Government Report: No High Speed Broadband Competition [telecom]

The cited report states seven conclusions, one of which is:

Once again I ask my long-standing question: Does building two wireline networks really promote lower retail prices?

In my experience it costs a lot of money to build a wireline network. Overbuilding an existing wireline network would cost *at least as much* -- and probably more than the cost of building the first network. In a previous (2004) T-D post I wrote an extensive post addressing this issue:

"Re: Verizon Cable TV?" 5 posts by 4 authors. 8/22/04.

-or-

In this report I cited three reasons to justify my argument:

1. Simple economics.
2. Buried-cable construction costs.
3. Franchise requirements.

But even if the cost of the second network were the same as the first network, it should be obvious that the total capital investment to build two networks would be double the investment to build one network.

Yet the number of potential subscribers would remain the same, so each company's potential subscriber base would be reduced. If, for example, each company got 50% of the subscribers, its total revenue would be only half of the total. In short, each company's ROI would be cut in half.

I simply don't understand how this situation would result in lower retail prices.

Neal McLain