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June 28, 2005

Why Cable Broadband Monopolies are Good

The Brand X Supreme Court decision-- the decision upholding the FCC's decision to give cable monopoly control of their broadband lines -- is a bit of a discussion stepchild in the shadow of the other big decisions, but I've been a long-time proponent of giving both cable and the Baby Bells the right to exclude competing ISPs from using their lines, so I'm happy with the result.

A lot of the consumer groups think this is a terrible thing, but, really, once you have access to the whole Internet, why do you need competition on exactly how you get there? If the cable companies try to gouge you on price or otherwise misbehave, I prefer straightup regulation.

And the costs of allowing other ISPs to cherry-pick the best customers are high. As I argued years ago, if companies can potentially lose their best customers, they may not deploy the technology in the first place, especially in poorer areas.

The idea that "competition" would deliver the magic of high-speed Internet was always a bit of a sham. What is needed are strong regulations to prevent discrimination on content; as long as any provider of broadband can't block use of any particular Internet service, the focus should be on encouraging those providers to extend service to everyone, not worrying about "competition" for those who already have the service.

Posted by Nathan at June 28, 2005 09:00 AM