Comcast, Time Warner Cable, and other cable TV providers in the United States are running a monopoly. At least that’s the assessment made by Susan Crawford, a communications policy expert and a professor at the Cardozo School of Law.
Crawford appeared this week on NPR where she spoke with Diane Rehm. During her interview, Crawford noted that “a handful of cable companies have become monopolies that stifle competition and innovation,” which is a major reason “why Americans pay more money for worse Internet service than consumers in most other developed nations.”
Crawford then went on to compare the cable company structure to that of the 19th century railroad and steel monopolies, which faced minimal competition and an extremely high cost of entry. Crawford notes:
“If you’ve got a commodity that everybody needs as an input into their businesses, like take railroads for example, and it costs a lot to initially build that network so it’s hard for someone else to enter, and you can cooperate with your colleagues who are also providing that service, and you can divide up markets, you’ve got a monopoly business. We’ve seen this happen with wired Internet access in the United States.”
The law professor further explains that the monopolies for each company are worse in some cities than others:
“If you’re in Boston, San Francisco, Chicago, Philadelphia, really your only choice for wired high-speed Internet access at home is Comcast. If you move into an apartment in Seoul [South Korea], you have a choice of three different providers, they show up in a day because there’s so much competition, and they charge you $30 for TV and everything. Koreans when they come to the United States… actually laugh at us for how expensive and how slow [American Internet service] is.”
For more information on the cable company monopoly structure, I recommend checking out Crawford’s new book Captive Audience.