from the Do-not-pass-go,-do-not-collect-$200 dept
The U.S. telecom industry’s monopolization problem shows no sign of slowing down.
According to the latest data from Leichtman Research, the cable industry is nearing a 70% market share over fixed line broadband. That’s thanks to many reasons, not least of which being that most U.S. phone companies have effectively given up on seriously upgrading their aging DSL lines, driving a greater portion of Americans to the only companies actually offering modern broadband speeds: Charter (Spectrum) and Comcast. Phone companies collectively lost another 150,000 subscribers last quarter, while cable providers added about 1,400,000 users in just three months.
For the cable industry, this is all a wonderful thing. Less competition from phone companies, combined with a Trump FCC that couldn’t care less about the sector’s competition problems, means they can get away with charging higher rates than ever for a service that comes (not coincidentally) with some of the worst customer service ratings of any industry in America (seriously stop and think about that for a moment).
With COVID-19 making it clear that broadband is an essential utility, users are flocking to cable connections if they want to remain tethered to their jobs, education, and friends. Charter (Spectrum), as a result, saw 850,000 new customers in one quarter alone, a quarterly record for any broadband provider, at any point in U.S. history:
“With the continued impact of the coronavirus pandemic, there were more quarterly net broadband additions in 2Q 2020 than in any quarter in eight years,? said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. ?In the first half of 2020, there were over 2.4 million net broadband additions. This is the most net adds in the first half of any year since 2008.”
That’s great news for cable giants, but not so great for consumers, smaller competitors, or the health of the internet.
Less competition overall means not only higher flat-rate prices, but more annoying fees, usage caps, and overage surcharges. It also means less incentive than ever to behave on subjects like net neutrality or privacy, improve customer service, or expand service into lower ROI areas (despite billions in tax breaks, subsidies, and regulatory favors). What exactly exists to curtail these companies’ worst impulses or motivate them to do better? They face no competition, and U.S. regulators and lawmakers are potentially the most captured they’ve been at any point in the last 50 years.
There’s a small glimmer of hope that low-orbit satellite ventures (from the likes of Space X and Amazon) and fifth-generation wireless (5G) could help shake things up, but the former lacks the capacity to seriously disrupt denser markets, and the latter still is far from being a direct competitor to fixed-line broadband due to high prices and nickel-and-dime connection restrictions. Meanwhile one of the more disruptive aspects of U.S. telecom, community-owned or public/private partnerships, have been under steady assault by the Trump FCC.
U.S. monopolization is not a bug, it’s a feature. There is no panacea here, and nothing changes without both a dramatic shake up in American leadership, and major reform to rein in AT&T, Comcast, and Verizon’s political influence over both state and federal lawmakers and regulators.