I didn't need to read this article to know why. I watched it happen.

My first company sold web caching proxy hardware and software support (all Open Source based on Squid). 95% of my customers for the first several years of operation were independent ISPs. I had maybe 200 of them as customers in the 7 years the company existed, many became friends. When "deregulation" took place in the telephone, cable, and broadband market...at the beginning of the DSL/cable Internet revolution, the last mile became impossible to bridge for ISPs without an agreement with either a telco or cable operator (before that modems could call across the country without any explicit involvement of the telco...though higher speed modems did require data center presence at the telco level). The government required telcos and cable operators to resell the last mile to independent service providers at a fair rate; they were supposed to charge the same thing it cost them to provide the service to their own broadband divisions.

So, independent ISPs were offered a DSL link to their customer for, say, $23.50 per month, which is what the telco says it costs them to build/maintain that DSL link and make a modest profit. Great, right? Problem is, whenever ISPs tried to setup a DSL link, the telco would drag their feet. They would take months to deploy service for an independent, or claim they didn't have the hardware in place for that customer, or screw up the installation several times. But, that was just the beginning. The telcos would also send out mailers to those very same customers, offering DSL internet at special introductory prices...$19.95/month, for instance. Yeah, cheaper than the base cost for the line they're charging independents (which doesn't include all the other stuff an ISP has to provide). And, despite having told those customers they couldn't get DSL or having experienced months of delays, the moment the customer called up the telco, DSL would be up and running within a couple of days.

I'd been hearing about it from my customers, and then I had it happen to me. I tried two different independents...they worked hard to get me service, and finally gave up, apologizing for the inability to deliver. After 6 months of delays, I received one of those mailers from the telco. I called the telco, and had DSL a few days later. Same circuit they'd refused to install service on as recently as a month before.

When I started my first company, there were thousands of independent ISPs. Some of them were really good. Some of them were really successful. Most of them died during the switch to broadband. It wasn't an accident. They were killed off by the old monopolies, and our regulators were complicit in the process.

I'm not arguing for more regulation, really, but when the only way to get to your customer is through a state-enforced monopoly, the state better do their damned job. Or, we end up with the mess we have today: Among the worst Internet service at the highest prices in the modern world. How is that allowed to happen in the nation that invented the Internet?

All the arguments about distance and density are moot when talking about major cities; San Francisco is very dense. There's not reason for broadband to cost $99 for reasonable speeds, when it costs a third that for more bandwidth in a couple dozen other nations, including places that are less dense.

This process didn't kill my company directly (I was able to pivot successfully to serving enterprise, education, and government customers, and I had my best year the last year it was in operation), but it made it so un-fun that I didn't want to do it anymore. The kind of people I wanted to work with were no longer in the business. The smart ones sold out to bigger companies, the stubborn ones clung desperately to their dialup business or spent all their money trying to go to WiMax and bypass the telcos. Almost none of them survived as independent ISPs.

Some of the bigger ones brought lawsuits against the telcos. I don't know what became of them, but the companies that did it are mostly gone, so I guess we know how it turned out.