Wednesday, May 21, 2014

Americans hold their nose to the smell of private monopolies

Once again, we see that the most hated companies in America are the ISPs and the cable companies. Familiar names like Comcast, Time-Warner and AT&T have hit new lows. Surprisingly, the cell phone companies are doing better than the ISPs and subscription TV companies are doing.

I'd venture to guess that the reason for this is competition or the lack thereof. The cell phone industry has much more competition than the subscription TV or ISP business. Cell phone companies don't get exclusive territories like cable TV or the land line phone companies do.

If you have competition, you have to be nicer to your customers. Cable TV companies like Comcast are also internet service providers, but they don't have any competition in the areas they serve. Each city grants an exclusive franchise to the cable company that serves them. In return, the cities get a nice stream of cash they can use for operating expenses. This kind of relationship is much too close for comfort.

Worse, since the incumbent providers have no real competition other than the phone company also serving in the area, profits are fat. See, Comcast has no other cable companies to compete with in the area they serve due to the franchise they receive from the city. Same with the phone company, like Centurylink. Yes, the phone companies get franchises, too.

So they compete against each other. Or do they? I have Comcast so that I can have a 50mbs connection to the internet. Centurylink? They're still trying to find their butt in this neighborhood with an offering of only 5mbs. It's like Centurylink conceded this territory to Comcast on very friendly terms.

The cell phone service providers don't have the luxury of a franchise. They have to fight tooth and nail to get customers and keep them. So they have to be nice to their customers. That explains the higher customer satisfaction ratings for the cell phone companies.

But if you want to change the scene with the incumbent internet service providers, you might consider being an activist for community broadband. Or you can ask the FCC to reclassify the ISPs as Title II Common Carriers.

Either of those two would help to humble the incumbent ISPs in your neighborhood.
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