What Comcast's huge profits tell us about the state of the broadband industry

A common argument against network neutrality regulations is that restricting how broadband providers run their networks -- for example, by prohibiting them from charging certain content providers extra to put their content in "fast lanes" while everyone else's content gets stuck in the slow lane -- will make it too difficult for network providers to recoup their investments in broadband infrastructure. So it's interesting to look at the 2014 financial results from the nation's largest broadband provider, Comcast.

Comcast's cable division had operating cash flow (revenues minus operating expenses) of $18 billion. I think we can draw two lessons from Comcast's financial results.

• First, we're nowhere close to the point where increased regulations will make it unprofitable to own and operate broadband networks. Critics have warned that strong network neutrality regulations will reduce the incentive to invest in broadband networks, and they probably will. But even if they're right, it's likely that running a broadband network will continue to be a highly profitable activity.
• Second, Comcast's high profits are evidence of high barriers to entry in the broadband industry. Ordinarily, a company that consistently made billions of dollars in profits would attract new competitors seeking to capture a piece of the market.