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FCC Can Define Markets With Only One ISP as 'Competitive', Court Rules (arstechnica.com)
An appeals court has upheld a Federal Communications Commission ruling that broadband markets can be competitive even when there is only one Internet provider. From a report: The FCC "rationally chose which evidence to believe among conflicting evidence," the court ruling said. The FCC voted last year to eliminate price caps imposed on some business broadband providers such as AT&T and Verizon. The FCC decision eliminated caps in any given county if 50 percent of potential customers "are within a half mile of a location served by a competitive provider." This is known as the "competitive market test." Because of this, broadband-using businesses might not benefit from price controls even if they have just one choice of ISP.
The FCC assume that:
1) if there's a competitive ISP serving someone half a mile from you, then that ISP would be willing to extend their network to cover you. That's probably not the case, but it's what the FCC decided to (pretend to?) believe. Therefore, the FCC can claim that you have a choice of changing to that other provider
2) The fact that people have an alternative provider and could switch to it, means that the ISPs in that area have to keep the price down.
3) ISPs are going to set prices for everyone in the county to be the same, so if *most* of the county has an alternative provider and could switch to it, then that keeps prices down for everyone in the county.
Of course, every point I just listed is wrong, but that's what the FCC decided to (pretend to?) believe. This happens to be good news for the existing ISPs, which can raise their prices in every case where the FCC's assumptions are wrong.
50 percent of potential customers "are within a half mile of a location served by a competitive provider."
WTF? Has the government been proceeding with their ears plugged for the past decade?
The whole issue is The last mile problem
A competing provider is not going to travel Half a Mile to try and grab another provider's customers ---- buildout is so extremely expensive that typically there is a tacit agreement between so-called "competitors" that they will stay away from other providers' turf.
Just TRY and get a cable company to service you whose nearest line is 1/2 a mile away.
Extending service by 1/2 mile of thickline is something like $30,000+ in a suburban/rural area, and potentially half a million or more in build costs to run the additional cable in an urban area ---- thus they aren't inclined to build, especially when the consequence is violating a de-facto unwritten informal but anti-competitive agreement b/w neighboring providers that risks causing revenue loss from losing other customers.
These areas have only one ISP because local governments awarded a monopoly, and prohibit competition
People aren't blaming government because this claim is false.
Local governments awarded monopolies for cable TV. Those monopolies were time-limited. They've all expired. And if you took a moment to think about it, you'd notice a cable TV monopoly is not an Internet service monopoly.
So no, this is not the ebil big govment. This is the result of the natural monopoly you get in any utility - the company that has already paid to run lines to every house has a massive competitive advantage over the companies that have not run those lines yet. And they're able to use that advantage to crush any competitor that tries to enter the market.
A free market does not prevent this from happening, and actually acts to maintain this situation. Which is why we need the ebil big govment to prevent exploiting the natural monopoly so that competitors can actually enter these markets so that they can become functional markets.