May 2021 – Net Policy News

Killer study: Two broadband providers results like a monopoly. $100B infra spend endangered

Scott Wallsten, who was Chief Economist of the US Broadband Plan, has just published Does Competition Between Cable and Fiber Increase Adoption? His conclusion:

the data shows [a second carrier] won’t bring down prices on the low-income end given that that’s the place we would get new adoption. … broadband adoption, all else equal, is not higher in tracts with cable and fiber providers than it is in tracts with only a cable provider or only a fiber provider.
Wallsten

Comcast demonstrated how low prices can increase demand. The obvious explanation why adoption didn’t go up is two carrier markets have pretty much the same prices as pure monopolies. US cableco charge the same prices whether or not they have to compete with fiber.

For the last 15 years, I’ve watched cablecos and telcos raise prices in lockstep, generally at 3-5% per year. Ajit Pai became FCC Chair with a promise to bring down prices but instead saw an increase of 10%-20%, depending on what you measure,.His advocates answer back that prices had also gone up under his Democratic predecessor, Tom Wheeler.

Ask Senator Markey: How to fix the infrastructure spending

Ed Markey is a champion for consumers and Internet users. He’s one of only three candidates I’ve endorsed in the last few years. He’s doing a live session with The Verge Wednesday May 12 I hope to attend.

The fog of misinformation in DC is overwhelming and likely to bring enormous waste in infrastructure spending. Those who understand broadband in DC see the logic of not spending more than$10-20 billion in the next four years or so. Biden and most of Markey’s allies haven’t realized that yet. Asking the right questions is a good way to get people – even Senators – to look more closely. My questions, below, in italics.

$10-20 billion could be spent in a way that brings fast connections to those who don’t have them available. Bringing down the prices for the poor is obviously necessary. Comcast has connected over a million with low prices.

But the evidence is that overbuilding cable with fiber does not lower prices; that 100+ Mbps cable upstream will reach 85% of the US quickly because the upgrade is ~$200; and that the US is building just about all the fiber the industry can already in the next 2-3 years and will need at least that long to mobilize for a large increase in funding. The broadband experts are putting this together but the politicians need education

Building towers in new areas the smartest infrastructure subsidy

Joe Biden and Kamala Harris are about to spend tens of billions unnecessarily building duplicate networks. The wireless industry is demanding subsidies for areas that almost certainly will be covered by 5G without government money. Essentially every cell tower with backhaul will be upgraded with a 5G radio.

But there are very few towers being built in areas not already covered. A 25-75% subsidy would make many profitable. It’s the only broadband spending unlikely to duplicate things.

Mark – Verizon CTO Dick Lynch in 2009 building LTE decided to put a radio on any tower with backhaul that wasn’t overpriced. The result was the side by side maps showing Verizon coverage much better than AT&T, which had to scramble to catch up.