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Exclusive franchise agreements are illegal for eg cable. They have been illegal for a quarter of a century.

You'll find that nearly all examples commonly presented of the lack of competition, are not due to market lock-out, it's due to the high cost and time required to gain approval to build in a given town or city. The combined cost, with pre-existing competition entrenched, is a very large disincentive. Google Fiber didn't grind to a halt on their build-out because they couldn't legally access markets, it's because it's painfully expensive and very slow.

There are three solutions to the problem: new technology that bypasses (low earth orbit satellite, wireless); lower the total cost to enter markets and compete; mandate shared access to existing infrastructure (and ideally simultaneously lower the other market entry costs).




Thanks for the correction! (And as also noted here: https://news.ycombinator.com/item?id=8066340 )

Upton Sinclair's "It is difficult to get a man to understand something, when his salary depends upon his not understanding it" seems relevant here.

It's illegal, but it's also murkey enough that it can be made effectively exclusive through permitting delays, etc.

If the incentives were flipped (say, a federal road fund multiplier that scaled with average speed * number of options), I feel like we'd have a lot more competition.

As is, in the contracts I've read, they're essentially "ISP gets a non-exclusive franchise right in exchange for paying local government x% of their fees from the area, and both parties agree that the portion rebated to the local government may not be separately itemized on the bill."

Which sets up some pretty perverse incentives for most part-time commissioners.


Normally when infrastructure is expensive to deploy and wasteful to duplicate like this we turn it into a utility (Water, Electric, Sewer, Roads, Telephone, etc...).

We don't do that for Internet because...




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