FCC-commissioned study on broadband is neutral on wireless: But explores open-access for fixed networks extensively

Perhaps the best news for wireless carriers out of a new FCC-commissioned study on broadband access in the United States is that more “study is needed” before the agency tries to develop a wireless broadband policy.
The Federal Communications Commission is seeking comment on a study it commissioned to Harvard University’s Berkman Center for Internet and Society on global broadband deployment and usage to help the FCC develop its National Broadband Plan, which it must complete by February as part of President Obama’s American Recovery and Reinvestment Act. The FCC is now seeking comments on a draft of the study, released earlier this week.
One of the most interesting aspects of the study is around fixed broadband services and the fact that the United States has not forced broadband providers to sell access on their networks to competitors, a finding sure to meet resistance among the nation’s largest telcos, local exchange carriers and cable companies.
“Our pricing study … shows that prices and speeds at the highest tiers of service follow a clear pattern. The highest prices for the lowest speeds are overwhelmingly offered by firms in the United States and Canada, all of which inhabit markets structured around ‘inter-modal’ competition—that is, competition between one incumbent owning a telephone system, and one incumbent owning a cable system. The lowest prices and highest speeds are almost all offered by firms in markets where, in addition to an incumbent telephone company and a cable company, there are also competitors who entered the market, and built their presence, through use of open access facilities. Companies that occupy the mid-range along these two dimensions mostly operate either in countries with middling levels of enforcement of open access policies, or in countries that only effectively implemented open access more recently.”
The study says it spends the bulk of its discussion around fixed broadband efforts: “Because the near-universal adoption of open access is such a surprising result, because this kind of regulation goes to the very structure of the market in broadband, and because the policies adopted by other countries are so at odds with American policies during this decade, we dedicate the bulk of our discussion of policies in other countries to assessing the international experience on open access regulation.”
3G services comparison
The study makes few recommendations on 3G services and generally says more study is needed. In essence, researchers said the United States was smart to allow flexible rules on 3G licenses (compared to Europe, which insisted that certain spectrum be allocated for 2G GSM use, forcing the European Commission to change rules so the spectrum could also be used for advanced services), but said perhaps the U.S. also lagged in awarding more 3G spectrum, including AWS spectrum, which is contributing to the nation’s lack of 3G deployments.
“It is difficult to pin down a particular policy or practice responsible for better performance in mobile broadband penetration. The primary regulatory differences between the United States and countries that are high-performing in the area of mobile data appear to be the later introduction of 3G-specific allocations in the United States, and the relative regional fragmentation of the licenses.”
The study also says that Verizon Wireless, which deployed an extensive 3G network, may be at a competitive advantage because of that but it doesn’t know if that is due to policy or market forces.
“The early advantage of Verizon in deploying 3G services may or may not be due to its ability to reuse its 800 and 1900 MHz bands. If it is, and if the advantage persists, then competitive imbalance may turn out to be a price the United States is paying for its early flexibility. This is a question that should require future observation.”
Comments on the study are due Nov. 16.