I was doing
well on my self-imposed moratorium from correcting the frequent intentional and
unintended mistakes in Wall Street Journal
articles on telecommunications and the Internet.
Then along came Holman Jenkins’ whoppers in the Wed. July
31, 2019 edition: Faster Wireless vs. the
Swamp; https://www.wsj.com/articles/faster-wireless-vs-the-swamp-11564527042
Mr. Jenkins
recently lambasted the government’s antitrust challenge to AT&T’s
acquisition of Time Warner and today he mocks any benefit derived from having 4
instead of 3 facilities-based, wireless broadband carriers. Anyone who thinks consumers and wireless competition
benefit from 4 carriers has a number “fetish.” He seems pleased by a Sprint
exit, particularly given the low odds he calculates for a Charlie Ergen-managed
venture to provide facilities-based competition.
Mr. Jenkins
certainly offered a correct characterization of Mr. Ergen’s slipperiness and
inclination to elevate negotiating/complaining/delaying strategies over
building networks. Mr. Ergen likely will try finding ways to collect
a hefty markup on spectrum he hoarded and was soon to lose, having never
migrated to actually installing facilities to provide service. The Justice Department just gave him a 4-year
extension and ample time to remain a wireless reseller, beholden to the
remaining 3 carriers who actually operate physical (not virtual) networks.
Mr. Jenkins
enters the land of half-truths (or less) by implying that fixed and mobile
wireless are just about to the point of interchangeability. He bolsters his
argument with the false implication that Comcast and Charter are
facilities-based carriers in their own right.
Not exactly. Both carriers offer
Wi-Fi hotspots which only offer islands of broadband access with no hand off capabilities. Comcast and Charter mobile service relies on resold
capacity from the 4—make that 3—national carriers.
Comcast and Charter both operate as
“Mobile Virtual Network Operators.” MVNOs “are essentially wholesalers of
wireless spectrum — they buy bandwidth from carriers and then resell it to
customers under new branding.” https://www.businessinsider.com/charter-spectrum-mobile-mvno-service-2018-7 As resellers, MVNOs survive in the
marketplace if and only if a facilities-based carrier agrees to sell them bulk
transmission capacity at a low enough price to squeeze out a profit margin.
We may reach a point where fixed
and mobile network become interchangeable, but we are not there now even as
consumers do abandon wireline phone service.
One should not conflate abandoning the wireline phone networks
for abandoning any and all fixed wireline services. Consumers switch from metered, throttled
and not unlimited wireless service to Wi-Fi, because the latter is unmetered,
unthrottled and far less likely to have a data cap at all, or one that affects
incentives to use the service. Bear in
mind that most Wi-Fi networks use wired broadband for access to the Internet
cloud. The last 50 feet is wireless.
Mr. Jenkins has a penchant for
righteous indignation generated by an alternative reality about current
marketplace conditions. I still cannot
wrap my head around his view that 3 carriers are better than 4. I don’t have a predisposition for any minimum
or maximum number of facilities-based competitors in the wireless
marketplace. I can state with almost the
same certainty as Mr. Jenkins that allowing further concentration of the
wireless marketplace with 3 carriers holding a 95% national market share
guarantees less competition, innovation and employment with higher subscriber
prices, carrier revenues and deteriorating global leadership in next generation
networks and services.
Muddy facts, reporting and
analysis.
