The Obama administration is asking federal regulators to free up more spectrum in an effort to make wireless broadband providers able to compete with the broadband offerings of wireline phone and cable companies.
In a letter to Federal Communications Commission Chairman Julius Genachowski, National Telecommunications and Information Administration CEO Lawrence Strickling said the Obama administration felt additional measures were needed to ensure competition in duopolistic markets where customers have little to no choice of broadband providers.
“Locally, where residential consumers make their purchasing decisions, they frequently have limited, and often no, choice among broadband Internet access service providers,” Strickling said.
Strickling went on to say that the substantial costs associated with deploying a wireline network hindered competition and caused broadband providers to focus on high-density areas at the expense of rural residents.
“The economics of providing wireline broadband Internet access service suggest that market forces alone may not produce additional entry,” he said. “Because of the large fixed and sunk costs of wireline networks, it is likely that additional wired competitors will enter only those markets with the greatest density of users.”
The letter points to wireless networks as a possible solution to increasing broadband Internet access. To that end, Strickling said more spectrum should be made available to wireless providers to facilitate the expansion of wireless broadband access.
However, the NTIA’s analysis questioned whether emerging 4G services, including WiMAX and LTE, would provide a viable alternative to wired broadband.
“It remains to be seen [whether] WiMAX and Long Term Evolution (LTE) technology services will be offered at prices and on terms (e.g.,speed and quality) that make them attractive to wireline users,” Strickling stated.
Strickling’s competitive analysis draws heavily upon a report filed Monday by the Antitrust Division of the U.S. Department of Justice that analyzed the state of competition for broadband Internet access.
The DOJ found it was premature to know whether 4G wireless services would provide the speeds and reliability necessary to become an alternative to wireline services, but added that the prohibitive costs of building wireline networks would limit competition.
Strickling wrote that finding more wireless spectrum was a “primary tool for promoting broadband competition” despite the potential capacity limits of 4G networks. The FCC is already considering reallocating television frequencies to wireless providers.
The NTIA letter came amid the FCC’s efforts to draft a nationwide broadband plan that aims to provide affordable high-speed Internet access to all U.S. residents. The plan is due in February.