How important is broadband competition? For some, really important

For many readers of this blog, this story in the Consumerist is a harrowing account.

Only months after moving into his new home in Washington state, Consumerist reader Seth is already looking to sell his house. He didn’t lose his job or discover that the property is haunted. No, Seth can’t stay much longer because no one can provide broadband service to his address; even though Comcast and CenturyLink both misled him into thinking he’d be connected to their networks and in spite of the fact that his county runs a high-speed fiberoptic network that goes very near to his property.

The story itself is as nightmarish as it gets and, in the end, you are kind of relieved he chose to sell his house.

But this also has bearing on the assessment of the Comcast-Time Warner merger. One of their arguments with regard to broadband is that there is satellite availability everywhere and so there is competition. Satellite was listed as a potential provider for Seth but there were issues.

Satellite broadband is getting faster and more affordable, but it’s still significantly more expensive for someone who would be using the Internet both day and night for home and business.

Additionally, Seth’s work requires that he have a VPN connection. Unfortunately, the latency on satellite broadband is so high that most residential-level service providers won’t guarantee that customers can access VPNs. So satellite might get TV and some Internet into Seth’s home, but not into his home office. Thus, strike ViaSat from the above list.

Thus, while there may be competition for some aspects of broadband, you have to take care in inferring from that there is competition with all broadband services.

5 Replies to “How important is broadband competition? For some, really important”

Jim Kay says:

March 27, 2015 at 10:54 am

I did not read the account because I have my own satellite experience. First, satellite Internet is highly vulnerable to weather related interruptions. Second, the altitude (22,500 miles) required for a geostationary satellite introduces a minimum signal propagation delay that is predictably unacceptable for work or business usage. Seth is presumably a technical person and there is no excuse for him not to have known IN ADVANCE that he was not going to be satisfied.

I have not sympathy for Seth and you should not either!

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1. JB Abbott says:
  
  March 28, 2015 at 9:20 am
  
  You may want to read the account. The issues with Statellite were only a side note. The real issue deals with the “lies” Comcast made to to Seth. The article makes it clear that Comcast enjoys a monopolistic advantage; they don’t have to worry about customer satisfaction.
  
  Reply
  1. Jim Kay says:
    
    March 28, 2015 at 10:06 am
    
    I had my service from Dish Network. They lied to me too. DirecTV also lied to me. As for Comcast, they are regularly rated as the most hated service provider in the US. None of them care about customer satisfaction. This is hardly even news, it’s old hat. I was fool enough to get VoIP telephone service from Comcast and it kept failing for six months. They kept insisting I was the ONLY customer with this particular problem but one of their technical people accidentally told me that there were a significant number of people with the same problem. With that information, I got them to cancel the contract without a huge cancellation fee.
somedude says:

March 28, 2015 at 9:20 am

In the linked below version of this story, it’s clearly stated that before he bought the house he checked with two providers and both stated that the house would get high speed internet.

http://arstechnica.com/business/2015/03/new-homeowner-selling-house-because-he-cant-get-comcast-internet/

Also his house is on the gov’s list of locations covered.
http://www.broadbandmap.gov/

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Mike Sethlin says:

March 28, 2015 at 12:35 pm

Wow

First a strawman. Comcast TWC do not argue that, they argue that regardless of how competitive satellite currently is the Comcast TWC merger will not affect any substitution effects due to non-overlapping footprint.

Second the same old marginal vs inframarginal fallacy. There are plenty of very competitive markets where one firm has a hold on a particular part of the demand curve. The magazine market is competitive but if you have very particular tastes then you may have no other option but for a particular magazine. What matters is substitution at the margin. This guy obviously has very specialized needs. So?

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