Independent ISPs Cannot "Move the Needle"

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Without disparaging the hundreds--perhaps several thousand--small, independent telcos and Internet service providers operating across the United States, all those providers together serve a very-small percentage of total U.S. Internet access customers.

According to Leichtman Research Group, just 14 of the largest cable and telephone providers in the United States represent about 95 percent of all the customers, or about 91.9 million accounts. That implies a total market of about 96.7 million consumer Internet access accounts.

In other words, all other providers but the top 14--representing more than a thousand or two thousand suppliers--serve 4.8 million customers.

The satellite broadband suppliers are fairly significant in that regard. Dish Network serves perhaps 600,000 customers. Exede might have 696,000 subscribers. HughesNet has more than one million customers. So three satellite broadband suppliers have about 2.3 million customers.

That implies that all other thousand or two thousand ISPs serve just about 2.5 million customers.

So if you want to know what moves the market, it is the cable TV companies and telcos. The satellite broadband providers are among the largest “non-telco or non-cable” providers.

Even Google Fiber might have only several hundred thousand customer accounts.

The big point is that no matter what all the independent suppliers do, they cannot “move the needle.” There simply are not enough accounts to affect national statistics (speed, average price, subscriber counts).....yet.

Nobody knows what might happen in the future. Might new providers begin to take serious market share. It always is possible. But some of us would not be surprised if a national ceiling of about 20 percent share is theoretically capable of shifting, mostly at the expense of telco ISPs.

That might represent about seven million accounts. So there might be lots of gigabit access providers, eventually. What still seems unclear is how many customers those suppliers will serve.

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