Incumbent providers, grown lazy on a steady diet of public subsidies and monopoly rents, have done their best to cast this as a debate between efficient private competitors and inefficient government monopolies. But it is the incumbents that would rather regulate than compete. They resist municipal entry not because it is incompetent – no one resists incompetent competitors – or because it is unnecessary. Rather incumbents resist municipal entry because they recognize the ability of local government to offer a genuine competitive alternative to a high priced monopoly or duopoly services.
Comcast Reacts to Google Fiber in Provo
The sale of iProvo to Google Fiber means that Comcast now gets to compete against Google's gig - Time Warner Cable is the incumbent cable company in Kansas City and Austin. Comcast wasted little time and has improved its bundle in Provo long before any new customers are turned on. The Free UTOPIA blog recently reported that Comcast, in response to the incoming competition, is increasing speeds. Jesse writes:
Competition is good, and Comcast is just now proving it. I spoke with one of their sales guys who confirmed that Comcast will be offering a package of 250Mbps/50Mbps for $70 starting in September, but only in Provo. (Sorry, everywhere else.) This is in direct response to Google Fiber coming to town and will include a new modem with a built-in 802.11ac router to take advantage of the speed bump. It’s unknown if this speed tier will land in any other cities in the future.
This is yet another story proving that having a fiber network in your town benefits everyone, not just subscribers.
This is compelling evidence that markets with only choices between DSL and cable are not sufficiently competitive, regardless of what wireless options are available. When threatened with a competitor that it cannot harm with its legions of lobbyists in the state capital or the threat of predatory pricing, Comcast responds with investment and lower prices. Regulators should take note.