3 Cable TV Companies Might Own 75% to 80% of the U.S. "Broadband" Market

The entire premise behind regulating the few large former monopoly telecom providers differently from everybody else in the same markets is that they continue to wield near-monopoly power in the market.

Most observers would agree that, in most local markets, a cable TV provider and a telco dominate triple-play markets, even if there is significant share held by third parties in some instances.

The policy issue is whether it makes sense to continue and operate as though one of those contestants (large telcos) is so fundamentally powerful, compared to cable TV, that such suppliers must be regulated more severely than all the other contestants.

To be sure, there has been some leveling of regulatory framework. Net neutrality rules apply equally to cable TV, telco, mobile and other ISPs.

But some observers would challenge the notion that the framework still makes sense. Some providers have market power, to be sure. But that is true in every established market.

And fixed network markets arguably are past prime, and clearly shrinking, in any case. Voice and linear video are shrinking markets, while high speed access, clearly the strategic service, now is dominated by cable TV providers.

Assuming pending mergers are approved just  three companies--all cable TV operators-- would have what some would call “an effective broadband monopoly” across the vast majority of the United States, using the FCC’s definition of broadband as a minimum of 25 Mbps.  

Comcast, Charter and Altice would control 75 percent to 80 percent or more of 25 Mbps-plus subscribers.  

While that should slowly drop as AT&T and Google Fiber add new markets, it will be a slow process.

Third-party ISPs also will enter the high speed access market, but total market share for such providers is expected to be quite low, on a national basis.

Where it comes to determining what happens to the market, it will continue to be the case that what the top half dozen companies do affects most potential customers.

The mobile segment, which in the past might have been considered separately from the fixed network business, is going to change as well. Much as the long distance market used to be separate from the local access business, the mobile segment will cease, in any serious way, to be a separate market .

Most of the long distance business essentially was absorbed by AT&T and Verizon Communications. A smaller portion was retained by Sprint, but that business has dwindled to near-insignificance.

Eventually, the “independent” portion of the mobile business, represented primarily by T-Mobile US and Sprint, seem destined to be acquired by other providers, likely cable TV interests. There remains some possibility that app or device suppliers eventually could enter the market, but it seems unlikely they would do so by acquiring either T-Mobile US or Sprint, outright.