Competitive Broadband Markets

Consumers always benefit from having several providers. Cable TV and Local Phone franchises never made sense to me: hopefully we will see technical breakthroughs to challenge those monopolies as well.

"A broadband market can be considered competitive when there are at least four providers: prices differ very little between a market with four providers and one with more than four. Prices are not likely to fall in markets with less than four ISPs because incumbent firms are going to make it difficult for new providers to enter and offer broadband services at better terms. Moreover, we should expect a more competitive broadband market in richer and more densely populated areas. The composition of the population also matters, with areas with more Asians or singles attracting more ISPs.
Sattelite TV has technical problems to overcome, although some local Bells are trying to roll out TV services:

"The problem at the heart of DIRECTV's model is that it can't yet offer the two-way technologies that are so hot now -- from Voice over Internet Protocol to VOD. Satellite's one-way feed can send shows to TVs, but there's no path back to the satellite, making its pay-per-view offerings much less popular since they start at scheduled times. Plus, cable is a more attractive platform for ads because it can target spots to specific neighborhoods. "Last year satellite had all the advantages. Now cable has attacked them on just about every one," says Craig E. Moffett, an analyst at Sanford C. Bernstein & Co.

Looming but still a bit distant are threats from phone giants Verizon Communications Inc. () and SBC Communications Inc. (), which are gearing up to offer programming services. With its first trial under way in Keller, Tex., Verizon is offering a full menu of TV channels, part of a bundle with its own high-speed Internet services."