Competition and choice in wireless broadband

Think about the last time you were in a public space — walking down the street, sitting on the bus or subway, eating at a restaurant, or getting to your plane at the airport. Did you see how often people were looking down at their smartphones, busily swiping, scrolling or thumbing? Or were you too busy doing the same to notice?

The simple powers of human observation make clear that wireless broadband is no longer the wave of the future — it’s the reality of today. We also know this empirically — nearly two-thirds of Americans own a smartphone, according to a recent Pew Research Center survey.

{mosads}Even the term “smartphone” is anachronistic, because people use them more for data than voice. They not only have the technology of a mini-computer — they’re increasingly operated like computers. Notably, 19 percent of Americans either do not have broadband access at home other than their smartphones or have limited options for accessing the Internet. 

This fact poses a dilemma for national telecommunications policy. Because as a rapidly increasing percentage of our online activity is conducted wirelessly through smartphones and tablets, healthy competition in the industry becomes ever more critical to the well-being of consumers and the strength of our information-age economy.

Unfortunately, the wireless industry today is anything but competitive. Two carriers, AT&T and Verizon, have a de facto duopoly with two-thirds of the market. With it, they have the financial and political power to drive the other carriers completely out of the market. If this happens, customers — individuals and businesses alike — would face sharply higher prices, reduced service, and less innovation.

In fact, it’s already harming us — the U.S. ranks 26^th out of 29 countries in mobile broadband speeds, according to a March 2015 report by OpenSignal.

To keep the wireless broadband playing field from becoming hopelessly tilted toward the “Big Two,” Congress authorized the Federal Communications Commission (FCC) to promote competition by preventing the excessive concentration of spectrum in an upcoming auction of low-band spectrum licenses.  In keeping with Congressional direction, the FCC adopted rules that ensure any bidder that holds less than one-third of the available low-band spectrum can buy spectrum in the auction.   As chairman and then ranking Democrat on the House Energy and Commerce Committee, I was proud to play a role in enacting this measure.

However, achieving the goal of competitive wireless broadband will depend upon how the FCC uses its regulatory power to structure the upcoming auction of low-band wireless spectrum.

Low-band spectrum (below 1 GHz) is particularly important for wireless operations, because it requires far fewer cell sites to achieve coverage and it penetrates into buildings where most mobile broadband use takes place.  Verizon and AT&T control the vast majority of low-band spectrum, and this upcoming auction is the last foreseeable opportunity for competitive providers to acquire low-band licenses.

Currently, the FCC has created a 30-megahertz spectrum reserve for non-dominant carriers and new entrants. Unfortunately, this is nowhere near enough.  Verizon and AT&T already account for two out of every three wireless subscribers and control most of the critical low-band spectrum resources.  No wonder, then, that the antitrust division of the U.S. Department of Justice has warned the FCC – twice – that these two dominant carriers are poised to use the upcoming auction to starve would-be rivals of resources now in order to raise consumer prices later. 

We need to prevent the loss of innovation, investment and deployment that even more market power would create.   That’s why the FCC, under the able leadership of Chairman Tom Wheeler, should increase the spectrum reserve to at least 40 megahertz.

Throughout my 40 years in Congress, I have always acted on the belief that our economy works best when marketplaces are free, fair and competitive. That’s why I co-authored, with Sen. Orrin Hatch (R-Utah), the Drug Price Competition and Patent Term Restoration Act, which created a regulatory regime that made it possible for generic drug manufacturers to compete against the name-brand pharmaceutical companies, lowering costs for consumers. That’s why I was a leader in the fight for net neutrality and support the policy adopted by the FCC in February preventing internet service providers from keeping out start-ups and blocking open competition. And that’s why I strongly favor FCC action to ensure competition in wireless broadband.

Having retired from Congress in January, I now represent T-Mobile and the Save Wireless Choice Coalition in this fight, not because I favor any one company over another, but because this cause – a push to increase competition – is one I have always championed throughout my public life.

If the FCC follows suit and increases the spectrum reserve for competitors to at least 40 megahertz, we’ll have better service, faster connection times, lower prices, more options, and new innovation. Isn’t that what we all want as consumers? And isn’t that what our economy needs? 

Waxman represented California’s 33^rd Congressional District in the House from 1975 to 2015. He is a past chairman of the Energy and Commerce and the Oversight and Government Reform committees.