Reactions to Time Warner Cable's second modem rental fee hike in less than a year have been about what you'd expect, with most consumers complaining about the company's relentless rate hikes (the fee came right on the heels of general service hikes for many), before the smart among them went out and bought their own modem to avoid the fee.
The more interesting angle perhaps has been watching many in the press suddenly and belatedly realize that the reason Time Warner Cable can get away with constantly socking users with rate hikes of all sorts -- is because they're a lumbering, uncompetitive monopoly (or a barely competitive duopoly) in the majority of the markets they currently operate in.
Even the Wall Street Journal, historically a paper with no limit of love for such consolidated market power, had plenty to say about the hike:
Time Warner Cable explains this new charge with a clever turn of phrase. Read the email posted above and you can see the words: "We continue to invest in our network." The implication here is that Time Warner Cable is putting big new sums into the networks that carry Internet and video traffic. Now look at Time Warner Cable presentations to Wall Street. There the company tells a somewhat different story....Such are the joys of monopoly. And in my Brooklyn neighborhood, this seems an untouchable monopoly where competitor Verizon has not yet arrived, and satellite service is difficult to receive.
The stories are all the same across New York State in particular, where FiOS can be hard to find and Time Warner Cable's most common competitor is absurdly over-priced 3 Mbps Verizon or Frontier DSL. In a piece in the Albany Times Union, which notes the hikes hit consumers there right after an 18 hour service outage, you can watch as a reporter almost-but-not-quite realizes the hikes are thanks to napping regulators and too little market competition. In Rochester, NY, reporter Rachel Barnhart also suddenly realizes why Time Warner Cable gets away with murder (via Stop the Cap):
Some wonder if the Internet should be regulated as a utility. Think about this fact: Time Warner, which raked in more than $21 billion last year, has 700,000 subscribers in the Buffalo and Rochester markets. I m not sure how many of those are businesses. But the Western New York market has 875,000 households. That s an astounding market penetration. Does this mean Time Warner is the best choice or the least worse option?
The problem is this shouldn't even be a question or a sudden revelation. If a reporter's job is to report the truth, a story about the broadband industry should always have at its core the obvious truth that most of the United States broadband market is uncompetitive, resulting in higher prices and worse customers service. That's not opinion, it's fact.
This truth shouldn't come as a surprise to reporters, be buried in belated missives on personal blogs, or be omitted entirely from stories just because the broadband industry insists everything in this industry is roses and sunshine. Part of the reason this market remains so uncompetitive is because too many bloggers and reporters aid the industry in pretending otherwise.
It should be interesting to watch the press belatedly realize that with AT&T and Verizon ceding control of the fixed line broadband market to cable across huge swaths of the United States (in exchange for co-marketing of wireless services), that this kind of predatory price gouging is only going to get worse. Unless of course you think that new FCC boss (and former cable and wireless industry lobbyist) Tom Wheeler is going to save us all, in which case you should have nothing to worry about.
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