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FCC To Loosen Wireless Ownership Rules
jgaynor writes: "The FCC on Thursday voted to remove the existing restriction on how many frequencies a single wireless provider can own in any one location. While this is a blow for consumers who want more cell bandwidth and services like data or video - they could end up getting hosed as this might knock some smaller players out of the market and decrease competition, raise prices, etc. Excite has coverage; CBS Marketwatch does too."
this is pretty much what they did with radio, recently, and look what happened...now clearchannel owns an enormous amount of the radio stations, everywhere, which leads pretty quickly to /. getting pissed off that they might decide to censor a bunch of songs... how does the FCC think anything different will happen with cell networks?
This is a self-referential sig
normally I strenuously object to allowing government interference in business-related arenas, but this is no good at all for Joe Consumer.
A decent analogy might be an imaginary world where air is bought and sold on the market. There's a limited supply of the stuff to begin with, and without regulation large players can just buy up all the "air blocks".
Now, I know that technically the analogy is critically flawed because we all need air to survive, and we don't "need" cell phones. However, one could easily argue that (at least for most countries) telecommunications technologies (and by natual wireless technology) plays a critical role in economies both local and national in scope.
There's a limit to the spectrum available for wireless device use. Yes, competing companies can "use" frequencies owned by competing networks, but they have to pay more (and charge the consumer more) for this capability ("roaming" off your home network incurs charges).
This is probably more a bad thing than good. You can't really make the argument that consumers can still fight with their wallets, because doing so would require moving to a geographic region where the dominant players have lesser influence. I don't know about anybody else, but I'm not prepared to move because I dislike my mobile provider. It seems to me this gives the big guys a huge chance to shaft their customers. It's the ultimate "my way or the highway" scenario.
Plus, this may have more far-reaching implications than we realize. Wireless devices (meaning those other than just phones) are beginning to be common these days. How great is the chance that development on these devices could be somewhat stifled if they don't "play along" with the bigger companies that own certain frequency ranges? Sounds like a pretty far-reaching consequence to me.
This will allow higher bandwidth and better services
Not true. Whenever a scarce resource becomes available there is a sort of land grab. Because of the nature and cost of this particular resource, the players grabbing the "land" are the people who are already the key players in the market.
Now, when a new company comes along with their pimp 10Mb protocol they don't have the ability to go through the usual FCC channels to buy bandwidth. One of three things will happen:
1. The squatting companies demands an insane amount of money for the band creating at best an additional cost to be passed on to consumers, or at worse a barrier to entry.
2. The squatting companies will tell the startup to get bent.
3. The squatting companies will allow the startup to use the band, but requires that they use a "standard" protocol such as CDMA (yay for 9600bps!!).
That's why it's not good.
1) George Bush won the election.
2) Michael Powell was appointed Chairman of the FCC.
Now, given that Mr. Powell is (a) very, very connected to the heaviest hitters in the Republican Party and in big business (b) has stated explicitly that he sees nothing wrong with 1 or 2 mega-corporations controlling all communications in the United States --- why would you expect any different outcome?
sPh
Once one entity controls a large percentage of a certain service/market, it starts cancelling "unprofitable" offerings and raising prices on the rest. Prime examples are the CLEC and independent ISP markets: now that the Baby Bells have driven the independents out of the market, DSL is disappearing and prices are going up.
sPh
Treating spectrum locale as "land" is a perfect demonstration of the value of a Georgist single tax aka "taxation only of unimproved land value". The spectrum locale "land" would have zero value without someone around to enforce the property right -- so the "economic rent" on that property right should be, simply, the costs of defense of that property right. This would fall out of "warrior's insurance".
Seastead this.
The 45 MHz limitation is adequate for any rational use, but it does cause competition; it means that of the 170 MHz of cellular+PCS bandwidth, there are at least four providers, usually five or six. The big players would rather have less competition.
The other advantage of the extra bandwidth is that it allows fewer cells to do the job. Remember the reason for the "cellular" name -- you divide the coveage area into cells, which get smaller and smaller as usage goes up, so that frequencies get reused more often. With more spectrum, a given cell can carry more calls at once. This is cheaper than setting up more antennas, needing more towers and base station equipment. So the giants -- Cingular and VZW -- will be able to carry more per cell.
There's no real consumer benefit -- 3G is too costly for consumer use, except for voice. If you're paying 20c/minute for 13 kbps voice today, you're not going to like the price of 384 kbps data -- the price per bit will probably be fairly close to what you're paying now (because they paid that much for spectrum, not to mention the cost of the gear), making the math dismal.
Forbes covered this two months ago. Basically, because too many providers are splitting up too little bandwidth, cell phone coverage sucks. It's high time the FCC got out of the way and let the stronger players acquire the weaker. Maybe service will improve to the point where I'd actually consider buying a cell phone.
On a related note, I have no sympathy for the companies that overpaid for spectrum licenses nor the greedy Feds who thought they had a chance in hell of collecting all those $billions. Golly, who pays for those license fees? Can you say massive tax on users?