> If someone else comes in and is able to radically undercut their costs at $600 million while simultaneously winning 50% of the market, both companies would still only make $500 million and lose money.

Emphasis added. This is not what "able to undercut" means to me. Furthermore, the situation described is great for consumers.

And yeah, it looks like Comcast has low-ish margins, for a monopoly:

http://ycharts.com/companies/CMCSA/profit_margin

But they also have nation-wide monopoly and revenue, so 10% of that is "a lot."