Duop Music

Broadband politics is turning out to be mostly just a game for two. That's not always good.
by | October 2005

With each passing day, high-speed Internet service looks less like a luxury and more like an essential utility. So it may be cause for state and local concern that the broadband market is emerging as a duopoly. It's the cable companies versus the Baby Bells--cable-modem service versus DSL. In Denver, it's Comcast versus Qwest. In Houston, it's Time Warner versus SBC. But in most metro areas, the dynamic is the same: Cable and phone companies are invading each other's turf. Cable now sells voice, the Bells are busting into TV, and both sell high-speed Internet.

The broadband duopoly didn't emerge by accident. Recent decisions by the U.S. Supreme Court and the Federal Communications Commission have made it harder for competitors to gain access to cable and telephone networks. In some ways, this is good for consumers: Free to keep their infrastructure to themselves, the broadband titans have more incentive to invest in new offerings.

There's a danger in this, or any duopoly, however. It's the prospect that the two competitors, rather than slugging it out with each other, will eventually fall into a comfy co-existence. There's evidence of this in some markets. In Washington, D.C., basic broadband effectively costs upwards of $50 a month. To get a better deal you have to buy the companies' other services, too. Neither party has a huge incentive to provide impeccable customer service. Complaints about tech support are rampant as well. The cable and phone companies have "done a remarkable job of rolling out service," the Washington Post reported in August. But "they let down customers in other ways."

If there's one place where the broadband companies do slam each other hard, it's state legislatures. The big battleground this year has been Texas. Bell companies SBC and Verizon are laying fiber-optic lines in different parts of the state, with the goal of getting into the TV business. This summer, they asked the legislature to exempt them from a task that cable companies have always had to do: negotiating franchise agreements with every city they do business in.

An army of 120 SBC lobbyists descended upon the capitol. Cable giants Time Warner and Cox fought them hard. Caught somewhere in the middle were local governments. They opposed early versions of SBC's proposal, because it would have stripped them of revenue and control over their rights-of-way. By the time the final bill passed in August, most of their concerns had been resolved, and the Bells emerged with most of what they wanted. "For us, it was essentially the battle of the billionaires," says Frank Sturzl, executive director of the Texas Municipal League. "We just wanted to stay out of the crossfire."