The smart folks at Light Reading have kicked off a four-part series analyzing the Cable industry’s performance and opportunities in serving the business market. If you’re the type who enjoys wonking out on telecommunications complexities, you’ll want to check the series out.
The first part of the series, “How Cable Means Business About Business,” examines cable company entry into the business data services market. The data it presents makes clear how companies such as Comcast and Time Warner (now part of Charter Communications) have made significant inroads in the commercial communications service market. As this chart from the article shows, Comcast’s business market strategy appears focused on medium-sized business customers.
And Time Warner Cable (now owned by Charter Communications) has seen year over year revenue growth in the commercial service market:
So what’s the big deal about these charts? Why is cable’s growth in commercial services relevant? It’s important because the Federal Communications Commission (FCC) is poised to impose new price regulations on existing antiquated copper-based networks as well as new fiber facilities and services that serve business customers. The FCC justifies this regulatory overreach on the perceived lack of competition in the marketplace.
In doing so, however, the Commission appears to be turning a blind eye to the true competitive nature of the commercial services market. As we’ve noted before, in crafting new price regulation, the FCC is relying on dated, incomplete and deeply flawed data. The FCC’s market data is not only nearly three years old, it also fails to capture the robust entry and success of cable in this market.
Imposing heavy handed price regulation on this rapidly changing market could create long-term incentives that ultimately lower capital investment, lessen facilities-based competition, and harm consumer for businesses in urban and rural markets across the nation.
Broadband network investment vital to 21st century economic growth and job development should not be put at risk, it’s not too late for the FCC to pause and consider these new data points before rushing to judgment.