Regulating the wireless beast

Federal regulators – in Congress and at the Federal Communications Commission – increasingly seem fed up with wireless service providers. Ironically, it is the very success of the largest wireless carriers that seems to be getting under government’s collective skin. Over the past few months, I have heard specters from the past, the same specters that forced Ma Bell to break up.
FCC Chairman Kevin Martin has made it apparently clear that he wants to extend the reach of broadband access dominated by the Bell companies (AT&T and Verizon) and their cable TV counterparts. Congressional members and FCC commissioners likewise expressed their disappointment that no new significant players won spectrum in the 700 MHz auction (I’m not sure why Echostar is not considered a new player, but that’s fodder for another day). And Congress and the FCC are most disappointed that no one won the D-Block mixed-use spectrum.
Some legislators are downright mad that wireless carriers are trying to control what attaches to their networks via open access and some of the more liberal bureaucrats are thoroughly disappointed there seems to be little room for smaller carriers these days.
It seems there are even attempts to make sure AT&T Mobility and Verizon Wireless don’t get any bigger, via the spectrum screens. Indeed, the Rural Carrier Association’s petition to ban exclusive handset deals may be well timed.
And yet one has to wonder if these artificial efforts to regulate the industry are worthwhile. The government’s last big effort, the Telecom Act of 1996, did not do what its proponents wanted.
More than half of wireless subscribers belong to AT&T Mobility or VZW – two powerful companies both with a lineage going back to Ma Bell, both which have powerful deep-pocketed landline businesses. And yet, you can’t deny they are two carriers that are really good at running their wireless businesses. Qwest, another of Ma Bell’s offspring, chose to get out of that business and struggled more than either of its counterparts. Sprint (back when it was healthy) and T-Mobile USA have proven to be better regulators for AT&T Mobility and Verizon Wireless than any government effort. And Nextel, back in the day, had a higher ARPU and more loyal customers than any of its competitors.
Maybe that’s why the free marketplace works.