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Emerging U.S. Wireless Broadband Markets

The views and opinions expressed in this submission are solely those of the authors and do not represent the views of the Department of Justice.

Slide 1

Emerging U.S. Wireless Broadband Markets

Thomas W. Hazlett
Professor of Law & Economics

George Mason University logo

thazlett@gmu.edu

U.S. Department of Justice
Antitrust Division Symposium
Nov. 29, 2007

Slide 2

Multi-Dimensional Convergence

  • Voice and Data Networks
  • Fixed and Wireless Networks

Slide 3

Cable Modem v. DSL Subscribers 1999-2002 (U.S. Residential)

Graph showing the increases in ADSL subscribers and in cable modem subscribers from December 1999 through December 2002 in six month intervals

[D]

Slide 4

Broadband Race Past 1Q2003 DSL Deregulation

Graph showing increases in cable modem and DSL subscriptions by quarter from the first quarter of 1999 through the third quarter of 2006

[D]

Slide 5

Wireless: the “Third Pipe”?

Slide 6

U.S. Wireless Voice and Data
($ billion annual revenues, 2005-2011)

Graph showing annual revenues (in billions of dollars) for wireless voice and data in the United States from 2005 to 2011

[D]

Source: Telecommunications Industry Association (12.06)

Slide 7

Key Wireless Data Players

  • Mobile voice networks
    • AT&T, VZW, Sprint, T-Mobile
      • spectrum dearth → consolidation (from six)
      • EV-DO v. wCDMA (the rivalry that saved the EU)
      • Regional carriers Alltel, Leap, MetroPCS
    • network sharing → Blackberry, OnStar, iPhone, Virgin Mobile, Twitter
  • ‘Pure play’ entrants
    • Clearwire, Digital Bridge
    • Frontline via 700 MHz?

Slide 8

More Key Players

  • Other entrants
    • Cable ops (SpectrumCo’s 20 MHz via AWS)
    • Satellite TV ops (no terrestrial spectrum yet)
  • Application providers
    • Google, Microsoft, Apple…

Slide 9

Regulation

  • Examine mobile markets globally
  • Retail prices decline with
    • spectrum
    • more spectrum
    • competition
      • more spectrum creates more competition
      • deregulation creates more spectrum

Slide 10

Success of Liberalization

  • Granting licensees flexible spectrum use
    • rather than rigidly defining services, technologies, business models
  • Cellular licenses in USA
    • complex spectrum sharing and investment
    • innovation in technology and bus models
  • Property rights in Australia, Guatemala
    • reduces barriers to entry

Slide 11

“[W]orld's leading market showcase for wireless data”

“Sydney ‘has become the world's leading market showcase for wireless data services,’ says… U.S. technology research Gartner in Australia… [A] reason wireless broadband is taking off here: The government sold off radio spectrum for such services relatively cheaply. Privately held Personal Broadband snapped up its license in 2001 for only about US$7.5 million.”

-- Wall Street Journal (2.18.05)

Slide 12

USA Policy

  • Positive → deregulation of select licenses
    • Cellular, AWS, 2.5 GHz (BRS)
  • Negative → regulatory lags
    • 2G license delay
    • 3G license delay
    • fling with unlicensed (TV Band, 3.65 GHz)
      • Muni WiFi and the rise of the term “over-hype”
    • flirting with re-regulation (700 MHz)

Slide 13

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May 3, 2002

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Updated December 29, 2023