What Cable Monopoly?

[Commentary] What a difference a few years makes! As late as 2009 Susan Crawford was arguing that cable broadband was becoming obsolete and Harvard’s Berkman Center believed the only long-term answer to increasing broadband demand was fiber. Today, Crawford is warning of a looming cable monopoly. To be sure, DOCSIS 3.0 technology has given cable a relatively low-cost upgrade path while traditional telcos generally have to invest far more in fiber to achieve similar performance. So, what is really happening in the market? Data on fixed broadband subscriptions contradict the claims of monopoly. The data show that cable has always held the majority of connections, peaking around 2003 when it held close to 60 percent of the fixed broadband market. The share of cable connections is trending upwards, but, at least as of last year, did not appear to be significantly different from the past.

None of this evidence means that Crawford’s warnings are necessarily wrong, of course. Whether cable’s cost advantage will ultimately translate into a monopoly or any increased market power, however, will depend not just on technological differences but also on changes in demand.

Policymakers should, without a doubt, keep a close eye on market conditions and work to ensure an environment conducive to competition. But if this fast-changing market teaches us anything, it’s that we should think twice before we conclude we know the endgame.