Re: Some truth about Comcast - WikiLeaks style

[Robert Bonomi <bonomi () mail r-bonomi com>]

> From nanog-bounces+bonomi=mail.r-bonomi.com () nanog org  Mon Dec 20 15:01:07 2010
> Date: Mon, 20 Dec 2010 13:00:22 -0800
> From: Leo Bicknell <bicknell () ufp org>
> To: NANOG list <nanog () nanog org>
> Subject: Re: Some truth about Comcast - WikiLeaks style
>
>
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> In a message written on Mon, Dec 20, 2010 at 03:02:05PM -0500, Joe Provo wr=
> ote:
> > An assertion which was false; you can discuss the 'practicality' or
> > whatever the experience has taught us as a nation, but to say "there
> > are no" are "this datum generalizes for all" in most all of this=20
> > and sister threads is a major error.  There is no national scope,=20
> > and the jury is still out if statewide scope [fpr video] is a good=20
> > or bad thing.=20
> > =20
> > Sorry to muddy with facts, please resume pontificating.
>
> Facts are good.  It appears there are more areas with two or more
> cable TV providers than I thought, and that knowledge is useful.
> I still maintain that the current set of regulation, laws, and
> economic realities have lead to insigifnicant compeition in that
> area, but that's purely an opinion.
>
> You are also correct that there is a lack of context in these
> threads.  There is a federal role (FCC, congressional), a state
> role (state PUC's), and a local role (county/city/town PUC's).
> Looking from the perspective of a town it's clear some have cable
> compeition, for example.  Look at it nationally, and it's a really
> small percentage (on the order of under 2%, best I can tell so far).
> One man's everyone is another's no one.
>
> I guess the question is, if these overbuilds work out so well in the
> cities where they do exist, why don't they exist more places?

As a character in a Robert Heinlein book says: "The answer to _any_
question that starts off 'why don't they..' is always 'money'."

For a cable built-out to be 'profitable', you have to get some particular
percentage of the 'covered' households to sign up for service.  To support
multiple providers the total 'penertration' in that area has to be at least:
    #providers * break-even_subscriber_percentage

I have no idea what the current break-even percentage is, but (picking 
numbers out of thin air for the sake of argument) if it is, say 30% of
the households within the service area, then there are simply "not enough
customers to go around", even at complete market saturation (where 100% of 
the households have cable service) to support _four_ "profitable" cable 
providers.

"Overbuild" is practical *ONLY* where: (a) the population density is high,
lowering 'per customer' costs, and (b) service 'penetration' is high enough 
that the active subscriber base (as distinct from 'potential' subscribers) 
sufficient to support the 'overhead' of two complete, parallel, physical 
plants.  This tends to be 'self-limiting', to up-scale, high-density housing,
neighborhoods.   The 'raw economics' of the situation may well be distorted
by local government 'intrference' -- e.g., requiring a provider serve _all_
households within arbitrary boundaries, rather than just 'low hanging fruit'
areas.