Brian Roberts, head of Comcast was just interviewed on CNBC. Remember Comcast now owns CNBC parent company.
Comcast earnings look good, but there was a more interesting and important industry-wide question that was just touched on later during the very long interview. Let’s address that.
They touched on the US Government review of the transaction where Comcast will sell it’s wireless data spectrum to Verizon Wireless.
This interview discussed the benefits to Comcast, but did not address the larger industry wide problem that needs to be solved.
This acquistion would obviously be good for both Comcast and Verizon. When you look at it from their perspective it looks like the deal should be done.
However when you pull the camera back, and look at it from the perspective of the entire industry, it does not look so good.
The reason is for this industry to be healthy there must be competition. When wireless was just about voice with a little wireless data, all carriers had plenty of ammo for that battle.
However during the last four years the industry has changed and is now on a different path.
Wireless data and spectrum is the key to that new path.
That’s why AT&T needed to merge with T-Mobile. That’s why AT&T is acquiring the spectrum from Qualcomm.
And that is the reason Verizon wants to acquire this large swath of spectrum from Comcast and other cable companies like Time Warner and Cox through SpectrumCo.
The problem is the two largest players, AT&T and Verizon, are both rushing to acquire all the spectrum they can.
While this is good for them, what about the other carriers like Sprint Nextel, T-Mobile, C Spire, US Wireless, MetroPCS and others?
To keep the US wireless market healthy and competitive, all carriers need the same access to this spectrum. That will keep the market competitive. Otherwise the marketplace will quickly devolve into two major competitors, period.
While AT&T and Verizon and Comcast would love that, it would be bad for consumers who would face increased cost, less choice and lower innovation.
The industry and regulators need to be thinking in new and different ways to solve this growing crisis.
One suggestion is to pool all the spectrum together and let every carrier pay to access it.
That way the owners of the spectrum would still be compensated for its use.
That way the competitors would all be evenly armed to fight the next battle.
That way the marketplace would have several competitors, rather than just AT&T and Verizon.
The question we need to ask is simple. Do we want only two major competitors, or do we want more? More competitors are more beneficial to the marketplace.
I understand the CNBC interview with Brian Roberts is always very awkward. They are only human.
However these are the questions that should be asked and answered for a continued successful and healthy wireless industry.
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Please attribute to Jeff Kagan, Tech Analyst with www.jeffKAGAN.com
If you would like to discuss, call me at 770-579-5810 or send an email to jeff@JeffKAGAN.com
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Jeff KAGAN| Tech Analyst www.jeffKAGAN.com
Analyst sharing perspective on the changing industry for 25 years
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