NCPA - National Center for Policy Analysis

Competing Broadband Networks

April 5, 2004

How many hard-wire broadband networks for high-speed internet access would companies build, assuming they were allowed to use municipal easements and could get around monopoly local utility franchises?

Economists who believe that such services are "natural monopolies" -- ones delivered most efficiently by a single, government-regulated carrier -- would say only one firm, typically the local telephone company -- would make such an investment.

But most American homes already have three sets of wires entering their homes --telephone, cable television and electric power. High-speed Internet access through all three may be available nationwide soon, say observers.

Telephone utilities offer Digital Subscriber Lines (DSL), cable television companies are trying to sell customers on high-speed cable modems. Now electric power companies in a few places are offering broadband Internet through their power outlets.

Allentown, Pa., Cincinnati and Manassas, Va., are the only U.S. cities where residents are paying for the new service, but electric companies from North Carolina to Hawaii are testing the service or plan to begin a pilot project.

  • About 24 million people subscribe to broadband service, according to Washington research firm Precursor Group.
  • Customers typically pay $30 to $40 a month for DSL service and $40 to $50 a month for Internet access over cable.
  • For electric power access, the city charges $26.95 a month in Manassas; in Cincinnati, a private provider charges a basic rate of $29.95 a month.

Internet access from power lines began to get attention last year, when the FCC began promoting the service last year as a way to offer high-speed Internet services to rural areas, and as an alternative to high-speed access from phone, cable and satellite companies that could lower consumer prices.

Source: William Glanz, "Electric Companies Begin Offering Broadband Service," Washington Times, April 5, 2004.


Browse more articles on Government Issues