ICYMI: Roger Entner on Spectrum Ownership
Roger Entner has an excellent piece in Fierce Wireless today. He addresses DOJ’s proposal to limit how much spectrum the two largest mobile providers can use to support their networks – the idea of the FCC “limiting competition in order to expand competition.”
Counterintuitive? Yes, indeed. Entner provides some much needed Econ and History 101:
Basic economies of scale and a quick review of recent history tell us that prices are lower when you have an abundance of a resource. Prices are higher when resources are in short supply. Apply that basic concept to spectrum and the U.S. wireless industry and it holds true. Prices for services have declined as more spectrum has come into the marketplace. Just since 2005, prices for voice dropped by roughly 10 percent, prices for data by 90 percent, and for text messages by 85 percent. Billions in investment has poured into the networks in the last five years alone–more than $140 billion.
He also raises the issue of problems in the European market: “Theoretical niceties of competition policy have precious little to do with getting networks built, increasing capacity and driving prices down.” There is a great deal of denial on this point. Those most enamored of more regulation continue to hold Europe up as some kind of model, though it’s unclear what exactly they are pointing to.
Sigh… As Thomas Hardy put it, “There is a condition worse than blindness, and that is seeing something that isn’t there.”
Read the whole thing…