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Democracy & Technology Blog Duopoly shumopoly

Broadband regulation is justified — according to Lawrence E. Strickling, who is the Assistant Secretary of Commerce for Communications and Information — because a recent FCC report indicates that “[a]t most 2 providers of fixed broadband services will pass most homes. Furthermore, “50-80% of homes may get speeds they need only from one provider.”
Christine A. Varney, the Assistant Attorney General for Antitrust concurs, noting

It is premature to predict whether the wireless broadband firms will be able to discipline the behavior of the established wireline providers, but early developments are mildly encouraging.

These comments essentially parrot the views of some left-wing advocacy groups who are trying to engineer a revolution in communications policy, such as Free Press and Public Knowledge.

According to Public Knowledge, for example,

While wireless remains a possible source of platform-based competition, it remains unclear whether these services genuinely compete with wireline providers. At present, it would appear that most consumers regard wireless “broadband” through their CMRS handsets as a complimentary service to their wireline broadband connection, not as a substitute.

Is that a denial, or is that a “non-denial denial?” The advocacy groups and their allies in the Obama Administration have a problem. The facts do not support their radical views.
The Pew Internet & American Life Project found that 55% of American adults connect to the Internet wirelessly. Oops!
According to 16 civil rights, professional, service and elected officials’ organizations,

wireless broadband has been a real success story for minorities … Among all groups, wireless broadband might be most important to Hispanic Americans. Hispanic Americans “are among the most avid users of mobile broadband …. According to one study, African-Americans are the most active users of the mobile Internet — and their use of it is also growing the fastest. This means the digitsl divide between African Americans and white Americans diminishes when mobile use is taken into account. The statistics from this study show that while only 33% of White Americans have used a mobile device to go online, 58% of African Americans have. Similarly, while only 19% of all Americans use mobile devices to access the Internet on an average day, 29% of African Americans do ….Commenting on this wireless success story, [FCC] Commissioner Clyburn has remarked that “[w]ireless adoption — the use of handheld, mobile devices among African Americans is off the charts. (footnotes omitted.)

Since wireless broadband is regarded as a substitute to wireline broadband by a significant number of consumers, contrary to the uninformed claims of Free Press and Public Knowledge, the market cannot be dismissed as a dastardly “duopoly.” These are just the rantings of regulatory enthusiasts. There is no compelling justification for a government takeover of broadband based on theories of limited competition.

Hance Haney

Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.