Examining ISP monopolies in the U.S.: How antitrust laws fail to curb market dominance, with case studies on pricing, infrastructure, and regulatory gaps

ISP Monopolies in America: Antitrust Failures and the Crisis of Digital Inequality

Published February 13, 2025 | Digital Rights, Antitrust Law, Telecommunications

Key Takeaways

• 83 million Americans face broadband monopolies, with 49.7 million having only one ISP option [citation:8][citation:1]
• U.S. broadband prices are 2-3x higher than France/S. Korea due to weak antitrust enforcement [citation:1]
• FCC's 2022 ruling against exclusive ISP-landlord contracts remains partially unimplemented [citation:5]
• Supreme Court precedents (e.g., Verizon v. Trinko) enable monopolistic behaviors [citation:4]

The Monopolistic Landscape of U.S. Broadband

Internet Service Providers (ISPs) in the U.S. operate as de facto monopolies, particularly in rural and low-income urban areas. A 2020 ILSR study found 68% of Americans lack meaningful ISP choice, with prices 38% higher in monopoly markets versus competitive ones [citation:8]. This structural failure stems from:

1. Infrastructure Gatekeeping

Telecom giants like Comcast and Charter exploit natural monopoly dynamics:

• Upfront costs for fiber deployment: $20,000-$50,000 per mile [citation:1]
• 19 states ban municipal broadband networks under ISP lobbying [citation:1]
• Exclusive "sale-and-leaseback" wiring deals in 32% of apartments [citation:5]

Case Study: New York City's Failed FiOS Promise

In 2008, Verizon secured a NYC contract to break Time Warner's monopoly by installing FiOS fiber. By 2015:

• 25% of residential blocks lacked FiOS access
• 20% of New Yorkers remained offline
• Prices rose 22% above national average [citation:1]

Legal Framework: How ISPs Circumvent Antitrust Laws

The Sherman Act (1890) & Modern Enforcement Gaps

Section 2 prohibits monopolization, yet ISPs exploit three loopholes:

Law	ISP Tactic	Case Example
Sherman Act §2	Refusal to lease "last mile" infrastructure	Verizon v. Trinko (2003) [citation:4]
Clayton Act §7	Strategic mergers (e.g., Charter-Time Warner 2016)	DOJ approved despite 25M customer overlap [citation:7]
FTC Act §5	Misleading "up to" speed claims	2019 FTC v. AT&T ($60M fine) [citation:3]

The Consumer Welfare Standard Failure

U.S. courts require proof of direct consumer harm, unlike the EU's "abuse of dominance" standard [citation:4]. Result:

• ISPs avoid liability unless prices spike abruptly
• Quality degradation (e.g., data caps) isn't actionable
• 2023 FTC lost 89% of merger challenges [citation:4]

Policy Solutions & Regulatory Pathways

1. Revive Common Carrier Classification

The 2015 Open Internet Order (Title II) reduced monopoly abuse by:

• Banning paid prioritization
• Requiring infrastructure sharing
• 2017 repeal enabled 14% price hikes [citation:6]

2. Municipal Broadband Expansion

Chattanooga's EPB model shows success:

• 10Gbps for $299/month vs Comcast's 2Gbps/$299
• Created 9,200 local jobs [citation:8]

3. FTC/FCC Coordination

2022 FCC proposals to:

• Ban graduated revenue-sharing with landlords [citation:5]
• Mandate plain-language marketing disclosures
• Block "dark fiber" warehousing tactics

Conclusion: A Crossroads for Digital Equity

The ISP monopoly crisis exemplifies systemic antitrust enforcement failures. Without adopting EU-style dominance rules [citation:4] and reviving New Deal-era infrastructure policies [citation:1], the U.S. risks deepening its digital divide. Immediate steps:

1. Pass federal laws overriding state municipal broadband bans
2. Apply Sherman Act §2 to mandate last-mile leasing
3. Appoint FCC commissioners committed to Title II restoration

Further Reading

• Vox: America’s Monopoly Problem (2020)
• Ars Technica on FCC's 2022 ISP Reforms
• EU vs US Antitrust Standards (2024)