Yet another study has been done on the merits of reselling wireless service. This one, conducted by Professor John Mayor of the Georgetown University School of Business, Mark Burton of Marshall University and David Kaserman of Auburn University, concludes that reselling wireless services contributes to lower costs for consumers, limits price discrimination and promotes competition.
The study will be forwarded to the Federal Communications Commission as part of its ongoing review of competitive conditions in wireless service.
I don’t think anyone would dispute that competition in the marketplace has led to lower wireless rates, which has helped grow the famous wireless pie.
And yet, as both sides in the resale dispute use the word “competition” to make their argument, it seems to me that referring to competition as it exists today is the least-persuasive argument for anyone trying to institute long-term competitive issues policy.
Why? Because by the time rules are relaxed or put in place to ensure the wireless industry is competitive, those very rules will be outdated.
Wireless carriers claim there is no need for mandatory resale because competition already exists in the marketplace. Wireless resale advocates like the aforementioned authors believe “resale arises to enhance marketplace efficiencies and competition. Therefore, successful resale is, in many ways, a direct substitution for regulation.”
Today’s wireless telecom landscape shows that competition is fluid.
Tomorrow’s wireless landscape will look nothing like today’s. Yesterday, CommNet Cellular was a nice, relatively quiet cellular carrier focusing on rural markets. The company had no plans to implement digital technology because it believed PCS competition would be too expensive to come to rural America. Today, CommNet is set to become part of the largest multinational carrier in the world-the linkup between the United Kingdom’s Vodafone Group plc and California’s AirTouch Communications Inc. You think becoming part of that isn’t going to change CommNet’s vision?
Today, I have the option to buy wireless service from several carriers in my area. Tomorrow, several of them could disappear, either through consolidation (leading to less competition) or because they have gone broke (from such intense competition).
Today, carriers are limited by the amount of spectrum they own in a given market. Tomorrow, the spectrum cap may be lifted. And if it is, there will be more consolidation, leading to less competition, and more companies exiting the business because they don’t have the deep pockets to weather this relatively short storm of intense competition.
