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Expert Opinion: Broadband Adventures in Wunderland: The (Expensive) Myth of Competition

The National Broadband Plan won’t do jack until more folks in Wunderland acknowledge and aggressively address one stark truth – broadband competition is mostly a myth, expensively maintained through lobbyists, think tanks and easily-influenced politicians. Until we get meaningful competition, a significant part – though mercifully not all – of Wunderland’s policies will result in dabbling around the edges rather than a meaningful advancement of broadband in the U.S.

Case in point: the misguided attempt by some of Wisconsin’s state legislators to prevent their state universities from using federal stimulus money to advance broadband is purely about AT&T clawing to maintain its near monopolistic hold over broadband there. In this and other states’ legislatures we see cable and telco duopolies roadblocking federal and local efforts to get communities the broadband they want and need.



The National Broadband Plan won’t do jack until more folks in Wunderland acknowledge and aggressively address one stark truth – broadband competition is mostly a myth, expensively maintained through lobbyists, think tanks and easily-influenced politicians. Until we get meaningful competition, a significant part – though mercifully not all – of Wunderland’s policies will result in dabbling around the edges rather than a meaningful advancement of broadband in the U.S.

Case in point: the misguided attempt by some of Wisconsin’s state legislators to prevent their state universities from using federal stimulus money to advance broadband is purely about AT&T clawing to maintain its near monopolistic hold over broadband there. In this and other states’ legislatures we see cable and telco duopolies roadblocking federal and local efforts to get communities the broadband they want and need.

Counterproductive legislation is just one element of the fallout from a lack of competition. High prices, low network service quality, abysmal customer service and just plain lack of access plagues many rural and urban communities. Furthermore, policymakers’ dreams of a future in which broadband enriches the U.S. economically or otherwise are on shaky ground without the pressure of real competition to force/entice buildouts of networks capable of delivering on those dreams.

Incumbents and their apologists are loud and swift proclaiming the industry, particularly mobile broadband, is “vibrant” in its competitiveness. They shout, “we’re a veritable font of innovation!” (accompanied by loud chest thumping). They repeat that mantra “almost every America has dozens of providers from which to choose,” I guess – assuming we easily confuse quantity with quality.

Let’s look at the reality of broadband competition. You have to tear away two curtains hiding the man at the PR controls.

First, just because there are a lot of providers in a state doesn’t mean you have competition that leads to better broadband for a better price. Last year I partnered with data analytics firm ID Insight to release an analysis of competition within all 50 states based on data from millions of Internet users nationwide. We ranked the states based on how closely the market share of their respective top 10 competitors came to 10 percent for each competitor. The viability of competition depends on more than market share, of course, but we took this approach to give the discussion of competition some context and consistency.

Even in the 10 states where the competitors are most evenly matched in market share, as you go down the list the combined market shares of the top three competitors moves into the high 70s. In Michigan and Iowa, states that ranked 21 and 22 on the list, the combined market share percentages of the top three competitors break solidly into the 80s.

In state 24, Wyoming, and on down the list we have what are pretty much duopoly states. The top two competitors’ market share percentages collectively are in the mid 70s moving toward the 80’s (often one’s a wireless and one’s a cable provider, and it’s questionable they really compete with each other that much). For the bottom five states (Delaware, Colorado, Maryland, Hawaii and Rhode Island), their duopolies range from 89 percent to 95 percent market share.

If you practice the fine art of rational thinking, you’ll be hard pressed to believe that 60 or 70 providers in a state means you have anything resembling “robust” competition if 50 or 60 of them are fighting for 15 percent of the market. Drill down to the county level and often you don’t even see three or four of the top ten providers. Sometimes two, occasionally just one, at which point their market share is even greater.

It’s at this local level you find frequent stories such as this from Sibley County, Minn. For more than two-and-a-half years, these communities pleaded with providers to partner with them, offering incentives that included most of the network’s sales revenues. They offered to put up the money to build the network. Yet the best broadband these towns currently receive is DSL service at 256 kilobits per second (Kbps) downstream and 128 Kbps upstream. However, let one competitor pop up on the scene offering fiber services, these incumbents fall all over themselves with special offers and high speeds. We see it happen time and again.

Here’s where you yank away the other curtain around the competition myth. To do so, you need to get into the market and the mind of the people who actually pay for and use what passes for broadband services in their area. Wunderland is fixated with broadband adoption, but many folks miss the boat completely when it comes to broadband utilization. Utilization means using broadband to perform tasks and run applications important to economic development, education, job skills improvement, delivering better medical services, etc. It matters little if you adopt a broadband service that’s inadequate for the utilization needs at hand.

In numerous areas competition is low or effectively nonexistent when you look at how few Internet access providers have any meaningful clout within those areas. But when you look at the more important question of, can a community get broadband that’s sufficient to do the tasks deemed important for its economic enrichment, you see the true lack of competitive forces. Slip out from under the debilitating influence of industry lobbyists with their fairy tales of robust competition and spend some days visiting communities and listening to their stories.

Over 130 communities, such as Chattanooga, Tenn., own their own broadband networks, plus communities that have formed co-ops and nonprofit entities to run their networks. Look at the collective benefits Chattanooga’s gigabit community network offers its constituents (part 2 of the story here). You see that achieving communities’ various economic dreams requires a lot of broadband capacity, but competition to provide this kind of capacity is nonexistent in so many parts of the U.S. That’s why several thousand communities (not hundreds, thousands) are champing at the bit to be like Chattanooga, Powell, Wyo., Ontario County, N.Y., Santa Monica, Calif. and the others. They want to provide the competition that addresses utilization, not just adoption.

More people in Wunderland have to grab this bull by the horns, or some other vital area, and kick it in the butt. People need to take a two-by-four and beat back these attempts to undermine and circumvent programs that fund broadband efforts that introduce much needed competition. Let’s see some profiles in courage and toss this AT&T/T-Mobile merger out the back door. Encourage (incentivize) companies like Google and Corning to partner with communities to put fiber infrastructure in place. If you’re going to do more than just pretend to reform USF, take that $4 billion that comes directly out of taxpayers’ pockets and put it into communities to solicit and fund the best solutions they can find someone willing to provide.

Either we get serious about competition or we stop pretending we’re serious about broadband.

Craig Settles is a broadband business strategist, marketing expert, author and internationally renowned speaker.  Craig helps organizations use broadband technologies to improve government and stakeholders’ operating efficiency, as well as local economic development.





Craig Settles conducts needs analyses with community stakeholders who want broadband networks to improve economic development, healthcare, education and local government. He hosts the radio talk show Gigabit Nation, and is Director of Communities United for Broadband, a national grass roots effort to assist communities launching their networks. He recently created a guide to help librarians uncover patrons’ healthcare needs, create community health milestones and effectively market telehealth.

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Broadband's Impact

Mississippi Nonprofit is Looking to Fill Gaps in Affordable Connectivity

The nonprofit Connect and Literacy Fund is planning to increase ACP adoption in Mississippi.



Screenshot of the event on Wednesday.

WASHINGTON, September 28, 2023 – A Mississippi nonprofit is setting up a fund to support connectivity and digital literacy in the state.

The Mississippi Broadband Association is looking to raise $10 million to start the fund, which MSBA Executive Director Quinn Jordan said is intended to ensure newly built broadband infrastructure stays affordable in the state.

“We can build these networks,” he said, speaking at a Fiber Broadband Association webinar on Wednesday, “But if we don’t get people connected, if they don’t have the literacy or capability to do so, what have we really done?”

The initiative, called the Connect and Literacy Fund, is planning to increase ACP adoption in Mississippi. Over 18 percent of the state lives below the poverty line, making them eligible for the $30 monthly internet discount, but less than half that number participate. The MSBA is planning to make ACP sign-up part of the registration process to participate in the fund’s programming.

That programming will focus on teaching people how to use internet services like telehealth and streaming and provide large discounts for tables and PCs. The ACP provides a $100 device subsidy, but this is rarely enough for low-income households to make a purchase, Jordan said.

Difficulty accessing affordable devices is contributing to the digital divide in Mississippi, according to Jordan. He pointed to the fact that over 40% of Mississippians do not have access to a tablet or computer.

“That is a huge number. And it’s a barrier to entry,” Jordan said. “The Connect and Literacy Fund is hopefully going to address that.”

Jordan said the $2.75 billion Digital Equity program, part of the Biden Administration’s Infrastructure, Investment and Jobs Act, will be beneficial, but MSBA’s Connect and Literacy Fund will have a role to play in ensuring the state builds on the gains it makes with the federal funds.

“That money is going to run out,” he said. “What we’re doing is ongoing.”

The ACP might also be short-lived. The $14 billion allocation from the Infrastructure Act is set to dry up in April of next year.

MSBA has spent the last two months developing its programing and is looking to start coordinating events with local anchor institutions in the coming months, Jordan said. 

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Broadband's Impact

Tech Trade Group Report Argues for USF Funding from Broadband Companies

Consulting firm Brattle Group said in a report the move would be economically sound.



Screenshot of Chip Pickering, INCOMPAS CEO

WASHINGTON, September 19, 2023 – Tech company trade group INCOMPAS and consulting firm Brattle Group released on Tuesday a report arguing for adding broadband providers as contributors to the Universal Service Fund.

The USF spends roughly $8 billion each year to support four programs that provide internet subsidies to low-income households, health care providers, schools, and libraries. The money comes from a tax on voice service providers, causing lawmakers to look for alternative sources of funding as more Americans switch from phone lines to broadband services.

The Federal Communications Commission administers the fund through the Universal Service Administration Company, but has left it to Congress to make changes to the contribution pool.

The report argues that broadband providers should be one of those sources. It cites the fact that USF funds are largely used for broadband rather than voice services and that broadband adoption is increasing as phone line use decreases.

“The USF contribution base needs to change to account for the fact that connectivity implies not just voice telephone services, but predominantly broadband internet access,” the report says.

It also rebuts arguments for adding tech companies like INCOMPAS members Google and Amazon to the contribution pool, saying they represent a less stable source of income for the program and that added fees for services like streaming could affect . 

The report is the latest salvo in an ongoing dispute between tech companies and broadband providers over who should support the USF in the future, with broadband companies arguing big tech should be tapped for funding as they run businesses on the networks supported by the fund.

Sens. Ben Lujan, D-N.M., and John Thune, R-S.D. established in May a senate working group to explore potential reforms to the program. The group heard comments in August  from associations of tech and broadband companies, each outlining arguments for including the other industry in the USF contribution base.

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Broadband's Impact

Florida Broadband Grants, Support for Microsoft-Activision, IQ Fiber Investment

Comcast, Conexon, and Cox received $247 million in Florida broadband grants.



Photo of fiber-optic installation from 2018 by CTA

September 18, 2023 – Service providers Comcast, Conexon, and Cox are receiving the biggest awards totaling $247 million in Broadband Grants in the state of Florida, Telecompetitor revealed Thursday.

Cox is receiving $80 million for 11 projects, Comcast is getting $60 million for 34 projects, and Conexon is receiving roughly $40 million. Additional companies receiving funding include, Charter Communications, AT&T, CenturyLink, Suwanee Valley Electric Cooperative, Consolidated, TDS, IBT, and Myakka, Telecompetitor noted. 

The state announced the $247 million in broadband grants this July, but did not include the names of the providers who would be providing the services.

The grants were made possible through Florida’s Broadband Infrastructure Program, which received funding through the Treasury’s Capital Projects Fund. 

Nine Amicus briefs filed in support of Microsoft’s purchase of Activision Blizzard 

Nine amicus briefs were filed Thursday in support of Microsoft’s $68.7 billion purchase of Activision-Blizzard by a group of parties that included the U.S. Chamber of Commerce and Communications Workers of America among others.

The briefs come in response to the Federal Trade Commission’s attempt to appeal its loss against Microsoft to prevent the sale in the United States, alleging that Microsoft’s acquisition of Activision-Blizzard would allow it to manipulate access to Activision’s products for rival gaming consoles to Microsoft’s Xbox, therefore suppressing competition in the gaming industry.

“This Commission’s hostility to the procompetitive and efficiency-enhancing prospects of mergers is well-known—but the Commission’s position is not supported by merger case law,” said Bilal Sayyed, TechFreedom senior competition counsel, former director of the FTC’s Office of Policy Planning. 

Among the briefs released, five independent publishers and studios that included Curve Digital, Finji, iam8bit, Strange Scaffold, and Studio Wildcard – going under “amici”’ in support of the acquisition – hint the deal will positively benefit the development community.

“Amici are five independent companies, of all shapes and sizes, that publish or develop video games for a range of game-streaming platforms, including Microsoft’s Xbox Game Pass service on Xbox,” the brief stated. “Thus having first-hand experience with Microsoft’s Game Pass subscription and its effects on the market for independently published and developed games.

“While the FTC argues that the merger will stifle competition, amici have had precisely the opposite experience with Microsoft’s Game Pass service.”

In June 2022, the CWA was able to enforce a Labor Neutrality Agreement with Microsoft if the acquisition were approved. Under the agreement, workers with Activision Blizzard would be able “to freely make a choice about union representation.”

“While the labor neutrality agreement at Activision does not take effect until the merger closes, Microsoft has already proven its commitment to abide by the agreement by extending its provisions to its own employees,” CWA wrote on their website.

IQ Fiber starts construction of fiber-optic network in northwest Gainesville, $40 million invested in phase one of project

IQ Fiber has started its first phase of construction Friday, a $40-million investment to bring a fiber-optic network to the Northwest Gainesville and Alachua County in Florida.

The company, based in Jacksonville, is bringing its services to Florida’s Alachua, Duval, Clay, Nassau and St. Johns counties, which is its “first major network expansion outside of the Jacksonville region.”

IQ Fiber expects online service to be available for “a few” Northwest Gainesville neighborhoods near the start of 2024. 

Gainesville Mayor Harvey Ward said in a press release that extending broadband competition in the community was always a priority and is hopeful that IQ Fiber’s presence will provide a plethora of opportunities for the neighboring communities.

Since starting in 2021, the company has developed over 600 miles of fiber-optic cable across North Florida. 

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