Today the Federal Communications Commission released an order on interoperability in the lower 700mMHz band where smaller competitive wireless carriers can roam on AT&T’s wireless network. I look at the order as a quasi private-public partnership where the FCC met the industry half-way by reworking its power emission rules in the 700 MHz block while AT&T voluntarily agreed to let smaller carriers roam on its network.
The most apparent winner here is the consumer. The ability to enjoy a seamless call experience increases consumer welfare by providing the consumer with additional choice in carriers. Why leave Sprint if that carrier can provide true nationwide calling by leverage its ability to roam on another network.
That to me is the downside of the FCC’s push to increase the roaming capabilities of the smaller carriers. To me all we have here is a reseller agreement on 21st century steroids. Today’s order says that rather than pursue go old fashioned capital formation and leverage it into your own facilities-based networks, just do a B-52’s impersonation and “roam if you want to.”
AT&T’s cost-benefit analysis probably led the company to the conclusion that we’ll pick up a little roaming revenue, but with the tweak in the emissions rules, we’ll be okay. I think in the long run it sends the wrong message that rather than go into the markets and buy cheap money, just make some noise with the regulators.
Steve Berry, president and chief executive officer of The Competitive Carriers Association, recently opined on CSPAN-2’s The Communicators that consolidation was decimating the Tier-2 wireless carriers. Well expect the decimation to continue not primarily because of mergers and acquisitions, but because all these smaller carriers end up being are sources of customer lists because without the expanded facilities-based networks that’s the only value that they will be able to boast about.