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by cbd1984 4110 days ago
Cable and fiber ISPs as they exist now, with the same company owning the wires and providing the service, are inevitably going to be natural monopolies, because of the massive start-up costs of entering the market combined with the trivial (near-zero) costs to the incumbent ISPs to add one more customer.

In that case, new companies have to lay new cables and provision new data centers and hire new people, whereas TWC only has to ship out a cable modem and allow access to pre-existing capacity.

One way around this would be to force TWC and Comcast and so on to divest themselves of the physical infrastructure up to their in-plant demarcation points, spin off new natural monopolies to only own the cables, and force those new companies to lease to all comers at the same low rate, with a managed X% profit spelled out in regulations. That way, an upstart would only have to provision new data centers and hire new people; that's still more than Comcast has to do, but it's a lot less than the current state of affairs.

This is related to Net Neutrality, in that the neutrality rules are more urgently needed as long as ISPs have unshakeable monopolies on a regional basis, but even if competition were more robust it would still make sense to ensure no ISP could become that predatory.

1 comments

But it's not a natural monopoly. I know because I have three high speed ISP options at home: cable, fiber and (decent) DSL.

Three providers would be unthinkable for a true natural monopoly, like roads or water.

> it's not a natural monopoly. I know because...

You're lucky. I only have Cable and (crappy) DSL. My cable is good, but the DSL is so awful that if my cable provider decided to triple their rates I would have no choice but to acquiesce and pay up. I think that's the very definition of a natural monopoly.

A very large number of Americans have no, or only one high speed internet provider - and that was by the 2010 standard of "high speed": http://broadbandnow.com/report/2013-underserved/

( Relevant YC discussion here: https://news.ycombinator.com/item?id=9044719 )

There is nothing that physically prevents you from building three separate water networks, it's just a stupid idea because it costs three times as much for the same result. And so it is with internet.
I know because I have three high speed ISP options at home: cable, fiber and (decent) DSL.

Where I live there is either cable (which exists because of cable TV) and terrible DSL (which exists because of phone lines). There has never been any attempt to wire the area only to provide internet service. And as far as I know, there is only one set of wires for cable TV. So, it sure appears to be a natural monopoly to me.