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Voting with dollars: American Wireless Consumers Pay Much Less, Use Much More than Other Countries

Kudos to Steve Pociask of the American Consumer Institute for his research reminding regulators that American consumers enjoy the most competitive, useful, and innovative wireless market in the world.

In reviewing the stats that matter most, the U.S. is far ahead of the rest of the world.

  • Americans use 600 more wireless minutes a month than the average OECD country, which is 2-5 times more usage to put it in perspective.
  • Americans also pay 10 cents per minute less than the average European does.

We constantly hear from anti-competition forces that competition doesn't work.

  • The evidence that they are dead wrong is overwhelming.
  • Competition works!

     

     

     

Special access facts show more not less competition

Pat Brogan of USTelecom and Evan Leo of Kellog Huber have produced an outstanding new report on special access that is the single best and most up-to-date survey and analysis of publicly available information on the status of competition in the special access market. 

Special Access Nostalgia for Telecom's Bronze Age is No Path to 21st Century Broadband Leadership

The supreme irony of the special access* issue is that competitors, who want to avoid investing in next generation broadband access facilities, are demanding that the FCC... (whose top priority is a National Broadband Plan to encourage the rapid build-out of modern broadband facilities to all Americans) ...regulate copper access prices in a way that surely would discourage investment in the exact next generation facilities that the FCC wants to get built.

  • * "Special access" is basically the business-to-business leasing market of the copper wire connections that link many buildings and cell towers to the Internet backbone at DS1 (1.5 Mbs) and DS3 (44.7 Mbs) speeds.
  • Bronze is 90% copper and 10% tin.

DOJ will find vibrant competition in reviewing telecom industry

The DOJ has opened an initial review of the telecom industry, per WSJ reports, as part of the Obama Administration's and the Varney Antitrust Division's "aggressive stance on antitrust enforcement."

Antitrust enforcement is fact-driven, since it ultimately must be proven in court. The competitive facts in the telecom industry will speak for themselves; the industry is clearly and overtly competitive and trending more competitive. 

This review will not be difficult or take long since the DOJ has vast and deep experience with the U.S. telecom industry -- having overseen the AT&T Consent Decree 1984-1996, been intimately involved with the drafting and implementation of the 1996 Telecom Act including the detailed development of local competition and Bell entry into long distrance. The DOJ also has reviewed and approved a number of telecom mergers over the last several years, most recently the approval of Verizon-Alltel and Centurytel and Embarq.

  • It is important to note that the scrutiny standard of approving a merger is a dramatically tougher standard than that of a Sherman antitrust action.
  • Generally as a rule of thumb, the DOJ prevents proposed mergers that would create combined market share of over 30%, while the market share standard to prove a Sherman antitrust case generally requires at least a 50% share and more likely 70-90% share.    

Moreover, the DOJ will examine the telecom marketplace to see if it exhibits the core characteristics of a competitive market:

Handset Exclusives Drive Growth & Broadband Adoption -- Why regulate tech/computer sales?

Handset marketing exclusives are a pro-competitive wellspring of wireless growth and broadband adoption. Marketing exclusives are also a legitimate, proven and widespread marketing practice that marshals maximum marketing resources for selected, potentially-hot-new-products in order to drive maximum sales and adoption.

What If Columbo Investigated Special Access?

A new coalition of some struggling broadband competitors, NoChokePoints.org, is making claims that the "special access" market is being "choked" by lack of competition and is urging the FCC to reverse course and regulate lower prices for these competitors.

  • "Special access" is basically the business-to-business leasing market of the copper wire connections that link many buildings and cell towers to the Internet backbone at DS1 (1.5 Mbs) and DS3 (44.7 Mbs) speeds.

To solve this controversy and determine who is actually "choking," or holding up whom, I thought it would be instructive and interesting to consider how the beloved TV detective Columbo would apply his common sense questioning to get to the bottom of this whodunit.

Competition Works! New data shows U.S. wireless market most competitive in OECD by far

The latest wireless statistics submitted to the FCC today show that the U.S. leads the OECD in wireless competition, use and price; the U.S. is not falling behind.

  • These data show why:
    • Monopoly net neutrality regulations are unnecessary;
    • The U.S. leads the world in wireless broadband adoption and use; and
    • Broadband mobility is as important as broadband speed to U.S. consumers.  

The CTIA study is based on Merrill Lynch's research of OECD data. Please read the report's summary findings below:  

"The price per minute of service in the United States is the lowest of the 26 OECD countries tracked by Merrill Lynch.

Consumers in the United States have the highest minutes of use per month of the 26 OECD countries tracked by Merrill Lynch.

The Data Show Competition Works! Building Upon a Strong Broadband Foundation -- Part II

First quarter financial results prove that the success of the broadband sector's facilities-based competition, is an exceptionally strong foundation on which to build a National Broadband Strategy.  (See 1Q09 results: AT&T, Verizon, Comcast and Time Warner Cable, companies are listed by revenue size.) The results show:

FreePress Concedes Broadband Is Not A Duopoly

FreePress in petitioning the FCC to apply its Broadband Principles to wireless (because they currently do not apply to wireless) effectively has conceded that broadband is not the duopoly market they have long alleged, but is a competitive marketplace.

Skype's Anti-competitive Uneconomics

There are two primary problems with eBay-Skype's attempt to get the Government to force competitive wireless providers to carry Skype's free communications app under the guise of wireless net neutrality and Internet openness; first, it is wildly uneconomic, and second, it is anti-competitive.  

  • The issue has surfaced in the news (USAToday, WSJ) as Apple enabled a Skype app on the iphone for use on free public WiFi networks, but not on the iphone's commercial network provided by AT&T; and again when Google's Android banned a tethering app because it violated T-Mobile's terms of service as reported by CNET.  

I.  Skype's .2% Uneconomics

What is uneconomics? Just what the term implies, not economic, unsustainable... arbitrage.

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Q&A One Pager Debunking Net Neutrality Myths