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Cable’s US Broadband Monopoly Continues To Grow

We’ve noted a few times how US regulators often simply refuse to acknowledge that the US broadband sector is heavily monopolized. Regional cable and phone monopolies are the number one reason US broadband is patchy, expensive, and slow with routinely terrible customer service. But when you see folks in both parties discuss US broadband, industry dysfunction is always framed in this extremely nebulous way (we must “fix the digital divide!”). Largely because nobody in government wants to offend deep-pocketed campaign contributors also bone grafted to our domestic surveillance apparatus.

The latest broadband data from Leichtman Research illustrates the scope of the problem. The firm notes that the broadband industry added 890,000 subscribers last quarter. Cable companies added 840,000 of that total, while phone companies added just 50,000:

“The top cable companies added about 840,000 subscribers in 2Q 2021 – 60% of the net additions for the top cable companies in 2Q 2020. The top wireline phone companies added about 50,000 total broadband subscribers in 2Q 2021 – compared to a net loss of about 140,000 subscribers in 2Q 2020.”

Phone companies (Windstream, AT&T, Verizon, Frontier, Centurylink) have effectively given up on residential broadband across much of the country. In many areas that means not just refusing to upgrade aging DSL lines, but often refusing to repair them. That’s effectively creating a bigger broadband monopoly than ever for entrenched cable giants (usually Charter (Spectrum) and Comcast), which now dominate roughly 70 percent of the fixed line broadband market. No competition means no incentive to expand, compete on price, or shore up terrible customer service.

People like to pretend that stuff like satellite broadband and wireless will come in and disrupt this busted paradigm, but that’s simply not true. Satellite broadband ventures like Elon Musk’s Starlink lack the capacity to truly break this logjam at any real scale. And while 5G is also bandied about as a miracle solution to the problem, US wireless isn’t a real substitute for for traditional fiber, usually comes with bizarre restrictions and caveats, and is generally expensive (something that will likely get worse thanks to recent industry consolidation).

The way you fix US broadband dysfunction is by targeting the regional fixed-line monopolies enjoyed by AT&T, Verizon, Comcast, and Charter. One way to do that is to drive most subsidies toward smaller private competitors. Another way to do that would be to embrace and support the growing tide of community broadband efforts growing up around the country, whether they be municipal broadband, cooperatives, public/private partnerships, or utility-based.

But because AT&T, Comcast and friends are so politically powerful, efforts to do that usually get largely stripped away from any new broadband bills, as we just witnessed with the Biden broadband plan (in fact, community broadband support was the very first casualty). Often these compromises, at the direct behest of monopoly lobbyists, are then framed as “bipartisan compromise.” But because the proposals aren’t tackling the real reasons for US broadband dysfunction (regional monopolization and the state and federal corruption that protects it), nothing truly changes.

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