U.S. Not behind on Wireless Broadband

January 26, 2009

Lost in the crush of news of late, was the latest FCC report on wireless competition, which shows that the U.S. is leading the world in mobile broadband and wireless competition.

  • This is especially relevant to the net neutrality/open Internet debate because:
    • the main justification for new net regulation is that there is insufficient competition, and
    • eBay is expected to revive its previously-rejected Skype petition mandating “Carterfone” net neutrality regulations on wireless competitors.
  • The FCC report not only proves the U.S. is the most competitive wireless market in the world but also that “wireless technology is increasingly being used to provide a range of mobile broadband services.” (p.5)
  • The FCC report “finds that U.S. consumers continue to reap significant benefits — including low prices, new technologies, improved service quality, and choice among providers” from wireless competition. (p.5)

On deployment/penetration:

  • “Mobile Internet pentration is higher in the United States (15.6 percent of wireless sbscribers) than in Western European countries.” The U.S. also passed Japan in 2007 in mobile penetration. (p.10)
  • The FCC report found ~95% of Americans enjoy at least three wireless competitors and ~60% enjoy at least five.

On competition and prices:

  • The FCC report concluded that: “No single competitor has a dominant share of the market.” (p.6)
  • U.S. wireless prices were 6 cents per minute prices vs. 20 cents in Europe and 26 cents in Japan. (p.10)

On wireless usage:

  • The result of much lower wireless prices in U.S. means “U.S. mobile subscribers lead the world in average voice usage by a wide margin...”

Moreover, the report also showed why wireless will continue to compete directly with wireline broadband (cable modems and DSL) because so many people highly value mobility and are willing to sacrifice speed for the convenience of mobility.

  • The FCC report showed 14.5% of all U.S. households have substituted wireless service for wireline service and almost a third of younger adults 18-29 have substituted wireless for wireline service.
  • The FCC’s latest broadband report confirmed this trend of wireless competition migrating to broadband in that wireless broadband was both relatively and absolutely the fastest growing segment of broadband in the U.S.

Bottom line: Wireless and broadband competition in the U.S. is succeeding and is more more robust here than in any other nation in the world.

  • To the extent U.S. law, policy and regulation are driven by official facts like those in the latest FCC reports, net neutrality proponents will find it difficult to justify why net neutrality regulation will do a better job serving consumers’ interests than existing competition policy.
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