Susan Crawford published an excellent essay in the New York Times presenting her Looming Broadband Monopoly argument as a discussion of the coming digital divide between those with access to next-generation networks and those without.

These numbers are likely to grow even starker as the 30 percent of Americans without any kind of Internet access come online. When they do, particularly if the next several years deliver subpar growth in personal income, they will probably go for the only option that is at all within their reach: wireless smartphones. A wired high-speed Internet plan might cost $100 a month; a smartphone plan might cost half that, often with a free or heavily discounted phone thrown in.

The problem is that smartphone access is not a substitute for wired. The vast majority of jobs require online applications, but it is hard to type up a résumé on a hand-held device; it is hard to get a college degree from a remote location using wireless. Few people would start a business using only a wireless connection.

She identifies the problem as a lack of competition in the market while highlighting the role of lobbying from the wealthy cable companies to keep it that way:

The bigger problem is the lack of competition in cable markets. Though there are several large cable companies nationwide, each dominates its own fragmented kingdom of local markets: Comcast is the only game in Philadelphia, while Time Warner dominates Cleveland. That is partly because it is so expensive to lay down the physical cables, and companies, having paid for those networks, guard them jealously, clustering their operations and spending tens of millions of dollars to lobby against laws that might oblige them to share their infrastructure.

In this essay, her preferred solution is better federal regulation that would require companies that own networks to share parts of their infrastructure with competitors (to significantly reduce the problems of natural monopoly). Unfortunately, she did not explicitly discuss the solution of the communities building their own networks - a topic she has discussed at great length elsewhere in very positive terms. Her essay ties in nicely with the paper we highlighted looking at the growing costs of network exclusion.

While we recognize the benefits of open access policies that require infrastructure owners to share their network rather than monopolizing it and profiting from the scarcity of these essential connections, we believe the best solution is to allow/encourage communities to build publicly owned networks -- particularly those that are open to independent service providers.

Even if the Obama Administration had the courage to take on powerful companies like AT&T and Comcast, the next administration could easily reverse any policies meant to encourage competition. Better to build community-owned infrastructure that is not as susceptible to the massive lobbying dollars of big cable and telephone companies.

Update: For those who saw the a subsequent response to Crawford's column in the letters-to-the-editor from Verizon's Chairman, he flat out lied in several of his rebuttal points.

The Netflix Techblog has released a graph of performance by Internet Service Provider - which I modified to demonstrate the Looming cable monopoly as identified by Susan Crawford (and recently discussed here by Mitch Shapiro).

The trend is unmistakable.  There are 2 distinct groupings - the cable providers all beat the DSL providers (Verizon is in the middle, likely due to its fast FiOS speeds averaging with much slower DSL connections).  At the very bottom is Clear's 4G WiMax - you know, the superfast wireless that is the key to fast broadband!  

Communities need to read this chart and take a lesson: the future of broadband is not pretty if you do not have a network that puts your needs first.  Cable broadband speeds are increasingly more rapidly than DSL, meaning a local monopoly on high speed broadband, with DSL slowly becoming the modern dial-up.

The Comcast/NBCU merger poses a real threat to the future of innovation, competition, and the open Internet. Put simply: size matters. The larger Comcast gets, the more market power it has and the more all other markets that depend on broadband and media will be distorted.

Susan Crawford knows this better than most and explains why everyone should be concerned about it.

As we've harped on time and time again:

The crucial thing to understand is that high-speed Internet access to the home really is a crushingly-expensive natural monopoly service to install. The telephone companies haven’t found a way to make this work, because it’s so much more expensive to dig up the streets to install fiber than it is to upgrade cable electronics to DOCSIS 3.0. So they have backed off. The cable industry has made its investment, and is ready to reap its rewards of scale and high fixed costs - secure in the knowledge that no competition is coming after it, and having divided up the country neatly among its members. Meanwhile, the telcos are steadly losing fistfuls of money.

As Morgan once said of railroads, “The American public seems to be unwilling to admit . . . that it has a choice between regulated legal agreements and unregulated extralegal agreements. We should have cast away more than 50 years ago the impossible doctrine of protection of the public by railway competition.” In the cable world, we are deep into unregulated extralegal agreements, and competition is not going to rescue us.

The longer communities wait to build this important infrastructure, the harder it will be. It is hard to imagine national candidate speaking more stridently about the important of the open Internet than did Obama and even he bowed to the pressure of the private Internet access providers. While we should pressure the federal government to regulate in the public interest, we must take responsibility for our future at the local level with smart investments.