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Comment by jseliger | Hacker News Reader

Nothing is really stopping new entrants from joining the market -- other than the fact that deploying a broadband network in the US is really, really expensive

Actually, a lot is: Google "cable franchise agreements" or "city broadband franchise agreements" and you'll find that many if not most cities and counties either forbid or make prohibitively expensive real competition. Here is one news article about a lawsuit related to them: http://stopthecap.com/2012/06/19/court-invalidates-existing-... .

Many states are also passing telco-financed laws prohibiting local municipalities from creating Internet access as a utility. Examples: http://www.infoworld.com/d/the-industry-standard/big-carrier... or http://www.slate.com/blogs/moneybox/2013/12/30/municipal_bro... .

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I live in California and was hoping to lobby my municipal government to bargain for better service when our cable franchise came up for renewal.

What I learned was that this bargaining power had been transferred to the state level in 1996. When I talked to those who'd been in charge of the process previously, they claimed the state CPUC served as a rubber stamp.

http://www.cpuc.ca.gov/PUC/Telco/Information+for+providing+s...

If you live in California, the CPUC is, theoretically, the organization you want to lobby. When I tried to get a roadmap for broadband expansion in my area, I did not have much luck.

Yeah, unfortunately there's not much you can do. The big telcos are so politically powerful that any individual market (especially if it's a smaller one) doesn't have much bargaining power. This isn't a problem specific to telcos; this just happens anywhere you have one large unified side negotiating with a number of fractured parties with different interests (and would likely be the same when dealing with a government bureaucracy vs. a telco.)

This drives me crazy. The whole reason they are given a decades long monopoly is so they build the infrastructure. Once it is built there is absolutely no good reason to renew the monopoly. It's like continuing to pay on your 30 year mortgage after 30 years!

And when local governments had this power they renewed the cable monopolies anyway?! In 2005 San Francisco, for $8 million upfront and $500k a year, the SF government sold Comcast exclusive rights to SF's 800,000+ residents for 4 years. And this has effectively been extended indefinitely.

This is a good example of the difference between the public and private sectors.

[1] http://www.sfgate.com/bayarea/article/SAN-FRANCISCO-Board-pa...

Yeah, and laws like that are unfortunate (and likely to get overturned).

Franchise agreements exist specifically because the buildout costs are so high. Many locales place regulations on telecom companies (such as the aforementioned requirement that a company serve an entire city and not just the wealthy neighborhoods) but in order for companies to be able to be profitable under those regulations, they ask for a franchise agreement in return.

Google Fiber has so far been able to avoid these complications because they're picking and choosing their markets. They go after unencumbered markets where they can deliver service to only the wealthy parts of town (Austin being a great example -- anything inside the city limits is relatively wealthy while the less wealthy folks live in the far-flung suburbs. Kansas City is another; the poor part of town is in Kansas and the wealthy part is in MO and governed by a different authority.) I'm not convinced they'll ever go nationwide exactly because they don't want to deal with these complications.

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