This article, written by Jared Newman of PC World, takes a different approach to government intervention into wireless markets. Titled Wireless Wars: Will Consumers be Collateral Damage, the piece looks at how the FCC looks to address wireless neutrality issues across different wireless platforms. It seems that Newman’s muse for writing this piece was the AT&T and Apple rejection of Google Voice for the iPhone. The application was supposed to be a bandwidth hog and subsequently clog the AT&T network. The FCC saw this as a block to Internet use and neutrality. The corporations may have had legitimate claims about the bandwidth use, but the FCC still wanted answers about why it was blocking a Google, a main competitors, product.
As discussed in my last post, the difference between urban and remote access to wireless networks is a hot topic issues within this country. The divide such access creates is stark and cannot be ignored. For this reason, the FCC is also investigating billing charges and difference between those implemented by wireless companies for these very different markets. Newman’s piece did not shed much light onto what they were exactly finding, but any intervention into issues such as these is something of note. Simple infrastructure issues could answer some of higher prices, but oligopolies and even monopolistic competition could be to blame. With high barriers to entry into these markets, lack of competition can be easy explained. This is why the government has had price controls on utilities within certain areas. Such intervention is certainly possible if they find that the fair market prices do not exist in these areas.
Industry analysts believe that this type of government interaction and enforcement of a neutral internet could eventually hurt the consumer. Many believe that wireless companies will be forced to use tiered pricing systems in order to combat high bandwidth uses. Newman points out that Smartphone use has become popular because users no longer need to meter themselves like they did before with wireless minutes. A tiered system could spell the end to flat rate pricing. This would make the use of such devices theoretically more expensive. So, there seems to be a tradeoff, at least according to industry analysts. This is between the use of a free and open Internet or having restriction set by companies in order to see lower prices. This is certainly not a substantiated claim, though. If some of competition models discussed above are true, consumers may not even be currently experiencing a fair market price. So, possible government interaction could solve both of these issues. Nothing I’m writing is based on research, just a thought on both sides of the coin. If the industry analysts are correct, it will be interesting to see what exactly happens in the future of wireless devices and networks.
Newman, J. (2009). Wireless Wars: Will Consumers be Collateral Damage. PC World, 27, 14.
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