    • Re: (Score:3, Insightful)

      by Z00L00K ( 682162 )

      We see this in many areas. Soon you will have to select brand of TV depending on cable operator too.

      Like it is today with some telecom operators - you may only select the phones THEY are offering, not the phone you want.

      • Nope. The FCC is ahead of you on this one. All of the major cable companies offer CableCARD devices that handle the decryption, and that's a standard that allows you to purchase any compliant TV or settop box. TiVo's main product is now based on this technology.

  • FCC! Now! (Score:3, Interesting)

    by blackraven14250 ( 902843 ) * on Sunday August 16, 2009 @02:36PM (#29085615)
    Shouldn't there be FCC regulations against this potential nightmare scenario? If not, why not?
    • Re:FCC! Now! (Score:5, Insightful)

      by copponex ( 13876 ) on Sunday August 16, 2009 @02:56PM (#29085767) Homepage

      The FCC has no interest in protecting individual rights or promoting a competitive market. They are there to sell off public assets to private corporations, and enforce rules and fines to ensure societal conformity to the morals of politically important voting blocs.

      If Comcast is prevented from acquiring someone due to federal interference, they will probably sue because they will claim that the free market is being tampered with. Just like any corporation, their definition of free market has nothing to do with the liberty of individuals to have access to a competitive market system. It has to do with the corporate right to be unbound by any rules and have the freedom to stifle competition and destroy the market for their own profit.

      To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the publick; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens... It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have upon many occasions, both deceived and oppressed it. --Adam Smith

      • Re:FCC! Now! (Score:4, Insightful)

        by ScrewMaster ( 602015 ) * on Sunday August 16, 2009 @03:21PM (#29085935)

        If Comcast is prevented from acquiring someone due to federal interference, they will probably sue because they will claim that the free market is being tampered with.

        As the summary states, Comcast has an enormous stash of (not-so-hard-earned) cash. They're acting like squirrels: if they see food they don't need right away, they just shove it into a hole somewhere until they find a use for it. That probably should not be allowed: it's one thing to put something away for a rainy day, but when corporations end up so flush with cash that they can influence entire markets and ruthlessly suppress competition something is wrong. It also means they're probably significantly overcharging for their goods and services (as an ex-Comcast-down-to-the-depths-of-Hell subscriber I can attest to that.)

        Comcast's management also has other things in common with squirrels.

    • Re: (Score:2, Troll)

      by falconwolf ( 725481 )

      Shouldn't there be FCC regulations against this potential nightmare scenario? If not, why not?

      No there shouldn't be any FCC regulations preventing this. Actually the FCC should not exist, it was created for mass media businesses, there is no Constitutional authority granted to the government to create the FCC.

      Falcon

      • BS.

        The FCC was created to enforce communications law, with the most important goal of restricting the RF spectrum because if it was a free-for-all environment, too many people would be transmitting on the same part of the spectrum at the same time and nothing would work.

        That's why TV stations are allowed to make money under the condition that they serve the public good (and agree to censorship limits) on the public resource. If you want to do content that doesn't fit the rules of broadcast TV, go to cable.

        • The FCC was created to enforce communications law, with the most important goal of restricting the RF spectrum because if it was a free-for-all environment, too many people would be transmitting on the same part of the spectrum at the same time and nothing would work.

          This is BS! Before the FCC was even created courts [mises.org] were already ruling that the first person broadcasting on a certain frequency had the right to that frequency. It's called homesteading [againstmonopoly.org] the airwaves.

          Falcon

      • by unitron ( 5733 )

        The alternative to the FCC was complete control of the airwaves by the military.

        • The alternative to the FCC was complete control of the airwaves by the military.

          No, before the FRC, the predecessor to the FCC was created courts were already ruling for homesteaders. The first person who broadcast on a specific frequency in a specific area was allowed to use that frequency there. If someone else in the same area started broadcasting on the same freq they could be forced to stop broadcasting on it.

          Falcon

    • Yep, there is. Cable networks that need to be distributed via satellite feed must be offered to all pay TV providers under reasonable terms, and broadcast TV stations have to either require they must be carried by all pay TV carriers in the area, or can collect reasonable retransmission rates. They can't exist on only the provider that owns them... there's only limited local sports and news channels that can afford to distribute via landline to stay cable-only.

      The only place where we're seeing national prov

  • I didn't realize that Cable TV was such a lucrative market that they could afford to buy a media conglomerate.
    If there's so much profit in the market, maybe there isn't enough competition.

    • Comcast's days as a monopoly-by-default are over. There are two DBS companies that offer almost the same lineup of channels nationally. Also, AT&T and Verizon both are actively wiring their areas with a new network that's capable of delivering TV content too. Look out... challenges ahead!
      • There are also four mainstream Cell Phone providers, and they already Collude on things like SMS picing.

        Comcast is a dumb pipe, just like ATT/Verizon, etc. Municipalities need to get there hands out of the lobbyist cookie jar and realize it would be better off for their citizens to just lay the fiber themselves then to contract it out to one (in some places two) companies who will screw the consumer given any chance to do so.

        If they don't want to lay the fiber, then lay down 1-2 meter concrete conduits in a

    • I don't think you realize just how small the "media conglomerates" are. The pundits don't seem to consider Disney a likely target despite the Slashdot summary and the other two are much smaller than Comcast. Disney is slightly smaller and Comcast made a bid for it once before. While the "media" industry is very loud, it isn't all that large.

  • by Darkness404 ( 1287218 ) on Sunday August 16, 2009 @02:44PM (#29085677)
    Its times like these where the landowners and cities that own ground where Comcast's wires are going through should have leased the land and forced them to pay more or upgrade the infrastructure to keep up with the times to keep using it. With the pathetic condition of Comcast's network, they should use the money to make their network halfway reliable.
    • Its times like these where the landowners and cities that own ground where Comcast's wires are going through should have...

      This isn't a problem for any self-respecting mad scientist with a penchant for high energy experiments on shielded wiring.

  • by Associate ( 317603 ) on Sunday August 16, 2009 @02:45PM (#29085683) Homepage

    when it was called AOL.

    • Which is why it'll be ironic if they end up buying Time Warner.
      • by vlm ( 69642 )

        Which is why it'll be ironic if they end up buying Time Warner.

        1) TW just recently split off TW-Cable from the TW-content empire. So, it would be weird if TW-Cable's competitor comcast, would buy TW-Cable's previous owners, the TC-content group. Genealogically I guess it would be like .... I really can't describe it. But I don't think it fits the definition of ironic, unless you subscribe to the "street definition" where ironic simply means anything that makes you think.

        2) Last time around, the pipe-company AOL bought the combined TW empire, mostly for the content.

  • by erroneus ( 253617 ) on Sunday August 16, 2009 @02:48PM (#29085719) Homepage

    Using one market to leverage another? I'm not lawyer and I've been mistaken about this sort of thing before, but this really looks like a bad thing and that the justice department should weigh in on this sort of thing. I think sooner rather than later the ISPs need to be designated as common carriers and not allowed to play in certain arenas.

  • This seems like a fast way to force Net Neutrality laws, as the resulting carnage of takeovers and mergers create segregated islands of content. Even congressmen and senators should find it difficult to swallow needing all of a Comcast, AT&T, and Verizon connections to obtain their Disney, FOX, and HGTV channels.

    Although I also think the telecoms are underestimating the power of the "independent" content providers, like Google or Yahoo. Clout-wise, companies like that might actually be able to extract p

    • Net Neutrality would prevent other providers from refusing to carry Comcast content. It wouldn't prevent Comcast from refusing to provide content.
  • by girlintraining ( 1395911 ) on Sunday August 16, 2009 @02:53PM (#29085749)

    I think it's clear that our strength is technology and our weakness is the legal system. The legal system will always be in favor of those with deep pockets and have (at best) a tenuous grip on the ethical and moral considerations of the larger society. It's become so ineffective, insepid and innane as to become harmful to society -- Forget them. Laws do not govern moral conduct and never have. Integrity has no need of rules! But that's just a stop-gap. We need new technology -- and I think we need to go back to the basics to get there.

    We need to bring the internet back as a peer-to-peer exchange, but to do that we're going to need to create protocols that are specifically designed to resist attack and interference from intermediaries. The original concept of the internet was based on a flawed model that the network could be trusted to deliver packets from point A to point B using the same logic throughout; It was assumed that the network would be managed by a central authority. This hasn't been the case for awhile, and now we are seeing an increasing desire to bend and break the original standards to serve commercial interests. The protocols must be redesigned to only present the minimal amount of information necessary -- the source and destination, and the actual payload encrypted and made tamper-evident.

    To hell with demands that we have protocols with data exposed for "law enforcement", "national security" or "protecting the children" or any other specious argument. The ultimate expression of democracy is the free flow of information between citizens, and that's an ideal that comes ahead of all other considerations: We need to make a conscious and deliberate choice to accept the risks that come in embracing those early ideals, and not let the edge cases (terrorism, sexual predators, and elvis) sway us from the immense benefits of doing this. If the signal is to travel at all, it must travel freely.

    If this doesn't come to pass then our future as a democratic society is at an end. Democracy is more important to me (and I hope you as well) than my personal safety or material comforts. A free and open communication medium between all members of society must be a universal, because it's the only way to maximize our individual and collective potentials. This is another step in a slow descent into a life we do not want, and we won't notice until it's too late how much we've lost.

    • Re: (Score:3, Informative)

      by cpghost ( 719344 )

      The original concept of the internet was based on a flawed model that the network could be trusted to deliver packets from point A to point B using the same logic throughout; It was assumed that the network would be managed by a central authority.

      As a WAN admin with 20+ years of experience in NOCs, I beg to disagree. The Internet design is based on the assumption that network pipes and routers (and whole Autonomous Systems (AS)) will fail, and that traffic will route automatically around disruptions. As s

    • Oh, like Freenet? Its a nice idea to take it back, except they will just throttle any alternatives out of existence.

  • The pipes being the last mile cable line to your house. This is why they can get away with much of what they do.

    The FCC would do well to force the cable companies to give up ownership of last mile infrastructure to allow cities and neighborhoods to open those lines up for multiple, competing ISPs.

    • Nah, we've got a better solution in the pipeline. Phone companies are actively re-wiring their service areas with new networks capable of delivering phone, TV, and 'net. It'll take some time for them to fully deploy, but everywhere they have hit, Comcast has been forced to update their network to compete.

      Regulation is nothing compared to a solid competitor.

  • by alen ( 225700 ) on Sunday August 16, 2009 @03:05PM (#29085827)

    Doesn't anyone remember the AOL/Time Warner merger? it was approximately 10 years ago now that it was announced. it was a dismal failure as technology changed in 2 years to make the whole thing worthless. The only media deal that can make sense is to buy the NFL, MLB, NASCAR or NBA because people will pay up for sports even in a recession. If the Disney channel suddenly becomes a premium channel I won't be getting it. even though i have a child.

    and with Verizon laying fiber along with AT&T were a few years away from another networking technology explosion that will make this deal obsolete.

    • If the Disney channel suddenly becomes a premium channel I won't be getting it. even though i have a child.

      You forgot your history. Disney Channel launched as a pay-for-like-HBO scrambled premium channel. So did most of the sports networks that show local games.

      What these content baskets realized was that it was more profitable to take a few cents for every subscriber (even the ones that don't care about you) instead of getting a few bucks from everybody willing to pay just for you. That's why everybody's c

  • Old news, surely (Score:3, Interesting)

    by OscarGunther ( 96736 ) on Sunday August 16, 2009 @03:34PM (#29086009) Journal

    They've already tried to purchase Disney once before, as I recall. I think there's no question of anti-trust on this; we're talking a straightforward attempt at vertical integration within an industry. Comcast can even argue that Time Warner and Viacom have already set precedents for the acceptability of such a merger and that, in fact, Comcast needs to do such a deal to remain competitive.

    • Comcast can even argue that Time Warner and Viacom have already set precedents for the acceptability of such a merger and that, in fact, Comcast needs to do such a deal to remain competitive.

      Correct, Time Warner had a cable unit. [wikipedia.org] So this kind of deal is not anything new. However, I think the scariest scenario is Comcast owning Disney.

  • ...Disney, Viacom, or Time Warner sounds like a real public service to me. Seems improbable, though. More likely they would make some of the pay services of whatever outfit they bought free to their subscribers. That might squeak y the antitrust "regulators", as well as actually being commercially feasible.

  • disney is already doing this to all ISP's with compulsory wholesale licensing a-la cable TV.

    If you have any major ISP (ATT, Comcast, etc) you are unknowingly paying disney for ESPN360 even if you dont use it.

    ISP's resisted this for quite some time, but disney/espn started offering it free to university students, and presenting them with a message when they went home in the summer saying "complain to your ISP because they're not paying us".

    It doesn't matter at this point of comcast buys disney/viacom/whateve

  • Comcast has roughly $1B in cash, and $30B in debt. Disney has a market cap of ~$45B, and Viacom $15B, Time Warner is at ~$30B. Comcast's total market cap is $45B.

    While they would love to own a "must have" content provider, so would I. I think we are both roughly in the same position for being able to pull it off. I have a $5 bill handy...

    • Disney is not considered a candidate, despite the Slashdot summary. They could easily borrow enough to finance a combination cash-stock deal for either of the other two (i.e., each Viacom shareholder would get some cash and some Comcast stock. The loan would be secured with Viacom's assets).

      I don't think it will happen, though. Wall Street seems to be pretty down on the idea.

  • If it's good for the shareholders, it's good for you!

    Time Warner did it with AOL, and look how well that .... errrr ... heh. NVM.

    • > If it's good for the shareholders, it's good for you!

      If you aren't a shareholder it doesn't involve you, but the shareholders don't seem to think it's good for them: the stock is down on the rumor.

      > Time Warner did it with AOL, and look how well that .... errrr ... heh. NVM.

      Lots of commemtators are pointing to that example.

  • Shut out Comcast completely. Who needs "traditional media" anyway nowadays.

    You can even do it all alone by yourself.

  • They owned the connection, they owned the content, they had their little walled village with ads as far as the eye could see and redirects to every possible "premium partner". And then came 1996...
  • Potentially, it could limit access to content it owns to subscribers to its own services, thus shutting out competing services (where they still exist at all).

    Isn't that pretty much the old "AOL" plan of attack... stuff you could only get from us (as long as you don't look around very hard).

  • LOL. Where I live, we think of Time Warner as the delivery mechanism, not the content provider: Time Warner Cable + Road Runner Internet + Intenet Phone.
    I think the question of whether Time Warner's content can be owned by an internet provider was answered many many years ago.
  • Potentially, it could limit access to content it owns to subscribers to its own services...

    That's step 1. What's step 2?

    Limit subscribers' access to just the content it owns.

  • Then every other broadband customer has to pirate their media or pay a "Comcast Tax" when purchasing physical media. Maybe this'll wake up the consumer types.
  • They better not have more cable only channels I want CLTV on direct tv, wow cable, rcn cable, dish network and U-verse.

    Comcast Chicago land is big rip off we pay same as the city of Chicago but get less HD, Syfy is in preferred / classic and speed is in sports pack other comcast areas have both in lower cost analog (ending 2010), starter and clear qam. There also have high box rent costs $16-$20 per HD DVR and $7-$10 per HD box. $5-$7 per SD box (needed to get many channels) The free DTA will not get all th

  • Isn't this the trend in general? Not that i approve, but why are we sitting here acting surprised? This is what tiered service is all about.

  • by brunes69 ( 86786 ) <slashdot@[ ]rstead.org ['kei' in gap]> on Sunday August 16, 2009 @05:35PM (#29086713)

    Has the poster never heard of Time Warner Cable? You know.. the nations second largest cable network and one of the largest ISPs in the US?

    Pretty sure Time Warner already owns pipes AND content... seeing how they still own AOL and about a dozen high-traffic websites, not to mention a ton of TV channels and network programs (each of which has substantial web content of course)

  • On one side, this has already been tried with Time Warner. Time Warner used to own the second largest MSO in the country, Time Warner Cable [wikipedia.org], which they spun off in March, 2009. Why would Time Warner spin off their Cable division if integration were so profitable?

    On the other side, you have the fact that Comcast has dipped its foot into web technology. They bought Plaxo [wikipedia.org] in March of 2008. But they haven't been acquiring traditional media.

    I don't see this as likely.

If you teach your children to like computers and to know how to gamble then they'll always be interested in something and won't come to no real harm.

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