If governments stopped chasing the enormous amount of cash generated by bidding wars for wireless spectrum, more players could gain access to it. Simple premise, simple benefits. A cheaper price tag means less risk too. And, a more diverse collection of offerings for various consumer and business markets would spring into the market, presumably.
“Mobility is defining telecommunications going forward,” said Rod Ullens, CEO at VoIP number provider Voxbone. “But the regulatory attitude towards spectrum is hampering innovation and competition.”
Consider the 700MHz spectrum auction in the United States in 2008. While the goal was to establish a competitive nationwide carrier that could take on the hegemony of AT&T Inc. and Verizon Wireless, ultimately those two incumbents ended up the big winners, having the money to outbid everyone else. “Telecom is all about regulation,” Ullens contends. “Who wins the competitive battle boils down to who has won the regulatory ones.”
In fact, there are just four main facilities-based nationwide carriers in the U.S. The FCC has finally come to that realization (newsflash?), and in late August launched an official enquiry into the state of competition in the domestic wireless industry.
At issue is whether the control that Verizon Wireless, AT&T, Sprint Nextel Corp. and T-Mobile USA is consolidated enough to negatively impact consumer choice and fair pricing. Senator Herb Kohl, chairman of the Senate Judiciary subcommittee on antitrust, says together they own 90 percent of the market.
Ullens argues that if spectrum were cheap enough for any provider to snag a bit of it, consumer choice would naturally explode, ending the almost monopolistic state of affairs we deal with today. He likens it to the CLEC model on the wireline side: “It’s easy to be a CLEC,” he said. “You sign up, pay some, but not a huge amount of money and get interconnected, and you’re in business.”
It’s a well-worn idea of letting those that “want to address niches are able to just that,” he added. And ultimately, that’s been good for consumers – and a good check to incumbents, who have been forced to consider a range of new-entrant threats on the wireline side. Result: a range of really innovative blended services and the snowballing embrace of IP and network migration, which translates into a proverbial rising tide. However, “that’s a model that wireless regulation prevents, because spectrum is prohibitively expensive,” noted Ullens.
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Wireless Competition a Sham?
Source: xchange
Date: 09/28/2009
