With the recent FCC decisions that have classified cable modem services as an "information service," which frees it from telephone-style regulation, and the decision a week ago to drop the requirement that phone companies sell DSL access to third party providers, we now have, for all intents and purposes, a broadband duopoly in the United States.
Either you buy broadband from the cable company or from the telephone company. Not a thrilling choice.
Expect the phone companies to really push hard to sell DSL services. They will begin rolling out higher speed DSL (e.g. ADSL2, ADSL2+) that can offer download speeds of 8 megabits/second and as high as 24 megabits/second. They will try to get new phone subscribers to sign up for bundled DSL services that include voice telephone, and DSL will become the new "basic" phone service. But instead of basic phone service (e.g. local calling) costing about $25/month, "basic" service will include local, long distance, and broadband in a bundle costing $50-$60/month. Long distance will be thrown in for free, essentially, and the Bells plan to try to kill the long distance companies by doing so. And they will likely succeed.
The higher speed DSL services will also let the phone companies begin to offer cable TV programming, which will let them cut out their current TV providers, the satellite firms, killing another potential competitor.
In some markets where there is little or no competition from a cable company, we will be back to 1984, when you bought telecom services from Ma Bell, whether you liked it or not.
The cable companies, though, have most of the broadband marketshare already, so the phone companies, which are universally reviled for poor service, have a very difficult battle ahead of them. Current cable broadband service, though not as fast as some of the newer DSL flavors, is more reliable, and the cable companies already have excellent TV services, compared to the emerging DSL TV services. And phone service via cable modem is already available.
So the two competitors are will slug it out in the marketplace, and it may help keep prices down for a while. But in the short term, expect to see new DSL rollouts only in markets where cable competition is weak.
But the real problem with DSL is that it is a lousy technology. Based on trying to squeeze more capacity out of old copper cables, it has been tried in Japan and found lacking. Japanese users regard DSL as inferior, and the market there is being driven by fiber.
As the phone companies make big investments in new DSL equipment, they will be less and less inclined to do anything with fiber, which requires different cable plant and entirely different equipment. Finally, one huge problem with DSL is that it is distance-sensitive. The fastest ADSL2+, which can run as fast as 24 megabits/second, can only push those speeds about 3000 cable feet or only one-sixth the distance of "old" DSL, which can go about 18,000 cable feet.
What this means is that you may or may not get fast DSL in any given area, and the phone companies will continue to confuse legislators by playing the zip code game--which is to say, "We offer DSL in 95% of the zip codes in your area." That's literally true, but what they leave out is that perhaps only 50% of homes in a zip code may be within reach of DSL service. In rural areas, it could be much less.
So what are communities to do?
The "third way" is to invest in broadband infrastructure than can be used by service providers to deliver broadband. To sit by and let the cable-telephone duopoly determine what level of service is available and where it is available is to let your community's future be determined by a few corporate bean counters many states away from your community.