Sunday, July 20, 2008

U.S. Wireless: Cutting Edge or Inferior?

The FCC’s 12th Annual Report to Congress on the Commercial Mobile Radio Service offers an unconditionally upbeat assessment of the wireless marketplace in the United States. See From start to finish, the Report contains summary conclusions that leave no doubt that “U.S. consumers continue to reap significant benefits – including low prices, new technologies, improved service quality, and choice among providers” (¶1) and they “continue to benefit from effective competition in the CMRS marketplace.” (¶290).

Has the FCC made a fair-minded and truthful assessment, or made yet another deliberate overstatement?

If the wireless marketplace has unquestionable characteristics such as robust facilities-based competition, then it follows that U.S. wireless consumers should benefit from best in class innovation and other dividends. Economists have convinced me that competitive necessity forces competitors to spend sleepless afternoons sharpening their pencils and marking down prices even as they work overtime thinking about how to capture market share by enhancing the value proposition of their service.

So if I’m supposed to join in a wireless lovefest here how could the Economist (July 12th edition), not known for false reporting, come up with a far less sanguine assessment in the context of Apple’s introducing a 3G iPhone:

PITY us poor mobile-phone users in America. While the rest of the world enjoys network speeds that let people watch television on the move, surf the mobile web in its living glory, download videos in a trice, or exchange video messages with one another, we celebrate Apple’s launch of its iPhone 3G today as if were some great leap for mankind. (available at:

The Economist article mentions that the iPhone offers bitrate speeds in the 400-700 kilobits per second (“kbps”) range, throughput that hardly constitutes broadband except in the United States where the FCC still uses a 200 kbps threshold. Wall Street Journal columnist Walt Mossburg calculated the 3G iPhone bitrates at not terribly blazing 200-500 kbps, still an improvement over 70-150 kbps on AT&T’s old EDGE network.. See

I agree that wireless throughput offers only one benchmark for a reality-based assessment U.S. wireless performance. But for this criterion even the next best thing, using the best network available, does not come close to showing global best practices, or event true 3G performance.

I have no doubt that the FCC’s bogus broadband assessments include terrestrial wireless carriers in the Commission’s numerical count of broadband providers. But credible assessments show that U.S. 2.5G networks do not meet even the 200 kbps broadband threshold and current 3G networks do not match DSL speeds.

So much for the FCC’s undisciplined shout out to the wireless industry.