They are political monopolies, not geographic. Congress created a telephony and cable video regulatory regime based on monopolies to subsidize the buildout of those technologies. Congress has only halfheartedly moved away from this system because cable and telecom are the largest political donor groups. Some states have made progress moving to more competitive models but for the most part the system is a rats nest of federal, state, and local regulations designed to block competition.
This is an area where the cynical conventional wisdom just doesn't hold up to actual facts. Congress made it illegal for localities to grant monopolies back in 1992. Many municipalities are trying to get more competition, not block it. But they insist on imposing public interest obligations that make it unfeasible to build competing systems.
> “We’ve, in fact, asked other cable operators if they’re interested in coming into the city and, so far, nobody else is,” says Minda Goldberg, a chief solicitor in the city’s Law Department.
> She was explaining things to Councilwoman Mary Pat Clarke during a hearing on Sept. 22 on the renewal of Comcast’s 12-year-old franchise agreement. Clarke had asked if the agreement was an exclusive one with Comcast.
> Franchise agreements between a local government and cable operator are non-exclusive. That means anyone with the money can operate in Baltimore. And under federal regulations, the agreements apply only to cable television service.
The reason Comcast is a monopoly in Baltimore isn't "political donations." It's because the city insists that any competitor must build out to the whole city--which means running fiber to vast swaths of the city where people are too poor to pay what it would cost to recoup the investment. That, in turn, would force the company to recoup that investment from paying customers, which would drive up prices compared to the cable that's already in the ground.
> which means running fiber to vast swaths of the city where people are too poor
Imagine the sad state of affairs if they didn't have government programs for these same problems with electricity and phone lines in the 30's through the 60's. Not just in relatively dense city areas, but even rural areas.
There were plenty of things wrong with Ma Bell, but having short-term profit rule all else is just one more systemic issue that keeps poor areas poor.
Sadly, I doubt this will ever get better; the system is too entrenched, and can protect it's interests better than any other human system in the past, making it nigh-impossible to topple.
Reminiscing back to electrification in the 1930s overlooks a larger problem: cost disease. The US couldn’t afford to build any of the infrastructure we built back then. NYC can barely afford maintain its subway. Just extending the existing 120-mile long network by less than 10% will take longer than it took to build the whole to work in the first place.
People perceive it as a political problem, and in a sense it is, but they’re viewing it too narrowly. The US has enormous trouble building all sorts of infrastructure that other developed countries build relatively cheaply.
I would argue that in itself is also a political problem. Either you play with monopolies that drag things out and milk you for all your worth, or you play with local municipalities that have a byzantine rule set and politicians who love lobster dinners, or deal with a federal government that is influenced by the individuals and companies who want their pound of flesh, or...
And even without corruption, in a fair world: you have to not damage property, have safe practices, and pay your workers well. While I'm in favor, doing any of that balloons costs.
The solution - to have an efficient, fair, non-corrupt system - is simply not possible today, and likely never will be. Unless you are already a monopoly that can do whatever you please and abuse whoever you want, building infrastructure will forever be very expensive.
>This is an area where the cynical conventional wisdom just doesn't hold up to actual facts. Congress made it illegal for localities to grant monopolies back in 1992.
Apparently, it did not stop states from granting monopolies:
> Congress has only halfheartedly moved away from this system because cable and telecom are the largest political donor groups
The benefit telcos provide Congress are in letting them target employment and benefits. There are few other industries where a Congressperson can reliably create X jobs and headline benefits for their district, specifically and tangibly. That, much more than campaign contributions, explains their clout.
(People tend to vastly over-estimate the value of campaign contributions. They're lifeblood to challengers. But for incumbents, they largely have value in not going to challengers than as a direct benefit.)
What employment? It takes the same number of people to operate wired infrastructure regardless of who owns it. No cable company or telco company has moved jobs or retained jobs in an area as a bargaining chip.
Building out new capacity as well as upgrading and maintaining existing capacity involves hiring and buying locally. By practical requirement. Often, too, by contractual obligation.
The incumbents are not building out new capacity or upgrading, which is why the whole conversation is happening. They're going to maintain regardless of what the politician does.
> The incumbents are not building out new capacity or upgrading, which is why the whole conversation is happening.
Your assertion is false. https://www.vox.com/2018/12/12/18134899/internet-broafband-f... ("Finally some good news: The internet is getting faster, especially fixed broadband internet. Broadband download speeds in the U.S. rose 35.8 percent and upload speeds are up 22 percent from last year, according to internet speed-test company Ookla in its latest U.S. broadband report... As of October, the U.S. ranked seventh in the world in broadband.").
> incumbents are not building out new capacity or upgrading, which is why the whole conversation is happening
Look up your local telco monopoly and look at the number of field offices, warehouses, et cetera they have. It's substantial. That's because telecom is tough. It's also because it wins contracts.
Electrical, telephone, and cable tv wiring actually have a huge first mover advantage.
Whoever wired the thing first gets most of the customers and can pay for the build out. If you overbuild a roughly equivalent network, you're unlikely to get a lot of customers and you're unlikely to be able to pay for your buildout.
It doesn't matter if you have an exclusive franchise agreement once your network is built; the business realities provide exclusivity.
