For decades, America’s biggest wireless carriers have been playing a clever shell game with policymakers in Washington. The script is always the same: The carriers insist they desperately need access to more spectrum — the radio frequencies that carry our wireless signals. They argue that without exclusive access to this vital resource, America’s wireless networks will fall behind and innovation will stagnate.
Swayed by these dire warnings, regulators and legislators dutifully offer up huge swaths of spectrum for exclusive commercial licenses ― a model that just happens to protect the carriers from real competition. The carriers promise this will lead to massive new investments, expanded rural coverage and a brighter wireless future for all Americans.
And then … not much changes. Rural dead zones persist. Speeds lag behind other developed nations. Prices remain high. The carriers’ profit margins stay plump.
Lather, rinse, repeat.
It’s time we recognize this cycle for what it is: a self-serving charade that preserves the power of entrenched incumbents at the expense of true competition and innovation. As policymakers contemplate new spectrum allocations in coveted bands like the lower 3 GHz, we need to fundamentally rethink our approach.
The recent C-band auction offers a stark illustration of the problem. This auction of crucial mid-band spectrum for 5G networks raised a record-shattering $81 billion. But a look at the results reveals a troubling picture: The vast majority of licenses went to just three companies — Verizon, AT&T and T-Mobile. Verizon alone spent over $45 billion.
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Smaller carriers and potential new entrants were almost entirely shut out. The rules of the game — from massive license sizes to buildout requirements that bias urban centers — were custom-tailored for deep-pocketed incumbents. Is it any wonder we ended up with more of the same?
This might be justifiable if it led to dramatically better service. But the reality on the ground tells a different story. Anyone who has taken a road trip through rural America knows that despite years of promises, vast dead zones persist. An analysis by Opensignal found that rural users spend over twice as much time without any signal compared to urban users. In some states, the rural-urban divide in 5G availability has actually widened in recent years.
The dissonance between marketing and reality is stark. Cellular carriers trumpet their extensive coverage in ads and assure investors they’ve bought enough spectrum “for decades” to come. But when lobbying Washington for more spectrum, they sing a different tune: suddenly their networks are strained to the breaking point and desperately need more capacity. For instance, Verizon recently told Wall Street they had “unlimited spectrum” while telling Capitol Hill they had “nothing to deploy on.”
The truth? By hoarding spectrum and stifling competition, the big carriers can maintain their oligopoly power. This in turn gives them the financial and political clout to shape future spectrum policy to their benefit.
The result is exactly what you’d expect from an ossified oligopoly. Americans pay some of the highest prices in the developed world for mobile data. Our average speeds lag behind countries like South Korea and Denmark.
It doesn’t have to be this way. Spectrum is a public resource — so Congress should manage it in a way that promotes genuine competition and serves the public interest.
Smaller license sizes would create opportunities for rural carriers and innovative new entrants. Set-asides for smaller players can help level the playing field. Use-it-or-share-it rules can prevent spectrum hoarding. We should embrace new technologies that allow for more dynamic and efficient use of spectrum resources.
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The wireless industry will inevitably push back on such reforms, warning that they will reduce incentives for investment. But we’ve run the experiment their way for decades now. The results speak for themselves.
The stakes here extend far beyond the balance sheets of a few corporations. Our approach to spectrum policy shapes the very fabric of our digital infrastructure, influencing everything from rural economic development to our global competitiveness in emerging technologies.
Imagine a wireless landscape vibrant with competition and new ideas. Picture rural communities finally bridging the digital divide, entrepreneurs leveraging spectrum in ways we’ve yet to conceive, and American wireless innovation once again leading the world.
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This vision is within our grasp, but achieving it requires a fundamental reimagining of how we allocate and manage our public airwaves. The entrenched players will resist, as they always have. But the public airwaves belong to all of us. It’s time to reclaim them for the public good, fostering true competition that drives innovation, expands access, and serves all Americans — not just those in the boardrooms of a select few corporations.
John R.H. Collison
John R.H. Collison is the director of the Oklahoma Rural Association and a farmer and rancher from Devol, Oklahoma.
This article originally appeared on Oklahoman: Big wireless companies oligopoly is a spectrum shell game
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Publish date : 2024-09-02 00:00:00
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