The Alternative Facts of Cable Companies

[Commentary] Cable is in many ways an uncreative business—“like chicken in a grocery store,” as Comcast founder Ralph Roberts once said. The cable guys (today, mostly Comcast and Charter in the US, who together account for half of the 92 million high-speed internet access subscriptions in the country) have successfully implemented one basic, foolproof idea: locking up entire geographic markets by acquisition while scaling up rapidly as possible. With high numbers of subscribers all within clustered markets, costs per subscriber are vanishingly low, back office functions can be shared, programming can be bought at a bulk discount price (half or a third of what any smaller operator might pay), and competition can be avoided. Meanwhile, customers keep paying. Another week, another chicken. But in order to avoid anyone getting the idea that oversight might be a good idea, Charter and Comcast have to uphold the fiction that their service is getting better and better in response to trumpeted “competition”—even if there isn’t any actual rival anywhere around. If everyone believes that services are improving, then there’s no need for government intervention. The market is providing!

What a monopolist most desires is a quiet life. That’s why Spectrum’s marketing and management teams let loose with ads claiming that consumers would get new X internet data speeds — “fast, reliable internet speeds.” The branding people went nuts, using adjectives like Turbo, Extreme, and Ultimate for the company’s highest-speed 200 or 300 Mbps download offerings. But no one, or very few people, could actually experience those speeds. Why? Because the company deliberately required that internet data connections be shared among a gazillion people in each neighborhood.