The more competitive the market, the better as far as consumers are concerned as increased competition drives down cost. If we look at the broadband market (both wired and wireless) as a whole nationally, there are many players in the ring and increased competition in markets responding to availability of Google’s Gigabit services and other wired and wireless options.
However, when drilling down to specific local markets and looking at increased speed demands, the options are sparse, as it relates to “50Mbit/s and faster services, 82% of homes have either one possible provider or none at all, while 6.3% of the population cannot get any kind of broadband.” When faster speeds are required, there are fewer competitors. In fact, FCC Chairman Tom Wheeler “calls truly high-speed Net access a modern-day essential but says most Americans ‘have no competitive choice’.”
With increased connectivity demands from households expecting responsive home networks capable of handling multiple users (mobile, tablet and laptops,) streaming music and smart TV’s plus the added bandwidth requirements of connected devices – security systems, refrigerators and HVAC systems – consumers are demanding more and new players are getting into the bandwidth consumption business. Not only does consumer spend on monthly access and the availability of appropriate bandwidth to support usage effect the broadband market but also the manufacturers’ of these connected home and mobile devices. The balance of these seemingly disparate industries in tapping the consumer wallet is vital to the American economy. How will the FCC respond?
“Large communications companies like AT&T, Comcast and Verizon Communications have consistently argued for a light regulatory touch from the FCC on all of these issues, saying there’s plenty of competition in both the wireless and wired broadband markets. But Wheeler (has) refuted such claims in his remarks, especially when it comes to wired broadband. Instead, he made it clear that when comparing broadband services, particularly on the wireline side, speed matters.” This increased demand w/o the balance of providers necessary to support the market competitively might have the FCC second guessing the proposed acquisition of TimeWarner Cable by Comcast. If the acquisition were to be approved, it would create an entity that controls internet access in 40% of households in the US.
While it’ll be months before the regulators decide on the acquisition, it looks like the FCC is keeping an eye on all things broadband as it will effect options available to consumers as they relate to price and speed.
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