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They behave this way because the restricted nature of the physical plant of last mile access makes them a duopoly. In some of those areas of centurylink and com

They behave this way because the restricted nature of the physical plant of last mile access makes them a duopoly. In some of those areas of centurylink and comcast, neither one wanted to flinch first and be the first to spend many millions replacing their copper plant with fiber. Since they were both equally aware that the consumers in the area had available service options from only two companies, and exactly what the prices/packages/speeds of those services were... In some cases where the copper phone lines are degraded or a long loop length, it's worse than a duopoly. It's a monopoly since the service options might be 5 Mbps down x 768 kbps on ADSL2+, or 200-300 down and 15 Mbps up on comcast or charter DOCSIS3.

nine_k 6y ago
So, do you posit that there's just not enough money in the business for a third company to come over, lay fiber, and own the market?
- walrus01 6y ago
  That can be the case depending on what the population density looks like and how much of the infrastructure has to be aerial vs. underground. Doing a fully independent overbuild for GPON FTTH to individual houses can have a cost per house of $4000, which results in unacceptably long ROIs for fully private investment. Private investors who fund startup ISPs will go elsewhere. It can also be complicated and costly as a new-entrant 3rd provider to force the local entities controlling the wood utility poles to permit you to install infrastructure through entire neighborhoods and cities.
  - lotsofpulp 6y ago
    $4k amortized over a few years is very reasonable for a utility every house will buy. The problem is that Comcast already exists and will undercut you with an very inferior product, but the general populace is not educated enough to differentiate fiber vs coax, so Comcast will drop their prices to whatever they have to do the fiber won’t get purchased.
    - walrus01 6y ago
      Which bring us back to why it works for a PUD or municipality, which has the wherewithal to amortize things like that over 20 years from funding on municipal bonds, and can compel every homeowner in an area to pay for it.
- VintageCool 6y ago
  The existing duopoly have deep pockets and could protect their duopoly by also laying fiber anywhere that a third company tried to start up. The new entrant would not be able to maintain a profitable competitive advantage in any market. Comcast has upgraded its service in the cities where Google Fiber has been rolled out.

nine_k 6y ago

So, do you posit that there's just not enough money in the business for a third company to come over, lay fiber, and own the market?

walrus01 6y ago
That can be the case depending on what the population density looks like and how much of the infrastructure has to be aerial vs. underground. Doing a fully independent overbuild for GPON FTTH to individual houses can have a cost per house of $4000, which results in unacceptably long ROIs for fully private investment. Private investors who fund startup ISPs will go elsewhere. It can also be complicated and costly as a new-entrant 3rd provider to force the local entities controlling the wood utility poles to permit you to install infrastructure through entire neighborhoods and cities.
- lotsofpulp 6y ago
  $4k amortized over a few years is very reasonable for a utility every house will buy. The problem is that Comcast already exists and will undercut you with an very inferior product, but the general populace is not educated enough to differentiate fiber vs coax, so Comcast will drop their prices to whatever they have to do the fiber won’t get purchased.
  - walrus01 6y ago
    Which bring us back to why it works for a PUD or municipality, which has the wherewithal to amortize things like that over 20 years from funding on municipal bonds, and can compel every homeowner in an area to pay for it.
VintageCool 6y ago
The existing duopoly have deep pockets and could protect their duopoly by also laying fiber anywhere that a third company tried to start up. The new entrant would not be able to maintain a profitable competitive advantage in any market. Comcast has upgraded its service in the cities where Google Fiber has been rolled out.