Wireline vs. Wireless Broadband: Alternative or Complementary Technologies?

            If a market has many facilities-based competitors, the justification for regulatory oversight abates and the invisible hand of the marketplace can do wonder for consumers.  Few would disagree with that premise.

            The problem lies in whether competition exists right now, not something hypothetical, or prospective.  Sponsored economists, serving incumbent carriers, have long argued that regulators should start disbanding on the prospects of future, “contestable markets,” because the process of disengaging may take a long time.

            I prefer to see quantifiable, empirical evidence that competitors, operating their own installed networks, seek to serve the same consumer population right now.  FCC Chairman Ajit Pai has a more liberal standard leading to an unequivocal conclusion that wireless and wireline network operators robustly compete already.  Having reached that conclusion, it then follows that the FCC can announce “Mission Accomplished” and proceed to eliminate any and all regulatory safeguards in place to remedy, or abate market shortcomings.

            Is the broadband marketplace robustly competitive?  Do consumers readily and frequently choose between and among wireless and wireline broadband carriers?  Here’s my litmus test: when broadband consumers cut the wireline cord at home and rely solely on their “unlimited” wireless subscriptions, we will have reached the Promised Land.  Put another way, wireless and wireline technologies will compete as “functional equivalents” when consumers shut down their Wi-Fi wireless routers at home and remove smartphone instructions to look for and switch to Wi-Fi networks.  Why bother if the wireless subscription provides the same bit rate, data allowance and performance?

            Just now, who other than sponsored researchers and FCC Commissioners believe that wireless networks offer the same bitrate, data allowance and performance as wireline networks?  These two technologies complement and augment, rather than offer a substitute. 

            If you don’t believe me, consider what the wireless carriers write in their service contracts. The transmission bit rate—even for 4G service--does not match wireline speeds.  Wireless carriers warn that even advertised transmission speeds may decline under real world demand. Even so called unlimited wireless plans have soft usage caps triggering throttled 2G service when a power user requires service from a congested tower, or simply exceeds a 20-30 Gigabyte cap. Wireline broadband service typically has no cap and in markets where carriers like Comcast have introduced caps, the allowance ranges up to 1 Terabyte (1000 Gigabytes). Bear in mind that wireless carriers throttle video streams, because their networks cannot operate as robustly as wireline networks having no such limitation.

            Yet again, I am reminded that there are lies, damn lies and statistics.  But now even the statistics can be falsified to support a party line.

Seven Questions About Wireless Carrier Throttling of All Video Streams

            Verizon has joined the ranks of wireless carriers in the U.S. that degrade video screen resolution even if nearby tower congestion has not occurred.  See https://gizmodo.com/verizon-will-totally-start-throttling-customers-video-t-1798302947.  Here are some questions that come to mind:

1)         If ISPs have a lawful claim to First Amendment speaker status, do content providers have a similar, or stronger freedom of expression link when ISPs purposefully distort and degrade the high definition video feed they receive and deliver in standard definition or worse to broadband subscribers?

2)         When, if ever, can an ISP invoke reasonable network management as justification for continuous and deliberate throttling of video traffic even when congestion has not occurred?

3)         Should the FCC impose the same no meddling/no degradation of “must carry” content Congress mandated the Commission establish for cable television operators?

4)         While arguably consumers may not see perceive much video presentation degradation on their smartphone screens, will many wireless broadband subscribers in the future try to “sling” video content from handsets to television sets where the degradation would appear significant?

5)         Is service pricing on the basis of video screen resolution much the same as tiering on the basis of bit transmission speed, or monthly data allowances?

6)         Do wireless carriers give with one hand and take with the other when offering conditionally “unlimited” service subject to standardized throttling of video traffic?  Is this reasonable marketing and puffery, or a deceptive business practice?

7)         Do wireless carriers intentionally, or inadvertently bolster the video on demand market share held by cable television operators when offering inferior screen resolution?

            In a future post, I will provide answers, but for now I would appreciate your thoughts.