In Susan Crawford’s 2013 book “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,” the Harvard Law School professor argued that the U.S. telecommunications industry had become dominated by a few powerful companies, leading to limited competition and negative consequences for consumers, especially for broadband internet.
Crawford’s ire was focused particularly on Comcast, AT&T, and Verizon, as she made the case that these three firms were essentially monopolies that had divided territories and set up roadblocks through mergers, vertical integration, and influence over regulators and franchisors to prevent competition and innovation. In particular, she noted the power Comcast commanded in securing access to live sports, allowing them to effectively prevent cord-cutting and limit competition from other cable companies.
According to Crawford, the consequences of this monopoly power were high prices for service, poor customer service, and limited access to high-speed internet in certain areas, particularly in rural and low-income communities. In effect, she saw no incentives for broadband companies to invest in high-speed and reliable internet. In response, she proposed increased competition and regulation, including the development of fiber-based municipal broadband to foster greater consumer choice, lower prices, and improved access to reliable internet service.
A decade later, the broadband market is far more dynamically competitive than critics like Crawford believed was possible. YouTube TV’s rights to NFL Sunday Ticket (as well as the massive amount of programming available online) suggests that Comcast did not have the control over important programming like live sports that would have enabled them to prevent cord-cutting or to limit competition. And the rise of 10G broadband also suggests that there is much more competition in the broadband market than Crawford believed was possible, as her “future proof” goal of symmetrical 1Gb Internet will soon be slower than what the market actually provides.
Innovation No. 1: Must-Have Programming Is All Online Now
In “Captive Audience,” Crawford made much of Comcast’s control over must-have programming—particularly live sports:
Brian Roberts knew that Comcast needed to maintain, as long as possible, its power to sell subscribers large bundles of programming that included “must-have” content—particularly live sports. To do that, he needed to make sure that live sports would not be available over the Internet on demand, at attractive prices, without a subscription. The programmers and networks had to be assured that they would make more money selling to cable distributors than directly to online consumers… Brian Roberts’s favorite sports may be squash, but as a businessman he knows the real value in American television entertainment lies in controlling rights to football, basketball, and baseball games. If there was a guiding ethos to Comcast’s pursuit of NBC Universal, it was to gain control over more sports programming. Live sports is the one thing that people can get almost nowhere else—not on DVD, not online—the only options are pay-TV or a stadium seat.
While she made much of the strength of Comcast’s control over live-sports programming at the time, the world has changed rapidly in the decade since. For instance, NFL Sunday Ticket—the exclusive province of satellite company DirecTV from 1994 until 2022—will now be available over YouTube TV, starting with the 2023 season. While NFL Sunday Ticket has never carried a viewer’s local games, you never needed a cable package to access those, because you could even use a terrestrial antenna for a local CBS or Fox station. The National Football League was then and remains by far the most popular sports league in the United States, and is certainly high-demand content. As one article put it:
Sports continued to show why they are the most valuable programming on television in 2022, making another strong statement at a time when the entertainment industry faces challenges with attracting viewers to scripted programming. The NFL and college football continued to draw the most viewers of any form of programming as viewers watched sports in record numbers. Overall, sports accounted for 94 of the 100 most-watched telecasts for the year. That was down just one number from last year, but up from 75 during the election-heavy 2020 docket, and from 92 telecasts in 2019. The NFL put a record number of telecasts in the top 100 in 2022, with a stunning 82 games cracking the list. That figure is up from 75 in 2021, 72 in 2020 and 78 in 2019.
This was a major hole in her argument from the start. But with the move of NFL Sunday Ticket to YouTube TV—along with the availability of live sports through services like Hulu + Live TV, FuboTV, Sling TV, ESPN+, Paramount+, and Peacock—it’s easier than ever for cable subscribers who are sports fans to cut the cord, especially if they can afford to combine one of those services with offerings like NBA League Pass, MLB.TV, and/or NHL.TV.
For in-region games, which are usually not available for National Basketball Association, Major League Baseball, or the National Hockey League through their television packages (or over-the-air through an antenna), you must purchase access to a regional sports network (RSN). But even here, cable no longer enjoys monopoly power. For instance, you can access the vast majority of RSNs through DirecTV Stream and FuboTV.
Moreover, the proliferation of high-demand content through other over-the-top (OTT) media services like Netflix, Disney Plus, HBO Max, and Apple TV have also made it so that big cable companies no longer have anything like “monopoly power” over programming (if they ever did) to “force” bundles on users who demand high-speed internet. These developments alone significantly undercut Crawford’s original thesis that Americans’ desire for high-demand content make them a “captive audience” for cable providers like Comcast.
Innovation No. 2: 10G and Rapidly Increasing Speeds and Access
Back in 2013, Crawford argued that, because major cable providers had effectively divided up the marketplace for its captive audiences, “[t]here is no competitive pressure that would drive them to install next-generation fiber networks to make America globally competitive.” To Crawford, what America really needed was “access to reasonably priced 1-Gb symmetric fiber-to-the-home networks.”
As a policy solution to achieve this goal, she pointed to the “successes” of municipal broadband, but also promoted the building out of fiber infrastructure at the national level. Interestingly, and despite her analysis of the marketplace, just 10 years later, the market has provided internet options even faster than the 1Gb network she touted as the future.
Comcast (also known as Xfinity) is now touting 10G (building off the 5G branding of wireless) as the new technology, referring not to the tenth generation of technology but to 10Gb speeds (along with ultra-low latency and better WiFi) that will likely be available in coming years, over both cable and fiber networks. In fact, Comcast will be able to provide this without having to build out new networks at all, just by switching to DOCSIS 4.0 modems. And it will be available (eventually) to all consumers who currently have access to Xfinity. In fact, Comcast announced in February that:
Today, Comcast accelerates the nation’s largest and fastest multi-gig deployment and announced that its latest Xfinity 10G network upgrade will be launched to 10 million homes and businesses by the end of this month. These locations now have the foundational network enhancements in place to begin deploying DOCSIS 4.0, setting the stage for the introduction of new symmetrical multi-gigabit Internet options before the end of 2023 that can be delivered across existing networks with less cost. To date, and ahead of schedule, more than 40 markets across Comcast service areas have implemented network improvements including Atlanta, Boston, Chicago, Denver, Houston, Miami, Philadelphia, Salt Lake City, Seattle, San Francisco, Washington D.C., and others. The full deployment of these technical capabilities will reach more than 50 million homes and businesses by 2025.
To be fair, Crawford did write another book in 2018, “Fiber: The Coming Tech Revolution?and Why America Might Miss It,” in which she pointed to what she saw as the continued successes of municipal broadband vis-a-vis the market in providing increasingly fast speeds. For instance, Chattanooga’s municipal broadband network is working toward offering up to 25Gbps speeds.
But there is an economic reason that municipal broadband often offers higher speeds than private internet service providers: it isn’t subject to the profit-and-loss test of the marketplace. The presence of massive cross-subsidization from electrical utilities that actually have a captive audience is what makes it possible for municipal broadband to offer speeds far beyond what consumers demand, sometimes even at lower prices than private providers. But this is actually an example of predatory entry rather than competition, as these municipalities are ultimately able to pass on costs to the taxpayer or ratepayer.
In sum, far from not feeling any need to innovate and create high-speed networks, Comcast has actually upgraded its networks beyond what Crawford could even imagine just 10 years ago. This makes much more sense if the market is dynamically competitive than if it is a captive audience. Municipal broadband actually relies on real captive audiences to subsidize its fiber buildouts: electric-utility customers and taxpayers.
Conclusion
Ten years later, it is clear that cable providers do not have a “captive audience” of consumers who must bundle their exclusive must-have content with high-speed internet. Cutting the cord and accessing content, including live sports, has never been easier. But more than that, the market continues to evolve and innovate, and Comcast itself is upgrading its networks through DOCSIS 4.0 modems to accommodate internet speeds even faster than the municipal fiber networks that Crawford imagined would be state of the art for the foreseeable future just a decade ago.
