by on April 3, 2008 · 16 comments

I have said that the threat of regulation is a credible deterrent to prevent unreasonable discrimination by broadband service providers and we don’t need a new regulatory framework with the unintended consequences which always flow from regulation.

And James Gattuso, noting that Comcast and BitTorrent were already working with one another on a solution to their network problems “long before this story broke,” correctly chided me for overlooking how public opinion is also a credible deterrent. James is right, particularly when there is a competitive market. And like it or not, the broadband market is competitive.

A “duopoly,” you say?

Allow me to quote Cornell Professor Alfred E. Kahn (formerly chairman of the New York Public Service Commission, chairman of the Civil Aeronautics Board under President Jimmy Carter and a father of airline deregulation) from testimony before the Federal Trade Commission last year:

There is no consensus among economists about the likely sufficiency of competition under duopoly—in the present instance, between landline telephone and cable companies in the offer of broadband access to the Internet—although evidence of active competition between the two, such as is actually occurring, might provide sufficient basis for deregulation, particularly in light of the aforementioned rapidity of technological change. By the same token, the presence of an actively competing wireless provider or providers—would, in the mind of most, justify—indeed demand—de- or non-regulation. Wireless voice service is one of the great success stories in telecommunications over the last few decades. I understand that the prospects for wireless data in the near future are excellent. Any analysis of future competition in Internet access must consider the possibility—or likelihood—that the cable and telephone duopoly will be joined by three or four wireless suppliers in the near future.

Of course, wireless broadband is a likelihood. It’s even a certainty. Check out the latest broadband competition report from the Federal Communications Commission: There are actually more mobile wireless high-speed lines (defined as more than 200 kbps in at least one direction) than cable modem or DSL lines (35 million mobile wireless versus 34 million cable modem and 27 million DSL lines).

I realize mobile wireless broadband access isn’t yet identical in terms of price and speed. But we all know it’s heading in that direction. The point is, if landline telephone and cable companies who offer of broadband access to the Internet abuse their market dominance they will merely accelerate the growth of mobile wireless broadband services. The correct measure of competition isn’t what we have today but what we will or could have tomorrow.

Call it what you will: The threat of regulation, public opinion, enlightened self-interest or simply the desire to be a good corporate citizen – Despite the absence of regulation Comcast is working with BitTorrent and is also now rolling out DOCSIS 3.0 beginning in the Minneapolis and St. Paul region – providing up to 50 mbps downloads and 5 mbps uploads; Comcast expects to deliver even faster speeds of up to 100 mbps to its customers over the next two years with the capability of delivering higher speeds of 160 mbps or more in the future.

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