The Cable Industry Is Quietly Securing A Massive Monopoly Over American Broadband

from the nobody-is-paying-attention dept

Cable providers like Comcast and Charter continue to quietly secure a growing monopoly over American broadband. A new report by Leichtman Research notes that the nation’s biggest cable companies added a whopping 83% of all net broadband subscribers last quarter. All told, the nation’s top cable companies (predominately Charter Spectrum and Comcast) added 2.7 million broadband subscribers in 2017, while the nation’s telcos (AT&T, Verizon, CenturyLink, Frontier) saw a net loss of 625,000 subscribers last year, slightly worse than the 600,000 subscriber net loss they witness in 2016.

A pretty obvious pattern begins to emerge from Leichtman’s data, and it’s one of total and absolute cable industry dominance:

“The top broadband providers in the US added nearly 4.8 million net broadband subscribers over the past two years,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. “The top cable companies accounted for 130% of the net broadband additions in 2017, following 122% of the net adds in 2016.”

Oddly Leichtman can’t be bothered to explain why the cable industry has become so dominant: a total refusal by the nation’s phone companies to upgrade their networks at any real scale. Verizon years ago decided that residential broadband wasn’t profitable enough quickly enough, so it froze its FiOS fiber deployments to instead focus on flinging video advertisements at Millennials.

You’ll note from the chart above that the only telcos still adding subscribers are those that are actually tryiing to upgrade to fiber to the home (AT&T, Cincinnati Bell). Even then, while AT&T is upgrading some areas to fiber, actual availability remains spotty as the company largely focuses on developments and college campuses where costs are minimal. There’s still millions of customers in AT&T territories stuck on DSL straight out of 2003, and they won’t be getting upgraded anytime soon.

Other American telcos, like Frontier, Windstream and Centurylink, have effectively refused to upgrade aging DSL lines at any real scale, meaning they’re incapable of even offering the FCC’s base definition of broadband (25 Mbps down, 3 Mbps up) across huge swaths of America. Frontier in particular has been a bit of a shitshow if you’ve followed the often comic corruption and cronyism they’ve fostered in states like West Virginia. Other telcos (like CenturyLink) now don’t see residential broadband as worth their time, so they’ve shifted much of their focus to enterprise services or the acquisition of transit operators like Level 3.

The result is a massive gap between the broadband haves and the broadband have nots, especially in rural markets and second and third tier cities these companies no longer deem worthy of upgrading (they will, however, back awful protectionist state laws banning towns and cities from serving themselves, even when no incumbent ISP wants to).

This is all wonderful news for natural monopolies like Comcast, who now face less competitive pressure than ever. That means a reduced incentive to lower prices or shore up what’s widely considered some of the worst customer service in any industry in America. It also opens the door wider to their dream of inundating American consumers with arbitrary and unnecessary usage caps, which not only drive up the cost of broadband service, but make shifting to streaming cable alternatives more costly and cumbersome.

While many people like to argue that wireless (especially fifth generation, or 5G) will come in and save us all with an additional layer of competition, that ignores the fact that wireless backhaul services remain dominated by just a few monopolies as well, ensuring competition there too remains tepid and often theatrical in nature. And with many cable providers now striking bundling partnerships with wireless carriers, the incentive to actually compete with one another remains notably muted, as nobody in the sector wants an actual price war.

This of course is all occurring while the Trump administration attempts to gut most meaningful oversight of the uncompetitive broadband sector, meaning neither competition nor adult regulatory supervision will be forcing improvement any time soon. With the death of net neutrality and broadband privacy protections opening the door to even more anti-competitive behavior than we’ve grown accustomed to, what could possibly go wrong?

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Companies: charter, comcast

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Comments on “The Cable Industry Is Quietly Securing A Massive Monopoly Over American Broadband”

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Anonymous Coward says:

Though is this really happening quietly? Comcast is more than willing to advertise how they have the most on-demand programming with their cable package, the fastest home internet, and that you should also really sign up for their cell phone plan.

In fact, they’re being so un-quiet about it, they’re already advertising their next monopoly.

Anonymous Coward says:

Re: Re:

You would think this would be the case among the largest players, for sure. However, Mediacom has just released a huge special discount package for internet-only service, speed of 60Mbps, for $40/mo with no contract. Previously, they bundled basic cable and charged $83/mo (including fees and taxes). This obviously is planning ahead, but at least it’s lower prices and unbundling of tv/internet in the broadband market.

Anonymous Coward says:

Re: Quietly?

"This is the result of anti-free market pursuits by people driven by fear."
The monopoly is the result of anti-free market pursuits?
What exactly do you think happens in a free market? I’ll give you a very simple answer:
Anti-monopoly laws came about because in a free market companies were able to form monopolies and screw people over…
Stop attacking the people who work to solve the very problem you claim they’re creating, even though those people are a reaction to the problem.
Nowadays, the concept of "too big to fail," should it be allowed to stand, is the reason big companies can get away with whatever the fuck they want.

Anonymous Coward says:

The FCC was invented to produce artificial scarcity

The whole point of the 1934 FCC was to invent communications choke points where tolls could be levied and traffic could be surveiled.

A wonderful side-effect of the FCC is the steady flow of lobbyist cash to counteract any attempt to change this status quo.

Anonymous Coward says:

Re: The FCC was invented to produce artificial scarcity

That seems a bit previous, ain’t it?

I agree with the fact (there are indeed “choke points” and there are indeed non-“consumer friendly” actions and economical inefficiencies going on there).

But the specific couplings with the claimed cause and effect seems a bit off! The insanity is not caused as much by FCC as the telecommunication act of 1996. It is the first real questionable law that encompass the internet and particularly its title 3 has had very measurable and wide-ranging effects on the business environmmment and not in a way that helps consumers in any way! Also the universal service support has never truely been enforced (It is one of the primary laws ISPs call price-regulaton in their polls since it makes “above-service charges” illegal)!

I’d argue that the situation today is very much a result of how incredibly sloppy that law is formulated.

Anonymous Coward says:

wait a minute

but, but…antitrust laws!

SHHHHH! Do you hear that? It’s the sound of ISP/Telecom lobbyists paying off congressmen, congresswomen, & congresstrans.

The Fix
1.CONGRESSIONAL TERM LIMITS order to be elected for congress, that congres-person’s children must serve 1 year in the US Armed Forces

boycott or bend over

Anonymous Coward says:

Re: wait a minute

term limits are not the answer, and a term limit can be created by the mechanism of voting them out. I think term limits are just red herrings where people can further disrupt government. A politician that knows they cannot get re-elected is more likely to be more brazenly against the citizens than one that still has to extract their votes.

Anti-Trust laws are failing because their failure leads people to ask government to take more power. What government in its right mind would ever enforce anti-trust laws if not enforcing them leads down the path of greater regulatory power?

Wendy Cockcroft (user link) says:

Re: Re: wait a minute

  1. show me a place where anarchy, by which I mean “voluntaryism” actually works at scale. I’ll be waiting for a while, won’t I?

    2. “Boycott or bend over” only works when you’ve got enough other people on board and alternatives to the thing you’re boycotting, otherwise you’re just going without and nothing changes. Besides, attempting to actually organise a boycott requires a level of collective action that would quickly result in horrible reprisals including reputation-wrecking via accusations of terrorism or communism, etc. Remember the “Freedom Rides” and bus boycotts of the 1960s? Expect a similar response.

    3. Anti-trust laws are failing because they’re not being enforced. They’re not being enforced because the public isn’t bothered to inform itself or to hold its representatives to account. A well-organised campaign would solve this problem but expect push-back from incumbents.

    Do you really, truly think “the market” can sort this mess out? Seriously? Asking for a friend.

JoeCool (profile) says:

Not much choice

Where I live, I have two choices: DSL where I would pay $30 a month (plus added fees and taxes and modem rental) for (up to) 20 Mbps (if I’m really lucky); or Charter Cable and pay $50 a month (free modem, but will go up to $80 a month after a year, and their salesmen keep bugging me to buy TV service or streaming) for 200 Mbps. I went with cable.

any moose cow word says:

Re: Re:

The biggest problem is what we’re pretending local cable monopolies are not monopolies. Services based on physical infrastructure tend toward monopolies, either because each competitor has to lay their own prohibitively expensive infrastructure or it’s physically impossible to do so. We’ve already figured out that electric, gas, water, and old fashioned telephone were “natural” monopolies and regulate them as such. Cable effectively is a monopoly and behaves as one, yet regulators let it pretend that it’s not. We need to drop the pretense of “competition”, many telecos without wide fiber infrastructure are slowly dropping the out of that market, and start regulating them like the monopolies they are.

ECA (profile) says:

Years ago..far far away..

Its interesting that BEFORE cable/sat almost ALLLLLLL of the TV stations were broadcast only and mostly regional..
Didnt matter who they were, most of the MAIN stations were local..from TNT to CBS..
Cable came up and allot of fighting started..
Who paid, what, Who paid who, Who was going to BUY WHO..
25-50 channels and all of them were individual..
We got to see things from every part of the USA..

NOW 2/3 of the stations are designed to GOTO CABLE/SAT, with no local distribution..
But the OLD system is still there.(for REASONS) If you know how Cable sends out to the areas, its easy…SAT distribution mainly.(they are looking at the net also, NOW).

We do have a problem, in that the TV stations USED to have control, but the cable corps NOW have the ability to SHUT DOWN 90% of all of the TV stations in 1 click…and all the money they make, would be GONE./.(I think they are learning that)(which means they can TELL the TV stations how much they will pay or even CHARGE them to broadcast their channels)
The end result, could be Good/bad/ugly..and everyone paying for Cable/sat..and its JUST TO MUCH..

Fun time at the zoo..

Anonymous Coward says:

Re: Re:

The internet isn’t a one nation system. It’s a network of networks that spans the entire globe, crossing multiple national, geographic, and cultural lines. Nationalizing something like that is not only dumb, but robs it of it’s purpose: to enable comunnication between people, and spread information. The only thing that would result from nationalizing the internet is an isolated system whose content and rules change with each administration. It would be practically useless both as a communications medium and as a means of spreading information at that point.

The existing internet is already free. These people, who despreatly demand repeals of real net neutrality and installation of mandatory filtering, are trying as hard as they can to enslave the internet for their purposes.

any moose cow word says:

Re: Re: Re:

I think Kevin means nationalize the consumer connected part of the network infrastructure that resides in the US, aka ISPs. Many countries with functional broadband either have government run networks or government regulated monopolies, with higher speeds and lower cost than the US. Others with “competition” or unregulated monopolies are about as slow and/or overpriced as the US.

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