Image
Fast, affordable Internet access for all.
In Broadband Networks, Private Ownership Leads to Consolidation
By
on
In all the talk of the need for competition in broadband (or in the mobile space), there is remarkably little attention paid to the difficulties in actually creating competition. A common refrain from the self-interested industry titans (and their many paid flacks) is: "keep the government out of it and let the market decide."
Unfortunately, an unregulated market in telecom tends toward consolidation at best, monopolization at worse. Practicioners of Chicago economics may dispute this, but their theories occur in reality about as frequently as unicorn observations. In our regulatory environment, big incumbents have nearly all the advantages, allowing them to use their advantages of scale to maintain market power (most notably the ability to use cross-subsidization from non-competitive markets to maintain predatory pricing wherever they face even the threat of competition).
The de-regulatory approach of telecom policy over the past 10 or more years has resulted in far less competition among ISPs, something Earthlink hopes to change with a condition of the seeming inevitable NBC-Comcast merger. Requiring incumbents to share their lines with independent ISPs is one policy that would greatly increase competition - but the FCC has refused to even entertain the notion because big companies like AT&T and Comcast are too intimidating for the current Administration to confront.
In the Midwest, Windstream is cutting 146 jobs as part of its acquisition of Iowa Telecom. When these companies consolidate, they can cut jobs to lower their costs... but do subscribers ever see the savings? Not hardly. The result is less competition, which leads to higher prices. Consider that Comcast is the largest cable company, but they are known better for their poor record of customer service than low prices enabled by economies of scale.
We need broadband networks that are structurally accountable to the community, not private shareholders located far outside the community. The solution is not more private companies owning broadband infrastructure, but more private companies offering competing services over next-generation infrastructure that is community owned by coops, non-profits, or local governments.
Photo by therichbrooks on Flickr - used under Creative Commons license.
Related Stories
Longmont’s NextLight Wins Top Spot In PC Magazine’s Readers’ Choice Award
Longmont, Colorado’s NextLight community fiber network isn’t just delivering fast and affordable fiber access to locals, it’s consistently winning awards nationwide. The city-owned network has topped PC Magazine’s Readers’ Choice rankings, which asked readers to rate their satisfaction with their residential broadband providers.
South Carolina’s Innovative Broadband Maps Verifies ISPs Internet Speeds
South Carolina’s innovative state broadband map can accurately identify areas of over-reporting by Internet service providers (ISPs). The South Carolina State Broadband Office now performs audits on the ISPs to ensure they are submitting accurate data. The office partnered with broadband data collection company Ookla and integrated speed test data directly into the mapping system
CA Broadband Activists Aim For Big Wins On Mapping, Cable Franchise Reform
Thanks to a coalition of local digital equity advocates inroads are being made on fixing long-broken California cable franchise law as Digital Equity LA celebrates a major victory in pressuring the California Public Utilities Commission to produce more accurate maps that will be used to determine where the state's broadband funds should be targeted. These efforts come as California is putting its $7 billion broadband expansion plan into place with an eye on boosting competition and driving down consumer costs.
After Years of Talk, Cambridge, MA is Now Taking Serious Look at Municipal Broadband
With a new supportive city manager in office, Cambridge city leaders have agreed to continue to investigate the options laid out in a recently published feasibility study. The study found that for Cambridge to construct a financially sustainable citywide fiber network “a significant public contribution would be required” of between $150 and $200 million.
Quincy, MA Moves Full Speed Ahead On City Owned Open Access Fiber Plan
Quincy, Massachusetts is moving full speed ahead on a long-percolating plan to bring faster and more reliable broadband to a community long neglected by regional telecom monopolies. If successful, the resulting open access fiber network should dramatically boost competitive options in the city, driving down costs for what many view as an essential utility.
Colorado Repeal Of Community Broadband Ban A Turning Point Decades In The Making
Colorado state leaders have voted to eliminate long-criticized state barriers to municipal broadband networks. Community broadband advocates hope it will be a beacon for other states eager to bring more reliable and affordable high-speed Internet service to a market long dominated by monopoly providers. The new Colorado law, made after years of citizen backlash to the counterproductive restrictions, is the latest inflection point in a retreat away from monopoly-backed state laws stifling creative efforts to bridge the digital divide.