The CBN team's Associate Director for Communications Sean Gonsalves recently published a piece in ProMarket about the continuing consolidation of telecommunication markets and why municipal broadband is a better option. He writes:
"Last month, AT&T announced it would acquire all of Lumen Technologies’ fiber internet business for $5.75 billion. According to a company statement, the purchase will net AT&T one million fiber customers and significantly expand its fiber footprint in Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake City, and Seattle.
Across AT&T and Lumen’s service areas, where they offer wired or licensed fixed wireless Internet service, more than half of the locations they claim to serve have two or fewer options for high-speed internet service.
Good news for AT&T stockholders. Not so good news for broadband-hungry subscribers who, for years now, have been paying among the highest prices for internet service of any developed nation in the world. Ever wonder why that is? The answer is as painfully obvious as our overpriced monthly internet bills.
When big telecom giants consolidate—especially in a market where most people have only one or maybe two internet service providers (ISPs) to choose from—the results are predictable: without meaningful competition for something as fundamental as internet connectivity in an internet-connected world, monopolists have no incentive to improve service, invest in network upgrades, or compete on price.
If you are one of the 80 million or so Americans who live in an area with only one ISP, the monopoly provider has you over a barrel where your choice is: pay us whatever we charge, no matter how unreliable the service may be, or good luck participating in the digital economy without us.
Such is the case in LA County, where a 2022 report from the California Community Foundation found that Charter Spectrum was the only ISP for the majority of addresses in the study, and that price disparities existed with high-poverty neighborhoods charged more for slower internet speeds, while wealthier neighborhoods received better pricing for high-speed internet...
The data shows that these mergers are neither necessary for expansion nor beneficial to consumers. The illusion of efficiencies, however, will continue to persuade judges and regulators that they should be approved..."
"But if efficiencies will continue to provide the trump card when adjudicating mergers, because efficiencies in theory produce lower costs and higher quality services for citizens, then we ought to pursue the market choices that empirically maximize efficiencies, and that is the public choice."
Read the rest of the article here.
