Wireless

Legacy regulation killed Google Voice

Reacting to Apple’s decision to not allow Google Voice for the iPhone, Wall Street Journal guest columnist Andy Kessler complains, It wouldn’t be so bad if we were just overpaying for our mobile plans. Americans are used to that–see mail, milk and medicine. But it’s inexcusable that new, feature-rich and productive applications like Google Voice are being held back, just to prop up AT&T while we wait for it to transition away from its legacy of voice communications. How many productive apps beyond Google Voice are waiting in the wings? So Kessler proposes a “national data plan.” Before we get to that, Kessler complains that margins in AT&T’s cellphone unit are an “embarrassingly” high 25%. He doesn’t point out that Read More ›

‘Special access’ shouldn’t be fixed

George S. Ford and Lawrence J. Spiwak at the Phoenix Center conclude in a new paper that government intervention is not warranted in the market for special access services purchased by businesses and institutions (which I discussed most recently here). They note that the rates of return a prominent study estimated AT&T, Qwest and Verizon are currently earning either are similar to or less than the rates of return these companies used to earn when the market was fully regulated. NRRI bases this analysis on ARMIS rates of return, a perplexing approach once one calculates ARMIS rates of return from the period in which all special access services were price regulated. In 1999, for example, the average rate of return Read More ›

Don’t believe ‘special access’ hype

A new coalition, NoChokePoints, has been formed to lobby Congress and the Federal Communications Commission to further regulate the prices that incumbent telephone companies (Regional Bell Operating Companies or Incumbent Local Exchange Carriers) can charge for special access services purchased by businesses and institutions. Special access circuits are dedicated, private lines. For example, Sprint purchases special access circuits to connect its cell towers to its backbone. According to a coalition spokeswoman, Huge companies like Verizon and AT&T control the broadband lines of almost every business in the United States. The virtually unchallenged, exclusive control of these lines costs businesses and consumers more than $10 billion annually and generates a profit margin of more than 100 percent for the controlling phone Read More ›

Exclusivity inspired Smart Phones

Small cellphone operators want Congress or the Federal Communications Commission to prohibit larger carriers from becoming exclusive providers of popular handsets, like the Apple iPhone (AT&T), Blackberry Storm (Verizon Wireless), Palm Pre (Sprint) and Samsung Behold (T-Mobile). John E. Rooney, President and CEO of United States Cellular Corp., testified at a Senate Commerce Committee hearing this week: These arrangements harm consumers in rural areas and decrease competition nationwide and do not enhance innovation. Let’s examine these arguments. Rural Consumers Rooney bemoans the fact that many rural residents of Alaska, Arizona, Colorado, Idaho, Kansas, Maine, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, South Dakota, Utah, West Virginia and Wyoming are not served by AT&T network facilities while Victor H. Read More ›

Events overtaking net neutrality

The conventional Beltway wisdom would be that net neutrality legislation should have a real chance now with the election of President-Elect Obama and strengthened Democratic majorities in the Senate and House. But there are two recent developments which make the case for net neutrality regulation less compelling. Free Airwaves The Federal Communications Commission approved the use of unlicensed wireless devices to operate in broadcast television spectrum on a secondary basis at locations where that spectrum is open, i.e., the television “white spaces.” In other words, a vast amount of spectrum will soon be available to provide broadband data and other services, and the spectrum will be free. George Mason University Professor Thomas W. Hazlett notes that [S]ome 250 million mobile Read More ›

One in five households could be wireless-only

Nielsen reports that 20 million U.S. households no longer have fixed-line phone service and rely solely on cell phones. By the end of this year, one in five households could be wireless-only. ‘Landline wireless substitution may just be the start,’ says LeBreton. ‘As wireless data networks improve and speeds become more and more competitive with broadband, some consumers may cut the Internet cord, as well, favoring wireless data cards and other access through carrier networks.’

Google’s bids

Communications Daily ($) cited my recent post comparing Google’s limited objectives for the 700 MHz auction with the expansive objectives it outlined to the Federal Communications Commission last summer, and it included the following reaction to my comments from Richard Whitt of Google: Whitt said in response that Haney had misread his company’s comments from last summer. “We consistently have argued that the open access license conditions adopted by the FCC would inject much-needed competition into the wireless apps and handset sectors, but would not by themselves lead to new wireless networks,” he said Monday. “Only if the commission had adopted the interconnection and resale license conditions we also had suggested — which the agency ultimately did not do — Read More ›

Back to spectrum giveaways

In 1993 Congress substituted auctions for the deplorable practice of giving away valuable spectrum to well-connected commercial entities. Lawmakers who think spectrum is a valuable public resource for which the taxpayers should be compensated need to wake up for a minute. FCC rulemaking could render the remaining assets worthless, distort wireless competition and contribute to the unfortunate perception of the FCC as a candy store. Google has made it clear that it plans to weigh in at the FCC as it determines how to re-auction the D-block from the recent 700 MHz auction, and that it wants to open the white spaces between channels 2 and 51 on the TV dial for unlicensed broadband services. Anna-Maria Kovacs, a regulatory analyst, Read More ›

What’s up, Walt?

I enjoy Walt Mossberg’s Wall Street Journal personal technology reviews as much as the next person, but his latest jeremiad against U.S. mobile phone companies is way off the mark. Mossberg calls the mobile carriers “Soviet ministries” because they offer two-year service contracts, lock their phones during this contract period, and generally take a “walled garden” approach to content. But the facts of the U.S. wireless industry are striking: — Ours is the most competitive wireless market in the world, with the top two players accounting for just 51.5% of subscribers. Some of us wouldn’t mind if our market were more concentrated. — Prices have fallen some 85% since 1994, from around $.46 per minute to $.07 per minute. — Read More ›