Thursday, May 18, 2017

Comcast and Charter -- declining competition among ISPs

I am not an expert on the retail ISP industry -- just a dissatisfied customer of the monopoly service provider in my neighborhood -- but the following events have caught my attention during recent years.

In 2012, Comcast and Verizon agreed to stay out of each other's markets -- Comcast would focus on landline Internet and Verizon mobile Internet.

Last year, Charter Communications merged with two other companies to become the second largest ISP in the country.

This month, Comcast and Charter Communication have agreed to cooperate on mobile connectivity, to "explore potential opportunities for operational cooperation" -- "creating common operating platforms, technical standards development, and harmonization, device forward and reverse logistics, and emerging wireless technology platforms."

They also agreed not to make a major acquisition in the wireless sector without the other’s involvement for one year.

They will both resell Verizon wireless service.

President Obama & the Comcast CEO
(source)
A visual inspection of the coverage maps of Charter and Comcast does not reveal a lot of geographic overlap in their current service areas. (I'd be curious to see the actual statistics).

Many of us had only one or two choices for a landline ISP during the Obama administration and mobile connectivity remained a stable oligopoly. It does not sound like Charter and Comcast will be fierce mobile connectivity competitors, does it?

Capitalism needs competition to work well and a lack of competition offers a partial explanation for the US, home of the ARPANet, being ranked 15th on the International Telecommunication Union ICT Development Index. It certainly does not look like we can expect more ISP competition during the Trump administration.