While these two forms of broadband directly compete in many cities, they are currently regulated in different ways. Phone companies are required to provide Internet service providers non-discriminatory access to their networks, while cable companies can pick and choose among ISPs.
There is an urban legend that these regulations have something to do with a nefarious plot by the cablecos and telcos to highjack Google results and steer customers to the provider’s preferred sites. This is not true, of course, and the issue is under what conditions independent ISPs can use DSL and cable plants to reach new customers.
Independent ISPs, of course, want to be able to serve customers across the cable company’s lines for a minimal price, but cable companies want to be able to continue dictating terms of such access as they see fit. Telcos would like the same degree of flexibility in their business models that cable companies have.
The public has two interests here, and they don’t necessarily harmonize all that well. On the one hand, we want the choice between DSL and cable Internet to as many homes as possible, which is to say, all of them. We want these services to continue improving over time, which would require the companies to buy more gear from Cisco and friends. And we want the prices low.
At the same time, we want to be able to use ISPs that are more competent and less restrictive than SBC and Comcast, and we want to be able to do that for a reasonable price.
So if we set public policy that cablecos and telcos are only allowed to sell use of their lines for basic packet switching, and that all ISP functions (assigning IP addresses, handling e-mail and Usenet, and providing DNS) have to be unbundled, their profit margin may not be enough to encourage them to buy lots of gear.
On the other hand, how much does it take?