Monopoly ISPs are a Fallacy?

Although I usually agree with him, one of my favorite bloggers, Dave Winer, recently said this:

One of the ideas circulating is that your ISP has a monopoly, owns the only way for you to get to the Internet, but that’s an old idea, it’s no longer true. Where I live the wireless vendors are just as fast as the wired ISP. The cost is still prohibitive, I still need wifi, but given an economic incentive to replace Comcast and Spectrum et al, some wireless vendor is going to step in, probably the smaller ones who aren’t yet owned by one of the big ISPs. Google could buy Sprint for example, and provide a route-around.

I wish I had the same competitive landscape that Dave enjoys. I wish this were true for the rest of the country. But the FCC’s own report from June 2016 (see page 8) shows that 58% of the country’s census blocks have 0 or 1 provider of 25/3 Mbps internet service. This seems a lot like a monopoly.

Let me tell you about the facts on the ground in my town of 1700 people in rural New Hampshire. My conversations with others in the region indicate these conditions hold in huge numbers of communities throughout much of New Hampshire, Vermont, and Maine.

  • The best internet service in town is from Fairpoint. It’s possible to get DSL service to any home, but it’s still just DSL (and often very slow): they’re the only game in town.
  • There is a wireless ISP, but the hilly terrain means their service is OK (10/1 Mbps) if you can get it, but only selected areas can be served.
  • What about cable? Comcast finagled their claim to serve the entire zip code by providing service to one cluster of homes on the southern town border. They refuse to provide cable/internet service to the town center, let alone any place a mile away from there.
  • And cell service? There’s only one bar in the center of town. You can’t make a phone call, so you sure couldn’t use the cell service for data.

So our incumbent ISP (Fairpoint) has a de facto monopoly position, with no alternatives in sight.

I wish that we could rely on the entrepreneurial impetus to sweep away bad, monopolistic ISPs. But we can’t – at least not in any reasonable time frame. The incumbents have rigged the system. NH law (instituted at the behest of the incumbent providers) prevents towns and cities from bonding to create their own municipal networks.

Back to the initial point: The FCC is making rules that seem to assume that we can “just switch carriers” if we don’t like their offering. Yet they fail to provide evidence that any such competitive service exists.

I say, leave the Net Neutrality rules alone until there’s a far better competitive landscape that would allow me to shop around for an ISP that provides options I might care for.

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