Cable's Broadband Monopoly Continues To Protect It From TV Cord Cutting
from the do-not-pass-go,-do-not-collect-$200 dept
One of the nice things about being a telecom giant in a country with limited competition, feckless politicians and hog-tied regulators is there isn’t much in the way of accountability. As a major broadband provider like Charter or Comcast, you’re allowed to monopolize the telecom market, jack up prices, elbow out competitors, then lobby state and federal government to ensure nobody does anything about it. Hell, thanks to a timid press that can’t call a spade a spade, half the time nobody can even be bothered to point out that you’re a monopoly in the first place.
In US telecom, regional monopolies like Charter and Comcast continue to dominate market share as residential telcos effectively retreat from network expansion in any areas that aren’t profitable enough, quickly enough for Wall Street’s liking. Unfortunately for them, they still have to deal with rising competition on the video end of their businesses.
But as the pay TV sector gets more competitive thanks to streaming, these telecom monopolies can simply extract their pound of flesh from captive broadband customers. Charter Communications, (which operates under the brand name Spectrum), lost another 156,000 residential pay TV subscribers in the first quarter, a notable uptick from the 70,000 pay TV subscribers lost during the same quarter a year ago. The reasons aren’t mysterious: users are fleeing endless price hikes and some of the worst customer service in America for the cheaper, more flexible, more consumer friendly TV offerings of streaming operators.
Cable companies’ broadband customers would be doing the same thing but they can’t because there are no other options to flee to. This is then interpreted by cable executives as something caused by their own innate business genius:
“We continue to execute well in a market environment that has not yet returned to normal. We added 355,000 Internet customers in the first quarter, and 2 million over the last year, for year-over-year growth of 7.3 percent.”He added: “Our value-driven operating strategy of providing multiple high-quality products at lower prices than sold individually continues to drive our growth.”
Of course as we’ve long noted, broadband monopolization does give telecom giants like AT&T, Charter, or Comcast competitive leverage in the streaming space. They impose arbitrary and confusing usage caps and bandwidth overage fees (which are utterly unnecessary for any technical reason), then exempt their own content from those caps while still penalizing competitors like Netflix. That makes it cheaper for a consumer to use a telecom giant’s streaming services, but results in all manner of added fees for consumers should they dare wander outside the gatekeeper complex.
Unlike AT&T and Comcast (which have both done this for years) Charter’s technically forbidden from imposing caps right now thanks to conditions affixed to its merger with Time Warner Cable. But those conditions expire soon. And while some new state laws ban such behavior, the federal government during the Trump administration thought lobotomizing itself at monopolies’ behest made better sense than doing absolutely anything about anticompetitive problems like this, or the myriad of other problems created by mindless sector consolidation and regional broadband monopolization.