On May 1, the
Georgetown Center for Business and Public Policy released a new economic policy
study by Anna-Maria Kovacs titled, “Regulation
in Financial Translation: Will the Incentive Auction Increase Mobile-Broadband
Competition in Rural America.” Ms. Kovacs finds that even if the Federal
Communications Commission imposes restrictions on large providers, namely
AT&T and Verizon, rural communities will mostly likely not benefit from the
incentive auction.
Chairman Wheeler has stated that because AT&T and Verizon control a majority of low-band spectrum, which can travel greater distances than high-band spectrum supposedly for less cost, limiting those large providers will induce smaller wireless competitors to bring service to and compete in rural areas. However, even if Sprint, T-Mobile and other smaller competitors are given access to low-band spectrum at below-market prices, the lack or revenue potential in those targeted rural markets will remain a great disincentive. And, neither provider has indicated a willingness or plan to serve rural areas. If limited in the incentive auctions, AT&T and Verizon, who often provide the only service available in rural areas, will lack the capacity to meet rural subscribers’ demands.
The full study is available here and is worth a read.
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