What Broadband Competition?

Last week, when I posted my opinion on the shrinking broadband choices, many disagreed, especially on David Faber’s Interesting People mailing list. Reuters says the two industries control 97% of the total 30 million U.S. broadband connections. Cable companies hold roughly 60 percent, but Bells are slowly squeezing them. Here is how they are doing it in Michigan.

According to Wall Street estimates, the average monthly cost of an entry-level voice, video and data package from a Baby Bell is about $115 per month, compared with about $130 for similar packages from cable companies, albeit with faster data speeds. Those prices have remained steady even as more cable companies enter the phone market.

My argument about FCC being beholden to special interest groups, and being out of touch with reality also hold. In the Reuters’ story, here is what FCC Commissioner Kathleen Abernathy said.

Broadband access is such a nascent market, and there’s so many technologies available for delivering it to consumers that a large percentage of the country will have more than two choices of how they would get it.

I don’t know about you but 30 million does not seem to be a nascent market, and rest of the technologies have 3 percent of the total market. Not big by any means. So FCC, stop worrying about boob-y-traps and focus on this most important stuff. For once earn your keep. Detroit News reports that SBC customers in Michigan are lining up for its DSL service now being offered for $26.95 a month. That’s significantly less than most DSL or cable broadband connections. “By doing so, the customers are effectively signing a one-year contract to keep their local phone service with SBC, the company’s competitors argue,” Detroit News adds. SBC knows all it has to do is keep these customers around for a year or two at the maximum, and then sell them fiber connections at a premium. The cable guys are going to be squeezed out the market? And if that is not enough SBC is offering DSL+Satellite TV for $57 a month. I just wonder how Comcast competes with that.


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