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The Podium

Wednesday, December 07

The Lay of the Wireless Land

By Brad

In a piece for the Wall Street Journal, Holman Jenkins looks at the recent spectrum deal between Verizon and Comcast and what it reveals about the current state of competition in the wireless industry:

How many wireless competitors are too many?
The Federal Communications Commissions thinks we have too few, though most Americans have a choice of five, and that’s one or two more than most advanced countries find they need.
In reality, the problem isn’t too little competition, but not enough revenue to pay for the rapidly growing amounts of bandwidth customers are using. Raising prices and throttling users isn’t working, so the only solution is to cram more and more paying customers onto the network. Even AT&T and Verizon are desperate for more customers, never mind congestion, because that’s the only way they can generate revenues to cover the needed investment.

Later in the article, Jenkins tackles the FCC’s efforts to stop the AT&T and T-Mobile merger:

The FCC opposes a proposed tie-up of AT&T and T-Mobile precisely because agency seers and planners prefer an alternative scenario in which T-Mobile and cable join to build their own 4G network. That’s not gonna happen, for all the reasons Shaw suggests.

Comcast and friends didn’t sell their 4G spectrum to Verizon because they think running a 4G network is a license to print oligopoly profits, as the FCC apparently does. In blocking the T-Mobile acquisition, Washington cites a looming Verizon-AT&T duopoly. The truth is, with its own deal, Verizon leaps so far ahead that it’s becoming Verizon versus a distantly trailing pack.

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