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Comment by rayiner | Hacker News Reader

> The cable franchise agreements are exclusive. That's why you don't see two companies offering cable service. If they weren't you other companies would compete.

Nope.[1] Exclusive franchise agreements are illegal under federal law since 1996. There is no competition because the business proposition sucks. The only sensible play in most places is to try and target a niche market of wealthy neighborhoods that'll pay for the triple play. That is prohibited under most franchise agreements.

Four nationwide competitors isn't a monopoly any more than Pepsi and Coke are, who own almost all soft drink brands.

[1] e.g. http://www.wilmingtonde.gov/docs/1320/3716Rev1.pdf (Second whereas paragraph).

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OK, it was legal prior to 1996 (was it the Cable Television Consumer Protection and Competition Act of 1992?), and majority of cable systems were established in the 20-30 years prior to 1996. So if a cable company was granted a monopoly by the government, and if it is able to keep competitors out because they enjoy monopolistic market share, isn't the critique fair?

If I want build a network in Comcast territory, there are very "new" customers. I have to go through an extremely expensive build out, and convince customers to switch. Meanwhile, Comcast can undercut me on price because they have already have infrastructure paid for. They can offer $1 internet to people trying to leave until I run out of money.

So yes, you are right that providers aren't currently monopolies, but they exist in markets distorted by being monopolies in the past.

edit: note that the Comcast/Time Warner mega providers grew themselves by buying up all the small ex-monopolies across the country - they didn't build out against them.

Some municipalities limit the structure of the entity offering the service however (eg. cannot be substantially and exclusively owned by the ratepayers, or their agent(s)), however the FCC seems to be working on getting those restrictions thrown out.

"... cannot be substantially and exclusively owned by the ratepayers ..."

Does that sentence mean that it's illegal for a municipality to form co-ops, and then for example lay their own fiber and then share the costs equally?

Yes

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