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Now they are complaining …

Posted February 21st, 2012 in FCC, Government Regulation, spectrum and tagged , , , , by Alton Drew

CNN started a weeklong series today on the spectrum crunch. What I found interesting was the number of comments to the first post. In a way, I wanted to say, “I told you so.”

My cursory review of the comments found that consumers had no sympathy for disciples of 4G. Customers who swore that they only used their phones to (shudder) make phone calls were critical of consumers who spent too much time on the networks posting pictures, texting, and socially networking with friends that for half the monthly subscription price they could have lunch with.

I, along with one other commenter I read, raised the issue of this is what you get when you are afraid of consolidation. I repost my comment to CNN here for your review.

Slowing down inevitable price increases can only come about in one of two ways. The first way is unacceptable, which is to regulate prices. Wireless access to broadband, while increasingly important for commerce, is not a utility. Additional regulation in wireless will bring about greater inefficiencies in terms of service delivery. Wireless firms would have to create new service niches in order to subsidize rates for consumers who could otherwise not afford increased prices.

The second option is to allow more consolidation. Consolidation creates the economies of scale necessary for keeping rates down. Economies of scale means lower cost per unit of service provided. Bigger firms help to deliver this type of scale. This is why denying the AT&T, T-Mobile merger was a big mistake.

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