Originally published: December 21, 2011
Last updated: December 23, 2011 - 1:15am
[Commentary] The business model for standalone wholesale wireless network operators, such as LightSquared or what Clearwire hoped to be, is broken. But in the coming year, a new and ultimately more successful model is poised to emerge, one that will transform the entire communications landscape as we know it, and pit Verizon and cable TV on one side against AT&T and satellite TV on the other.
Verizon’s purchase of SpectrumCo was the first indicator of this new model, with the cable companies being granted wholesale access to Verizon’s LTE network in four years’ time so they can offer their own wireless services. Now, after the collapse of the proposed AT&T/T-Mobile merger, all eyes are focused on AT&T’s potential purchase of DISH Network, which could enable the buildout of an LTE Advanced network across 52MHz of spectrum. Such a deal would also have to address the way forward for T-Mobile, which admittedly does not have a clear route to LTE. Thus it seems very likely that T-Mobile would be granted wholesale access to this new 4G network to complement its 3G roaming agreement with AT&T. Of course, while worries about monopolies will be ever-present, we can expect both Verizon and AT&T to commit to a very extensive and rapid LTE network buildout, bringing 4G wireless to 97 percent or 98 percent of the population in line with the objective set out by President Obama in his State of the Union address last February.
In this new environment, the FCC and DoJ will have to emphasize retail competition instead of the facilities-based competition that has been the focus of FCC policy ever since the 1996 Telecommunications Act. The only way to do that will be through making the initial wholesale commitments ventured by Verizon and (I assume) AT&T into a much broader framework for supplying wholesale LTE network access to other wireless providers.
[Tim Farrar is President of Telecom, Media and Finance Associates, a consulting and research firm which specializes in technical and financial analysis across the satellite and telecom sectors]
- Falcone’s LightSquared Has Accords With Five Customers
- AT&T: no room for both Clearwire, LightSquared
- What a Difference a Year Doesn’t Make
- Optimism over US spectrum crunch
- Sprint to End Contract With LightSquared
- LightSquared exodus continues: Cricket lands at Clearwire
- Sprint, Clearwire, Softbank, Dish: Who’s playing whom?
- LightSquared Partners With BrightStar on Suite of Wireless Services
- Falcone Accuses AT&T, Verizon Of Blocking LightSquared
- LightSquared momentum continues with Cellular South deal
- LightSquared gets its first wireless broadband deal with a phone company
- LightSquared Says It Has Yet Another GPS Antenna Fix
- Wireless markets: What a difference a year doesn’t make
- Critics Get Their Say on Verizon/Cable Spectrum Sale
- Dish's Clearwire Offer Lives On