Government Report: No High Speed Broadband Competition [telecom]

[Bill Horne]

Government Report: No High Speed Broadband Competition: Blame AT&T,
Verizon & CenturyLink's Two Decades of Broken Promises.

by Bruce Kushnick

In the last article about broadband I supplied a list of the "video
dialtone" deployments that were filed at the FCC by what are now AT&T,
Verizon and Centurylink to upgrade the utility copper networks and
replace these wires with fiber optics wires -- which never happened.
...

We estimate that by 2014, America paid about $400 billion extra in
higher phone costs and tax perks to the companies, and based on more
recent uncoverings of the phone companies' financials, this number is
low.

http://www.huffingtonpost.com/bruce-kushnick/government-report-no-high_b_6385798.html
-or-
http://goo.gl/1VkyW4

--
Bill Horne
(Remove QRM from my email address to write to me directly.)

[Neal McLain]

On Sunday, December 28, 2014 10:32:33 AM UTC-6, Bill Horne wrote:

> Government Report: No High Speed Broadband Competition:
> Blame AT&T, Verizon & CenturyLink's Two Decades of Broken
> Promises.

The cited report states seven conclusions, one of which is:

> This has allowed the cable companies to have a monopoly
> for broadband and cable service in most of the country,
> or even in the markets where there are two providers, a
> duopoly. All of this means no competition to lower
> prices.

Once again I ask my long-standing question: Does building two wireline
networks really promote lower retail prices?

In my experience it costs a lot of money to build a wireline network.
Overbuilding an existing wireline network would cost *at least as much* -- and
probably more than the cost of building the first network. In a previous
(2004) T-D post I wrote an extensive post addressing this issue:

"Re: Verizon Cable TV?" 5 posts by 4 authors. 8/22/04.
https://groups.google.com/d/msg/comp.dcom.telecom/H4fIsd8EY38/gpIFUQ60RtIJ
-or-
http://tinyurl.com/pzsjjeb

In this report I cited three reasons to justify my argument:

1. Simple economics.
2. Buried-cable construction costs.
3. Franchise requirements.

But even if the cost of the second network were the same as the first network,
it should be obvious that the total capital investment to build two networks
would be double the investment to build one network.

Yet the number of potential subscribers would remain the same, so each
company's potential subscriber base would be reduced. If, for example, each
company got 50% of the subscribers, its total revenue would be only half of
the total. In short, each company's ROI would be cut in half.

I simply don't understand how this situation would result in lower retail
prices.

Neal McLain