Comcast, Charter Dominate US; Telcos 'Abandoned Rural America,' Report Says (arstechnica.com)

An anonymous reader quotes a report from Ars Technica: Comcast is the only choice for 30 million Americans when it comes to broadband speeds of at least 25Mbps downstream and 3Mbps upstream, the report says. Charter Communications is the only choice for 38 million Americans. Combined, Comcast and Charter offer service in the majority of the U.S., with almost no overlap. Yet many Americans are even worse off, living in areas where DSL is the best option. AT&T, Verizon, and other telcos still provide only sub-broadband speeds over copper wires throughout huge parts of their territories. The telcos have mostly avoided upgrading their copper networks to fiber -- except in areas where they face competition from cable companies. These details are in "Profiles of Monopoly: Big Cable and Telecom," a report by the Institute for Local Self-Reliance (ILSR). The full report should be available at this link today. "The broadband market is broken," the report's conclusion states. "Comcast and Charter maintain a monopoly over 68 million people. Some 48 million households (about 122 million people) subscribe to these cable companies, whereas the four largest telecom companies combined have far fewer subscribers -- only 31.6 million households (about 80.3 million people). The large telecom companies have largely abandoned rural America -- their DSL networks overwhelmingly do not support broadband speeds -- despite years of federal subsidies and many state grant programs."

Comments

Broadband is Broken

[Archangel Michael]

Broadband is broken, we have known this for YEARS.

The problem is that we have GOVERNMENT regulation preventing competition (Franchise Agreements) and until we figure out a way to get out of them, and allow for more competition over the last mile, we're going to be stuck with ever increasing government rules and regulations trying to fix the problem of government's own making.

My solution, is fairly simple, yet radical. The Local Municipality owns and operates the LAST mile itself (like a road), then the problem will remain. There are ways to bring competition to the marketplace, allowing consumers to choose who their provider, rather than the one size fits all approach government tends to bring.

There are two ways this will play out:

[DewDude]

The Trump administration will say this report is fake news and claim, fasely, that America has the best broadband.

Touch-Once-Make-Ready will get put in to place at a national level and we soon find "the big boys" interfering with local competition by "damaging" lines.

Either way we're screwed.

Government in action

[Solandri]

There is no free market. These are government-granted monopolies. The local governments select a single cable and single phone company to service their area, and prohibit other companies from offering services.

This is actually a perfect example of government regulation run amok.

• In the previous city I lived in, the city negotiated kickbacks from Verizon, who would pay them a certain amount each month for every home which subscribed to FIOS service. Basically a tax on its citizens, but collected by Verizon. In exchange, Verizon got a monopoly.
• In the city I lived in before that, the city awarded the cable monopoly on the condition that the cable company install infrastructure to provide service to a certain percentage of homes in a low-income area. It was well-intended, but it screwed over the rest of us, consigning us to higher prices for worse service. A year before I moved, some council members with sense were elected and they voted to allow a second cable company to offer service. The day before the second cable company was set to provide service, the existing cable company gave free 50% internet speed boosts to all their plans, and cut $10/mo off the price across the board.

Re:Government in action

[Anonymous Coward]

The combination of a monopoly and high barriers to entry, including the regulatory ones, generally result in expensive and poor quality service for consumers. Not all regulation is good regulation, as you correctly noted. Regulating a monopoly with a public service commission or equivalent entity is generally not the best way to impose regulations. Removal of all regulations generally isn't a good idea, either. Instead, it's probably best in those situations to have strong antitrust laws and enforcement to make the market as competitive as possible. It's also a good idea to lower the barriers to entry as much as possible, including removing unnecessary regulatory barriers. If the barriers to entry are low, it's much harder for a monopolist to abuse their position. When the barriers to entry are high, which they are for utilities, it's much easier to get monopolies that are harmful to consumers.

Well

[DaMattster]

This is not surprising considering these guys lobby the government to consider broadband deployments acceptable at 50% of a large swath of an area. Really, the entire system is broken, not just the telecom industry but the way we do business altogether in America.

Re:Free market in action

[rickb928]

This is the root of the 'problem' - local governments negotiate exclusive agreements for various physical plants; cable cos get pole space which they usually actually have to rent from some entity, be it the ILEC, power utility, or the government. Telcos (ILECs usually, though CLECs are not different in this) either owned the pole space and so have the physical plant via incumbency and so offer DSL, or rented from the 'owner' and have virtually perpetual agreements, given that POTS was once critical, and now telephone is just a must-carry issue...

If the local government won't permit competitive cable TV-style franchises, this will not change soon. Wireless solutions are inadequate, even 5G will not really work in urban areas, though 600MHz could revolutionize rural delivery. Ethernet/MPLS-type delivery would work, but pole rentals are the problem, and that is the equivalent of competitive Cable TV-style delivery, with the competitive issue still in play.

New York seems to actually intend to kick out Charter Spectrum, for failing to deliver. This is actually NY invalidating the TWC/Bright House mergers, essentially making Charter unwind these and go away. No good can come of this, but perhaps it goes to appeal, and then NY says the era of exclusive agreements is over, and competitors come in to fight for share.

I truly doubt this is fixable in my lifetime. Geography and population cause problems in the US that just don't exist in Europe and Asia, where density solves the cost equation so much easily. Britain has a very different governmental structure, good and bad, and other nations for better or worse are just not the US. Several wireless technologies were promised, none delivered. But we hope and hope. And pay and pay.

Re:For once, free market fails

[rickb928]

I agree. If municipalities etc had the 'permission' to build ISPs as utilities, this would change the market immediately. Google Fiber was really just a threat that caused real changes in some markets. It just didn't turn out to be manageable for Google.

Tesla, with it's direct sales model, is making a mess of many states' car sales laws. It is time for this idea, municipal networks, to make a mess of the ISP market.

then we can watch as municipalities consider if they want to carry all content- even pr0n, dissenting political opinion, and such stuff that is distasteful to someone. It shouldn't be a problem, since cable cos carry all sort of stuff many would question, but it's possible...

Re:Free market in action

[TheReaperD]

Satellite is not a viable replacement for many high-speed internet needs. You can't use it for any sizeable Netflix/Hulu usage due to bandwidth limits and online gaming... forget it.

Re:Free market in action

[BronsCon]

It's not a monopoly. has been illegal to do this for years.

It's been illegal for properties to do this. That is, apartments, condos, and HOAs. City and county governments on the other hand...

Unfair to say they've abandoned rural America

[rsilvergun]

should any of those rural counties wish to create their own broadband services Comcast will be happy to send in lawyers to point out that there are state laws explicitly prohibiting municipal broadband services in there area. I mean, "abandoned" implies they'd be left alone...

Re:These problems are *caused* by the government

[Anonymous Coward]

The problem is they grant this monopoly in exchange for the ISP promising to give broadband to rural communities. The ISPs promise, they get their monopoly in the lucrative cities, then drag their heels and do as little as possible to support the rural parts of the state. The state doesn't take them to task for this, and believes their promises of 'some day soon'. Or perhaps they don't believe the ISP, but believe they have no way to break the monopoly.

Re:Free market in action

[youngone]

3 ISP's? Really?
New York is one of the most densely populated cities in the world, with a population of ~ 8.6 million and that's the best you can do?
That's a totally broken system, and the fact you think a choice of 3 in New York is good is a bit odd.
As far as making their investment back, TFA explains

despite years of federal subsidies and many state grant programs.

They're being paid to supply rural Internet, and they still won't do it.

Re: Free market in action

[Anonymous Coward]

...government regulated by telco captured agencies, AKA regulatory capture. The telcos love and lobby for regulations which prevent competition. And that's free market capitalism in action.