More competition in rural markets likely

May 21, 2009

Whatever else might happen with the broadband stimulus program, odds are that the spending of those funds will increase the amount of competition in rural markets. The reason is simple enough: cable, mobile and fixed wireless service providers are likely to apply for grants under the programs, and it is likely some will receive funding.

The American Cable Association, an industry group for small independent cable operators, probably will make a fairly significant play for funds. To be sure, many rural telcos also run separate cable system operations. But even where an in-region telco gets funds to support its in-region cable operation, increased broadband access from the cable unit will dampen demand for telco-provided broadband...