Cable's US Broadband Monopoly Continues To Grow

from the do-not-pass-go,-do-not-collect-$200 dept

We’ve noted a few times how US regulators often simply refuse to acknowledge that the US broadband sector is heavily monopolized. Regional cable and phone monopolies are the number one reason US broadband is patchy, expensive, and slow with routinely terrible customer service. But when you see folks in both parties discuss US broadband, industry dysfunction is always framed in this extremely nebulous way (we must “fix the digital divide!”). Largely because nobody in government wants to offend deep-pocketed campaign contributors also bone grafted to our domestic surveillance apparatus.

The latest broadband data from Leichtman Research illustrates the scope of the problem. The firm notes that the broadband industry added 890,000 subscribers last quarter. Cable companies added 840,000 of that total, while phone companies added just 50,000:

“The top cable companies added about 840,000 subscribers in 2Q 2021 ? 60% of the net additions for the top cable companies in 2Q 2020. The top wireline phone companies added about 50,000 total broadband subscribers in 2Q 2021 ? compared to a net loss of about 140,000 subscribers in 2Q 2020.”

Phone companies (Windstream, AT&T, Verizon, Frontier, Centurylink) have effectively given up on residential broadband across much of the country. In many areas that means not just refusing to upgrade aging DSL lines, but often refusing to repair them. That’s effectively creating a bigger broadband monopoly than ever for entrenched cable giants (usually Charter (Spectrum) and Comcast), which now dominate roughly 70 percent of the fixed line broadband market. No competition means no incentive to expand, compete on price, or shore up terrible customer service.

People like to pretend that stuff like satellite broadband and wireless will come in and disrupt this busted paradigm, but that’s simply not true. Satellite broadband ventures like Elon Musk’s Starlink lack the capacity to truly break this logjam at any real scale. And while 5G is also bandied about as a miracle solution to the problem, US wireless isn’t a real substitute for for traditional fiber, usually comes with bizarre restrictions and caveats, and is generally expensive (something that will likely get worse thanks to recent industry consolidation).

The way you fix US broadband dysfunction is by targeting the regional fixed-line monopolies enjoyed by AT&T, Verizon, Comcast, and Charter. One way to do that is to drive most subsidies toward smaller private competitors. Another way to do that would be to embrace and support the growing tide of community broadband efforts growing up around the country, whether they be municipal broadband, cooperatives, public/private partnerships, or utility-based.

But because AT&T, Comcast and friends are so politically powerful, efforts to do that usually get largely stripped away from any new broadband bills, as we just witnessed with the Biden broadband plan (in fact, community broadband support was the very first casualty). Often these compromises, at the direct behest of monopoly lobbyists, are then framed as “bipartisan compromise.” But because the proposals aren’t tackling the real reasons for US broadband dysfunction (regional monopolization and the state and federal corruption that protects it), nothing truly changes.

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Comments on “Cable's US Broadband Monopoly Continues To Grow”

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19 Comments
James Burkhardt (profile) says:

Re: Re: Where's the outrage?

Bold assumption to assume I haven’t just been on the loosing side of the vote.

No candidate is close to 100% on my views. And once the primary (where I vote for the candidate which best supports my veiws) is over (generally with my candidate losing), its rarely who do I support. In my entire voting life (with the first post 9/11 presidential election being my first), the important concern with my representatives is who will do less damage to our representative democracy, not who is best on broadband policy. This has been a non-partisan endevor, though democrat candidates have won that math more than they have lost it.

Worse, while those concerns have tended to dove tail, ‘best’ on broadband policy is still super bad.

Anonymous Coward says:

Re: Re:

Why do Americans think in terms of competition to solve natural monopoly problems, while most of the rest of the world have implemented effective regulation?

Even "the rest of the world" uses competition as an important part of the solution to natural monopolies. Eg., the UK and Canada require the wire providers to let independent ISPs use the wires, at regulated rates, whereas the retail service rates are not regulated (although there are some rules relating to net neutrality etc.).

Anonymous Coward says:

Re: Re: Re:

Well yes but, providing the pipes is the natural monopoly, wile managing routers etc is much less so, especially if the exchanges are shared. Also, connecting properties to the exchanges is the expensive part of the monopoly, with extra capacity built in during install and upgrade. That said, full duplication of the network, including spare capacity is expensive, with one provider drifting into bankruptcy or network abandonment when a competitor get the majority of the business, because the duplicate infrastructure has no value to the competitor. Cable and mobile phones are destroying the US fixed line phone market, leading to abandonment of the infrastructure.

Without regulation of the Infrastructure, the US broadband problems will continue, and a forced breakup does not create real competition, and over time the monopoly will rebuild its self. Broadband in the US is one merger away from becoming a single monopoly with a few minnows at the edges.

ECA (profile) says:

Hmm, how to defeat this.

Lets be a large corp and not want to do anything.
So we create smaller companies that go into those area and build it up abit.
Sounds allot like Cellphone services and the farm industry.
Everytime the gov gives out grants to the smaller companies it ends up at the top corp. But the corp isnt paying the small Company to do much. Maybe upgrade those Phone and cable lines that have been installed on Electric poles for 40+ years. They improve things over time, over and over, while getting grants to Do the job all in 1 shot, Not incrementally.

Lostinlodos (profile) says:

Community concerns

One thing I’ve seen crop up locally a few times is the replacement idea. And it sucks.
Municipal internet should have to compete with, not replace, services already there.

There’s the other side of the issue here. The general method of paying for the system is via taxes.
I like my provider (Xfinity), most of the time.
So think about many of the local plans.

Replace current cable systems by leasing or buying out the equipment in place. (Lines). Offering the same product at a lower price. Via tax funding.

Or competition:
Run new lines through the community. Give it to to every resident as a base for free paid via taxes.
Now people who like their current provider have to pay taxes to support a service they won’t use.
Then:
What’s to stop a local government from simply legislating out commercial internet. Cutting off those that are happy.

There needs to be preplanning before any such move.

John Gardner says:

Socialist policies destroy competition

You know why small businesses can’t jump in and build out a telecom service in areas where the big monopolies refuse to upgrade/fix aging service lines? Because of socialist policies that a lot people seem to love especially in blue states. Raising taxes, increasing red tape and regulations etc. The big telecoms couldn’t care less about upgrading their lines because they know socialist policies have obliterated their small-time competition from EVER actually being able to compete. The Big Telecoms love your idea of "community based networks" because that’s basically the final nail in the coffin for any small-time telecom dreams of making it big.

I swear socialists destroy everything they touch.

Talmyr says:

Re: Socialist policies destroy competition

Every word you said there was either wrong or a lie.

"I’ll put my head into the sand to ignore the real issues – argh, the ‘socialist sand’ is suffocating me!"

Regulation is not socialist, and these monopolies are propped up by big capitalist companies paying off politicians to stifle the small companies. Why else would they pay to pass laws blocking competition?

If your fact-free rant about politics you don’t understand had the slightest merit, then red states would be internet nirvanas of competition, and plentiful small companies. Newsflash: they aren’t. Whereas in "socialist" Europe and Canada we have healthy competition, much better coverage, and pay a lot less, all without massive subsidies.

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