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Report: Keep broadband in companies' hands

The broadband industry may be dominated by phone and cable companies, but that doesn't mean that the government needs to get involved, according to the Congressional Budget Office.

The U.S. broadband industry may be dominated by phone and cable companies, but that doesn't mean that the government needs to get involved, according to the Congressional Budget Office.

A CBO report released Thursday said the dominance of broadband service by cable companies and the Baby Bells does not diminish the overall consumer benefits. It concluded that the private sector is doing enough to boost the availability of broadband and that government subsidies for pushing the industry along would do more harm than good.

While the report pointed out that some regions in the United States still suffer from service hiccups or lack of broadband access, the private-sector providers will eventually find ways to serve these underrepresented communities.

"Many of the problems that remain, such as uneven distribution and availability of broadband, are a function of the market's immaturity and not necessarily permanent features," the report said.

The CBO added that the government does not need to provide subsidies to help boost the economic benefits surrounding broadband.

The report also concluded that:

• Broadband providers' investments over the last five years have helped boost the industry and drive customer demand;

• Households and businesses are still getting plenty of choices from smaller service providers, despite the market share dominance by the Baby Bells and cable companies;

• Bundled offerings and recent digital subscriber line discounts point to signs of an impending price war with cable.