Broadband competition: Is this as good as it gets?
Competition in the broadband space is currently about as good as it’s going to get for the foreseeable future, and could even backslide, according to Blair Levin, an analyst with Stifel Nicolaus.
“Prospects for the long-heralded ‘third pipe’ appear dim and dimming,” Levin said at the CoBank Communications Industry Executive Forum in Colorado this week, referring to the notion of a hypothetical major competitor to both telco and cable companies.
At times, municipalities and utility energy providers have been proposed as possible providers of a ‘third pipe.’ But energy firms retreated en masse from dalliances in telecom during the industry’s bubble correction shortly after the turn of the century, and broadband-over-powerline technology has thus far failed to take off. Municipal broadband efforts, meanwhile, have met with mixed results.
“In terms of wireless and broadband buildouts, there’s unlikely to be another new national buildout, other than Clearwire, in the foreseeable future,” Levin said. “The market is as competitive as it is ever going to be, as far as we can see. And it could become less competitive.”
According to a recent report from the Pew Internet and American Life Project, 46% of broadband users are served by DSL as of May 2008, 39% by cable modem, 12% by wireless (a growing contingent) and 2% by fiber. On average, broadband prices have declined 4% in the last three years, the study found.
“There’s not that much left to be disruptive,” Levin continued. “White spaces could be in rural areas, and a little bit in broadband, but I don’t think so. Other things that people are looking to be disruptive I don’t think will happen.”
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