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Slide 1

Emerging U.S. Wireless Broadband Markets

Thomas W. Hazlett
Professor of Law & Economics

George Mason University logo

thazlett@gmu.edu

U.S. Department of Justice
Antitrust Division Symposium
Nov. 29, 2007

Slide 2

Multi-Dimensional Convergence

  • Voice and Data Networks

  • Fixed and Wireless Networks

Slide 3

Cable Modem v. DSL Subscribers 1999-2002 (U.S. Residential)

Graph showing the increases in ADSL subscribers and in cable modem subscribers from December 1999 through December 2002 in six month intervals

[D]

Slide 4

Broadband Race Past 1Q2003 DSL Deregulation

Graph showing increases in cable modem and DSL subscriptions by quarter from the first quarter of 1999 through the third quarter of 2006

[D]

Slide 5

Wireless: the “Third Pipe”?

Slide 6

U.S. Wireless Voice and Data
($ billion annual revenues, 2005-2011)

Graph showing annual revenues (in billions of dollars) for wireless voice and data in the United States from 2005 to 2011

[D]

Source: Telecommunications Industry Association (12.06)

Slide 7

Key Wireless Data Players

  • Mobile voice networks

    • AT&T, VZW, Sprint, T-Mobile

      • spectrum dearth → consolidation (from six)

      • EV-DO v. wCDMA (the rivalry that saved the EU)

      • Regional carriers Alltel, Leap, MetroPCS

    • network sharing → Blackberry, OnStar, iPhone, Virgin Mobile, Twitter

  • ‘Pure play’ entrants

    • Clearwire, Digital Bridge

    • Frontline via 700 MHz?

Slide 8

More Key Players

  • Other entrants

    • Cable ops (SpectrumCo’s 20 MHz via AWS)

    • Satellite TV ops (no terrestrial spectrum yet)

  • Application providers

    • Google, Microsoft, Apple…

Slide 9

Regulation

  • Examine mobile markets globally

  • Retail prices decline with

    • spectrum

    • more spectrum

    • competition

      • more spectrum creates more competition

      • deregulation creates more spectrum

Slide 10

Success of Liberalization

  • Granting licensees flexible spectrum use

    • rather than rigidly defining services, technologies, business models

  • Cellular licenses in USA

    • complex spectrum sharing and investment

    • innovation in technology and bus models

  • Property rights in Australia, Guatemala

    • reduces barriers to entry

Slide 11

“[W]orld's leading market showcase for wireless data”

“Sydney ‘has become the world's leading market showcase for wireless data services,’ says… U.S. technology research Gartner in Australia… [A] reason wireless broadband is taking off here: The government sold off radio spectrum for such services relatively cheaply. Privately held Personal Broadband snapped up its license in 2001 for only about US$7.5 million.”

-- Wall Street Journal (2.18.05)

Slide 12

USA Policy

  • Positive → deregulation of select licenses

    • Cellular, AWS, 2.5 GHz (BRS)

  • Negative → regulatory lags

    • 2G license delay

    • 3G license delay

    • fling with unlicensed (TV Band, 3.65 GHz)

      • Muni WiFi and the rise of the term “over-hype”

    • flirting with re-regulation (700 MHz)

Slide 13

dc.internet.com logo

May 3, 2002

Spectrum Auction Delay Hits Fast Track

By Roy Mark