T-Mobile/UScellular Transaction Ripe for Agency Action

According to the FCC's website (see graphic below), the agency's review of the $4.4 billion T-Mobile/UScellular transaction has entered its final month. The record evidence overwhelmingly indicates that consumers, including but not limited to current UScellular customers, would be better off if this deal were approved. Therefore, action prior to the end of the 180-day shot clock is warranted.

In an Opposition to Petitions to Deny filed on January 8, 2025, FSF President Randolph May and Director of Policy Studies and Senior Fellow Seth Cooper expressed their view that the proposed transaction likely would produce pro-competitive benefits, benefits that would outweigh any potential harms. They also noted that arguments against the transaction generally lack supporting evidence and/or a specific nexus to the instant transaction.

T-Mobile and UScellular, GN Docket No. 24-286

Source: fcc.gov

As Mr. Cooper described in a post to the FSF Blog shortly after the parties filed their Public Interest Statement on September 13, 2025, that regulatory filing "presents a prima facie case that [the] proposed transaction … will bring public interest benefits that outweigh any potential competitive concerns."

Tangible benefits identified and documented include faster 5G mobile broadband speeds, higher data capacity, and greater availability of fixed wireless access (FWA) home broadband service, especially in rural areas.

Potential harms, meanwhile, are unlikely given the robust competition that exists in the mobile broadband marketplace, a landscape documented by the Free State Foundation in June 2024 comments to the FCC for its 2024 Communications Marketplace Competition Report. Consumers can choose between three nationwide providers, EchoStar's upstart network that is available to over 70 percent of the U.S. population, mobile virtual network operators (MVNOs) such as Spectrum Mobile and Xfinity Mobile, and regional providers.

Potential harms also would be mitigated by the specific nature of this transaction – in particular, the relative disparity in their respective subscriber bases (126 million versus 4.5 million), the limited extent to which the parties directly compete (as Mr. Cooper pointed out in a February 2025 blog post, the parties "apparently do not have an overlapping competitive presence in thirty-seven percent (37%) of the Cellular Marketing Areas (CMAs) implicated by the proposed deal"), and the fact that T-Mobile sets "its pricing and service terms on a nationwide basis."

In addition, approval of this transaction would enable the efficient and timely reallocation of spectrum to its highest and best use while we wait for Congress to renew the Commission's auction authority – a priority Senate Commerce Committee Chairman Ted Cruz (R-TX) discussed in his Keynote Address at the Free State Foundation's recent Seventeenth Annual Policy Conference (video available here).

High Court Again Declines to Rule on State-Level Price Controls for Broadband

On February 24, the Supreme Court issued an order denying a petition for a rehearing on its order to deny a writ of certiorari in New York State Telecommunications Association v. James. That is a wordy way of saying the Court declined to change its mind about its earlier refusal to take up the case. The Court's order leaves in place an April 2024 decision by the U.S. Court of Appeals for the Second Circuit rejecting ISPs' claims that the New York broadband price control law is subject to field preemption and conflict preemption.

The Supreme Court's prior order denying certiorari in NYSTA v. James is the subject of my blog post from December 18, 2024. Reconsideration was requested by the petitioners following the January 2, 2025, decision by the Sixth Circuit in In re: MCP No. 185. The Sixth Circuit's decision vacated the FCC's April 2024 order that reclassified broadband services as Title II "telecommunications services" and thereby left in place the agency’s prior order that classified broadband as a Title I "information service." The petitioners argued that the result in the Sixth Circuit constituted intervening circumstances substantial enough to warrant the granting of a rehearing and certiorari. But the Court declined to see it that way. 

 

New York's Affordable Broadband Act imposes price ceilings—a type of rate regulation—on broadband Internet service providers (ISPs) offering service in the state. Under the law, ISPs must offer low-income individuals plans of $15 per month and $20 per month. After being involved in litigation, the law finally went into effect on January 15 of this year. As a result of the Supreme Court's recent order, it appears the New York price control law will remain in effect for the foreseeable future. 

 

There are early signs that the New York law has unintended consequences for broadband competition and new deployments in that state. For more, see my February 20 FedSoc Blog post, "States Should Keep Broadband Internet Services Free From Price Controls."

Direct-to-Cell Innovation Will Expand Broadband Access to All Americans

On November 26, the FCC issued an order that granted low-earth orbit (LEO) satellite broadband provider Starlink authorization to provide Supplemental Coverage from Space (SCS) and operate on certain spectrum bands for direct-to-cellular (direct-to-cell) operations, under certain conditions. Direct-to-cell, sometimes called direct-to-device (D2D), is the technological capability of connecting satellite broadband networks to standard terrestrial mobile cellular wireless smartphones. Starlink reportedly has an agreement with nationwide mobile wireless network provider T-Mobile, under which it will provide mobile Internet connectivity in the US exclusively to T-Mobile for one year. 

Additionally, AT&T and Verizon reportedly have entered into commercial agreements with LEO satellite network provider AST SpaceMobile. AST SpaceMobile will be using spectrum in the 850 MHz band licensed by AT&T and Verizon, whereby AST SpaceMobile will provide direct-to-cell capability and thus enable mobile wireless broadband coverage to 100% of the geography of North America. 

As I wrote in a December 2023 blog post, smartphone access to satellite broadband networks is a stellar example of the broadband market's dynamism. Near-future commercial availability of direct-to-cell capability by competing mobile wireless broadband providers in partnership with LEO satellite network operators is innovative, enhances competition, and doubtless will improve access to broadband for Americans. 

 

Indeed, the important potential improvement in broadband access enabled by direct-to-cell innovation should factor into the FCC's forthcoming Section 706 Report as well as its forthcoming Communications Marketplace Competition Report. In assessing progress in deploying advanced capabilities in a reasonable and timely fashion to all Americans and in analyzing market competition for broadband services, the Commission should take a forward-looking analysis rather than rely on static snapshots in time from the past. 

 

For the Commission, direct-to-cell capability ought to serve as a reminder that private market investment and innovation drive the improvement and expansion of broadband networks far more than slow-moving subsidy programs such as the Broadband Equity, Access, and Deployment (BEAD) program that draw from the public treasury – and ultimately from US taxpayers. During the next Trump Administration, the FCC should return its focus to promoting private network investment and innovation and to eliminating rate regulation and other burdensome, costly restrictions that harm market competitiveness and fail to meaningfully benefit consumers. 

 

This year, the Free State Foundation filed public comments and reply comments with the FCC in its current Section 706 report proceeding. FSF also filed public comments and reply comments in the Commission's current Marketplace Competition Report proceeding. 

Media Advisory: FSF Comments Demonstrate the Competitiveness of the Communications Marketplace

Media Advisory

June 7, 2024

Contact: Randolph May at 301-984-8253

Free State Foundation President Randolph J. May and Seth L. Cooper, Director of Policy Studies and Senior Fellow, submitted comments yesterday in the Federal Communications Commission's proceeding requesting comments on the state of competition in the communications marketplace. The extensive data-rich comments demonstrate that the broadband and video services markets are effectively competitive. 

The complete set of the Free State foundation comments, with footnotes, is here.

Immediately below are the opening paragraphs of the "Introduction and Summary" to the comments, without the footnotes.

Introduction and Summary

These comments are offered in response to the Commission’s Notice requesting comments for the agency’s upcoming report on the state of competition in the communications marketplace. The primary focus of these comments is on the broadband Internet and video services markets. As these extensive comments demonstrate with an extraordinary amount of data from 2022 and 2023, the conclusion that the broadband and video services markets are effectively competitive is compelling. Indeed, in the face of the compilation of data included in these comments, it almost would require an act of malfeasance for the Commission to conclude anything other than that the broadband and video services markets are effectively competitive.

 

Of course, the preparation of the Commission’s Competition Report is not intended to be a theoretical or academic exercise. It’s intended to guide the agency’s actions so that they comport with current marketplace realities, not bygone market realities. In other words, the Competition Report findings, if they are true to what the data herein convincingly demonstrate, dictate that the agency implement market-oriented regulatory reform and actions.

 

Specifically, the Commission should make more mid-band spectrum available for commercial wireless services and refrain from rate regulation of broadband that harms financial returns and incentives for new network investment and prevent states from doing the same. Also, the Commission should decline to move forward with the agency’s proposed restrictions on video service pricing options that undermine market freedom and low-cost opportunities for consumers. Instead, the agency, even if now belatedly, should reduce its legacy regulation of multi-channel video programming distributors (MVPDs) that put those services at a competitive disadvantage relative to dominant online streaming video services.

FWA and Cable MVNO Services Make More Gains in Early 2024

The reality of cross-platform competition in today's communications marketplace is evidenced by the continued growth of fixed wireless access (FWA) residential broadband services as well as cable wireless mobile virtual network operator (MVNO) services.

On April 25, T-Mobile announced that it added 405,000 FWA subscribers during the first quarter of 2024, bringing its overall FWA subscriber total to over 5 million. Verizon announced that it added 203,000 FWA subscribers during the first quarter, resulting in a total of 3.4 million. AT&T announced that it added 110,000 subscribers to its new FWA service during the first quarter, increasing its total FWA subscriber count to more than 200,000. 

It is reported that T-Mobile set an initial target of having 7-to-8 million FWA subscribers in 2025 and that Verizon has set a target of 4-to-5 million FWA subscribers for next year. Additionally, New Street Research reportedly has predicted that AT&T will be adding approximately 180,000 FWA subscribers per quarter during the remainder of 2024, with potential increases over the quarters that follow. It is reported that there is some difference in outlook among market analysts such as TD Cowen and Moffett Nathanson regarding how much competitive pressure FWA will put on cable broadband in the near term. 

 

Meanwhile, cable broadband providers continue attracting new subscribers to their MVNO offerings. According to an April 26 announcement by Charter Communications, its Spectrum Mobile service added 486,000 subscribers during the first quarter of 2024. At quarter's end, Spectrum Mobile had 8.3 million subscribers. Additionally, Comcast announced that it had gained 289,000 subscribers to Xfinity Mobile, increasing its subscriber total to 6.9 million. 

 

The proper response by the FCC to the growth of FWA and cable MVNO in the communications market should be to emphasize market competition as a safeguard to consumer welfare rather than stringent government regulation. Unfortunately, the Commission took the latter approach on April 25 when it voted 3-2 to subject broadband Internet access services to public utility regulation. The Free State Foundation filed comments and reply comments in the FCC’s Safeguarding and Securing the Open Internet proceeding that opposed public utility regulation. 

Smaller Networks Marshall the Evidence for Broadband Market's Competitiveness

A report by ACA Connects – included in a February 22 ex parte filing with the FCC – provides a window into the competitiveness of the broadband market from the vantage point of medium and smaller providers. Members of ACA Connects collectively serve nearly 32 million households – or about 25% of all U.S. households – including 7.3 million households in rural communities – or about 29%.

Insightful data points about communities served by ACA members include the following:

• "Members reached 31% more households via FTTH over the last year, a rate far higher than their overall increase in coverage."
• "96% of households have two or more fixed broadband options—and 85% have three or more options."
• "Over a third of all households (37%) in areas served by ACA Connects Members have access to gigabit broadband service."
• "The ACA Connects Members increased gigabit service availability in [] rural communities from 24% in 2022 to 33% in 2023." 

The ACA Connects report also includes figures about trends in the wider broadband market. This includes a breakdown of the share of U.S. households with competitive presence by technological capabilities of 100/20+ Mbps. According to FCC and Cartesian data for 2022-2023, almost 95% of households are in census blocks where there is an actual or potential presence of a cable, fiber, or licensed fixed wireless access (FWA) broadband provider offering speeds of 100/20+ Mbps. For 89.1% of households, a cable provider offering those speeds has a competitive presence, for 49.7% a fiber provider has a competitive presence, and for 39.6% a licensed FWA has a competitive presence. While those figures are higher than actual access figures for households, there are strong pro-deployment and pro-competitive trends. Back in 2017, only 69% of households had access to a provider offering 100/20+ Mbps, with a cable/fiber/licensed FWA competitive presence breakdown in 2017 of 59.3%/19.4%/1.7%.

 

The ACA Connects report was filed with an ex parte regarding the FCC's proposal to reclassify broadband Internet services as Title II telecommunications services and subject them to public utility regulation, including conduct-based restrictions that could eliminate consumer choice for reduced pricing options such as usage-based billing or free-data mobile offerings.

 

In December 2023, the Free State Foundation filed comments opposing the FCC's Title II reclassification proposal. And in January of this year, FSF filed reply comments. If the Commission adopts its proposal, the harm to private market investments and the ability to generate returns on future investments would come to all broadband providers, with small and medium providers almost certainly being hit the hardest. 

Satellite Broadband Competition and Access is Improving, and FCC Policy Should Promote That

A December 14 article in PCMag reports that satellite broadband provider HughesNet is now offering residential subscribers services with advertised download speeds of up to 100 Mbps. This is up from prior offerings of up to 25 Mbps and 50 Mbps downloads. The improved capabilities are the result of the high geostationary orbit Jupiter 3 satellite this summer, which apparently has now been tested and is ready for service. 

According to the FCC's 2022 Communications Marketplace Report, "[a]s of year-end 2021, satellite operators served a combined 1.7 million subscribers in the United States." And subscriber numbers for GEO satellite broadband services offered by HugheNet and ViaSat do not appear to have grown but have perhaps declined slightly in recent years. (GEO providers as well as LEO entrants were subjects of my March 2018 blog, "Satellite Broadband Services Will Enhance Competition and Reach New Consumers.") But HughesNet's satellite service upgrade is a shot in the arm to broadband competition, and the Jupiter 3 will better enable HughesNet's geostationary orbit (GEO) broadband service to compete with Starlink's low earth orbit (LEO) broadband service. 

 

Speaking of LEO broadband, PCMag also reports that a recent filing with the FCC shows that Starlink now serves approximately 1.3 million subscribers, or about 59% of the total satellite broadband subscriber base. And it is reported that Starlink recently received approvals to conduct testing of the cellular Starlink system that will transmit data to unmodified smartphones using T-Mobile’s licensed spectrum in the 1910-195 and 1990-1995 MHz bands. 

 

(Much, much more could be said about the FCC's treatment of Starlink, and expect Free State Foundation scholars to weigh in on that in early 2024. For now, one ought to consider reading the order released by the Commission on December 12 and the separate statements by its members, including Commissioner’s Brendan Carr and Nathan Simington)

 

Future commercial availability of smartphone access to satellite broadband networks is another example of the broadband market's dynamism. For further background, see my March 2023 blog post, "Big Announcements on Deployments to Direct-to-Device (D2D) Satellite Services." Importantly, these broadband innovations that enhance competitiveness and expand access to unserved and underserved Americans ought to be promoted with a light touch regulatory policy and not by turning those services into heavily regulated public utilities, which the Commission has proposed to do. FSF's comments filed with the Commission on December 14 of this year make the case against imposing public utility regulation on broadband services – including satellite broadband. In order to be able to ensure that all Americans have access to broadband, it is essential that the Commission promote competition and innovation by satellite providers, not suppress it. 

AT&T Launches 5G Fixed Wireless Access Service

On Tuesday, AT&T announced the introduction of AT&T Internet Air, its 5G fixed wireless access (FWA) home Internet service, in 16 markets including Los Angeles, Philadelphia, and Detroit. Previously offered only to existing digital subscriber line (DSL) customers in certain areas, the expanded offering of AT&T Internet Air represents yet another milestone in the rapid rise of FWA as a viable competitive alternative to traditional wireline high-speed home Internet access.

In "Fixed Wireless Access Is Boosting Rural Broadband and Consumer Choice," an April 2022 Perspectives from FSF Scholars, FSF Director of Policy Studies and Senior Fellow Seth L. Cooper touted not only FWA's ability "to connect several million Americans in rural and small markets," but also to compete with wireline providers for home Internet customers in more populated markets. This announcement that AT&T is targeting major cities with its FWA service, along with the rapid FWA subscriber gains of T-Mobile, Verizon, and U.S. Cellular, confirm both of those predictions.

Source: AT&T Blog

In a blog post earlier this month, Mr. Cooper highlighted second-quarter FWA subscriber numbers from T-Mobile (509,000 net additions, for a total of 3.7 million), Verizon (384,000 net additions, for a total of 2.3 million, and U.S. Cellular (over 100,000 total subscribers). Notably, these services did not exist prior to 2021.

According to the Leichtman Research Group, T-Mobile and Verizon combined have added over 800,000 FWA subscribers for 5 quarters in a row. In the second quarter of 2023 alone, they added almost 900,000 subscribers – compared to less than 10,000 new cable broadband subscribers and a loss of nearly 62,000 by the top wireline phone companies.

In Comments filed in the FCC's 2022 Communications Marketplace Report proceeding, Free State Foundation scholars argued that the Commission should:

[C]ease its exclusively piecemeal evaluation of broadband marketplace competition that continues to rely on "siloed" service definitions. Instead, it should evaluate competition with a broader "broadband market" definition that takes into account fiber, cable, mobile, FWA, and satellite platforms. This broader outlook would more accurately reflect market realities and be a better guide to formulating Commission policy.

Report on Fixed Wireless Access Competition Shows Need for More Mid-Band Spectrum

Today, Econ One released a report titled "Competitive Effects of Fixed Wireless Access on Wireline Broadband Technologies." There is an ongoing debate over the potential impact of fixed wireless access (services) on broadband competition. This interesting report, authored by Hal Singer and Augustus Urschel, provides a significant contribution to the debate.

The Econ One report estimates the competitive effects of FWA entry into broadband markets. The estimates are based on surveys of consumer responses to hypothetical scenarios in which FWA services are made available at different price levels and in local markets with differing choices among incumbent providers of cable modem and/or fiber broadband services. 

 

According to Econ One's report: "In all scenarios—including at current prices or alternative discounted prices, and in markets with only cable or those with a mix of cable and fiber offerings—the introduction of FWA packages yields price reductions and significant consumer welfare gains." That is, the report found that FWA market entry would prompt many subscribers to switch from incumbent services to competitively priced FWA services and also lead to price reductions for subscribers to cable broadband services. For the details, check out Econ One's report.

Notably, Econ One's report "assumes sufficient capacity to support all potential subscribers with high-speed FWA service." That assumption is key because mid-band spectrum is a necessary input for supporting FWA services for large numbers of subscribers. But as Free State Foundation scholars have pointed out in April 2023 public comments to the NTIA for its National Spectrum Strategy proceeding, in Perspectives from FSF Scholars papers, and in blog posts, there is a shortfall of mid-band spectrum available for commercial licensing on an exclusive basis. The Econ One report is on solid ground in concluding that "[t]he best and fastest way to increase home broadband competition, which will bring significant consumer savings, is getting more full-power, licensed, mid-band spectrum into the hands of FWA providers."

FSF scholars have supported prior FCC allocations of spectrum for use on an unlicensed basis, including the Commission's 5.9 GHz Order. Congress and federal agencies also ought to be open to pursuing new opportunities to dedicated other spectrum resources to unlicensed uses. But it is now imperative that Congress and federal agencies prioritize the repurposing of mid-band spectrum for exclusive licensed use. Congress needs to renew the FCC's authority to conduct competitive bidding auctions for spectrum licenses and get additional mid-band spectrum into use to support FWA.  

Report Compares Broadband Performance in Rural Areas

On June 11, Recon Analytics published an interesting report titled, "The Happiest and Unhappiest Broadband Customers in the United States." Recon received responses from broadband customers from rural counties across America regarding their satisfaction with broadband service performance. The report includes a list of the ten happiest broadband counties as well as the ten unhappiest broadband counties. In the report, author Dr. Roger Entner makes the commonsense observation that broadband provider performance matters more than technology platform, and that the performance level of individual providers can vary substantially in different geographic markets. For more, check out Recon Analytics' report.

Market competition certainly is important for encouraging performance quality by broadband Internet service providers in rural as well as urban areas. Broadband service providers that fail to deliver speeds at advertised benchmarks, that experience network outages and do not provide subscribers with sufficient connectivity, or that otherwise fail to provide value for the dollar deserve to lose subscribers to market rivals who can offer better performance. It's no secret that rural areas have lower population levels and density as well as geographic challenges to providing service. Consequently, rural areas have less competitors than urban areas. Near-term increases in availability and awareness of fixed wireless access (FWA) services may provide an additional spur to incumbent rural broadband providers to boost performance levels in areas where they are perceived to be lagging. 

On Intermodal Competition for Broadband, the FCC's Competition Report Falls Short

On January 24, Free State Foundation published Senior Fellow Andrew Long's Perspectives from FSF Scholars, "On Video, the FCC's Competition Report Falls Short." In that incisive paper, Mr. Long focuses on the 2022 Marketplace Competition Report's treatment of the competitive market and Commission policy for video programming distribution. The evidence of video programming distribution market transformation brought about by the observable ongoing subscriber declines for multi-channel video programming distributor (MVPD) services and by continuing increases in subscriptions for Internet-based alternatives is overwhelming. This transformation has uprooted the perceived analog cable distribution bottleneck upon which the legacy video regulatory apparatus depended. Yet many outdated restrictions on MVPD services remain firmly in place. And Mr. Long makes a strong case that the FCC's report is not fully compliant with the RAY BAUM's Act of 2018's requirements that the Commission identify laws and regulations that pose barriers to competitive expansion of existing providers of communications services and that the agency lay out an agenda for addressing those challenges.

But there is another area in which the FCC's 2020 report comes up short: assessing intermodal competition in the broadband Internet services market. As acknowledged by the report, the RAY BAUM's Act states: "As part of its evaluation, the Commission must consider all forms of competition, including 'the effect of intermodal competition, facilities-based competition, and competition from new and emergent communications services.'" Yet the report never engaged in any substantive assessment of the effects of competition across different broadband technology platforms. Perhaps the closest the report gets is in paragraph 157, which touches on wireline/wireless substitutability:  

Many households continue to subscribe to both fixed and mobile broadband service, suggesting that these separate services offer benefits that are either complementary or independent of each other. Technological innovation in and increased deployment of both the mobile wireless and fixed broadband services markets have broadened consumers’ possible choices of how to access the Internet. 

This shortcoming of the 2022 report is the subject of Commissioner Brendan Carr's statement partially approving and partially concurring in the report: 

When we adopted the Commission’s prior Communications Marketplace Report in 2020, I voted to approve in part and concur in part because, in my view, we could have gone further in recognizing the converged market for connectivity. I continue to have that view this go around. 

FSF's comments to the FCC for its 2020 Communications Marketplace Report also called for a shift away from the siloed approach to discrete service technologies and toward a more serious intermodal competition assessment. To that end, FSF scholars recommended that the Commission adopt a product market definition that encompasses different technologies that provide broadband Internet services. (Those same views were expressed in short form in comments filed by FSF for the 2022 report.) FSF's comments for the 2020 report regarding intermodal competition assessments could double as a critique of the 2022 report, as competition from and among fiber, 5G, FWA, and cable MVNOs continues to increase. 

Charter Announces Big Plan for Deploying Ultra-Fast 10G Broadband

According to news reports, Charter Communications is now implementing a three-year "10G" broadband network upgrade plan that will significantly expand multi-gig broadband service availability and enhance the market's competitiveness. The reported goal of Charter's plan is to make 5 Gbps download speeds available to 85% of its geographic footprint and to make 10 Gbps download speeds available for its top tier service. Charter will be upgrading its existing coaxial cable broadband network by implementing DOCSIS 4.0 technology. And it is reported that Charter will spend $10.65 in total capital expenditures next year, with $6.5 to $6.8 billion allocated for its network upgrade. 

The unveiling of Charter's "10G" plan follows Comcast's announcement of its own 10G deployment plan earlier this fall – as discussed in my September 9 blog post.

 

Cable broadband provider's "10G" platform is a competitor to high-speed fiber broadband networks. Free State Foundation Senior Fellow Andrew Long has written about the potential of cable's next-generation networks in his September 2020 Perspectives from FSF Scholars, "'10 G' Can Help Future-Proof Broadband Infrastructure" as well as in his October 2020 blog post, "Study Predicts that Cable '10G' Platform Will Generate Substantial Economic Benefits." Also, it is worth noting that cable networks are themselves fiber-laden. According to public comments filed by NCTA for the FCC's forthcoming 2022 Communications Marketplace Report, high-speed cable broadband networks "contain 550,000 route miles of fiber-optic cable. Using these fiber-rich facilities, data traveling to or from a cable customer is using fiber for 98-99% of the route." 

 

Notably, Charter is reported to also have a plan to expand its geographic footprint in 2023 and beyond. It is reported that Charter is reaching an additional 1 million new locations, backed by funding from the Rural Digital Opportunity Fund. And Charter apparently has won grants from states for passing another 160,000 locations, with other potential grant awards soon to follow through programs such as the Broadband Equity, Access and Deployment Act (BEAD) Program. For these rural buildouts, Charter reportedly is increasing its capital expenditures over prior years.

 

These significate private network investments – albeit supplemented by subsidies – will help reach unserved and underserved areas. Congress, the NTIA, and the FCC ought to continue promoting a pro-innovation, pro-investment, market-oriented environment by avoiding unnecessary new network management regulation, seeking ways to remove or encourage removal of local barriers to construction of new and upgraded infrastructure, as well as by conducting close and coordinated oversight of the many broadband subsidy programs to ensure that dollars are targeted to truly unserved and underserved areas in American. 

Comcast Announces Nationwide Rollout of Ultra-Fast 10G Services

On September 8, Comcast made a major public announcement of its plans to commence a nationwide rollout of multi-gigabit cable broadband Internet services. Comcast's next-generation broadband services will combine its 10G and DOCSIS 4.0 technologies with Wi-Fi 6E.

According its announcement, Comcast will offer speeds of up to 2 Gbps to homes and businesses in 34 cities and towns by the end of this year. Comcast plans to make these services available to more than 50 million homes and businesses by the end of 2025. And soon it will significantly boost both upload and download speeds, as Comcast stated it would begin offering 10G-enabled multi-gig symmetrical services in 2023. 

 

For U.S. consumers, Comcast's announcement portends the realization of the much-anticipated, high-speed, and high-capacity cable 10G platform, which will offer a stiff competition to fiber broadband services and fixed wireless access (FWA) services. (As an aside, NCTA observed in comments to the FCC in July of this year that cable broadband networks also rely on fiber-rich facilities, as cable customers use fiber for about 98-99% of the data transmission route). And a tremendous upshot for Comcast as well as for cable broadband subscribers is that the 10G upgrades do not require extensive digging or construction in and around households that it already reaches. 

 

Free State Foundation Senior Fellow Andrew Long has helpfully written in more detail about the tremendous potential service capabilities and economic value that will be generated by cable 10G networks. See Mr. Long's September 2020 Perspectives from FSF Scholars, "'10 G' Can Help Future-Proof Broadband Infrastructure" and his October 2020 blog post, "Study Predicts that Cable '10G' Platform Will Generate Substantial Economic Benefits." Importantly, and as Comcast's announcement indicated, 10G will be combined with ultra-fast and capacious Wi-Fi 6E capabilities. Mr. Long has excellently described Wi-Fi 6E capabilities in his February 2020 Perspectives "Wi-Fi 6E Can Modernize Unlicensed Wireless" and his January 2022 blog post, "D.C. Circuit Decision Clears the Way for a Wave of Wi-Fi 6E Devices."

Report Touts Benefits of Fiber Broadband Speeds and Pricing for Americans

On August 23, the Fiber Broadband Association released a report titled "A Detailed Review: The Status of U.S. Broadband and the Impact of Fiber Broadband." The report was prepared by Michael C. Render of market research and consulting firm RVA, LLC. It contains several interesting data points regarding broadband Internet access and fiber-to-the-home (FTTH) services in America.  

Relying on data from Pew Research, the report found that about 92% of Americans have Internet access at home, with 77% having wired service and 15% with wireless service. In terms of market share, the report found that about 49% of Americans with Internet access at home subscribed to cable broadbands, 21.3% subscribed to FTTH services, 13.1% still subscribed to DSL services, 11.7% subscribed to mobile wireless services, 3.1% subscribed to fixed wireless services, and 0.9% subscribed to satellite broadband services. Notably, many cable subscribers are actually served by FTTH services. 

 

On a side note, one can expect the market share for DSL to decline and for fiber as well as fixed wireless connections to rise over the next few years. And it will be interesting to see how the future rollout of multi-gigabit 10G cable broadband platform will impact broadband market share in the times ahead. 

 

Additional data points contained in the report include:

• "The average download speed experienced by users as tested in the annual FBA/ RVA random survey of Internet users…has increased from about 4 Mbps download to 121 Mbps from 2009 to 2022." 
• "Average U.S. upload speeds have increased from about 0.4 Mbps to 26 Mbps in the same period. The upload to download ratio was 11% in 2009 and has increased to 26% in 2022."
• Average download/upload speeds for FTTH services clock at 199 Mbps/75 Mbps.
• "The cost per provided Mbps (cost divided by the number of Mbps received downstream) has decreased very dramatically from about $9.00 to about $0.55 since 2010." 

The report is available on the FBA's website. 

T-Mobile's CDMA Network Sunset Did Not Harm Competition

My July 7 blog post covered most of the misleading and regurgitated evidence alleged by plaintiffs in Dale v. Deutsche Telekom AG, a private antitrust lawsuit challenging the T-Mobile/Sprint merger. I left for this blog a separate discussion about one particular claim: The Dale plaintiffs claim – wrongly – that T-Mobile's early sunsetting of Sprint's CDMA network harmed competition by stifling DISH Network's chances to succeed in entering the wireless market. But rapid migration to next-generation mobile networks benefit consumers with more capacious, speedy, and reliable services.

Because that's a mouthful, let's first understand the facts. As a condition of the T-Mobile/Sprint merger, the DOJ Antitrust Division required T-Mobile to spin off Sprint's largest mobile virtual network operator (MVNO) brand, Boost Mobile, to DISH. The purpose of this spinoff was to facilitate DISH's entry into the mobile broadband market. Combining the acquired MVNO brand with its own network infrastructure potentially would enable DISH to take Sprint's place as the fourth largest facilities-based mobile broadband provider. Boost Mobile had roughly 9.3 million subscribers at the time the merger consummated, so transferring it to DISH gave DISH a pool of customers to kickstart its business.

 

Most of Boost Mobile's customers relied on Sprint's antiquated CDMA network, an inferior legacy technology inadequate for the provisioning of 5G service. Sprint's continued reliance on CDMA technology is one of the many reasons it struggled as a company. CDMA is incompatible with "GSM," the higher quality network technology used by T-Mobile, AT&T, and Verizon. Some former Sprint customers and most of Boost Mobile's customers had old CDMA-only devices that could not connect to GSM networks. Upon the CDMA network sunset, these devices would become useless for those customers, and those customers would need to buy new phones to continue receiving service. In other words, Boost Mobile customers were hemmed in by Sprint's prior bad business decision in selecting CDMA technology that was finally facing its demise.

But as Free State Foundation Director of Policy Studies Seth Cooper explained in an August 2021 Perspectives from FSF Scholars, T-Mobile's choice to sunset the 3G CDMA network it acquired improved mobile broadband service quality for nearly every T-Mobile customer. Knowing this result would be likely, the FCC's 2019 order approving the T-Mobile/Sprint merger declined to require T-Mobile to continue CDMA network operations. Notably, T-Mobile or Boost customers would enjoy the benefits of the network sunset if they upgraded their devices.

Enter the Dale complaint. The Dale plaintiffs allege that T-Mobile sunset its CDMA network earlier than it previously indicated to sabotage DISH's chances at successfully entering the mobile broadband market. In their view, the CDMA sunset forced the customers DISH acquired from Boost Mobile to buy new devices, making them highly vulnerable to "churn" or "switching" to another provider. With DISH then hemorrhaging customers, its revenues would sink and its costs would increase, making it more difficult to construct a nationwide 5G network. And this supposedly would make T-Mobile's settlement commitments to sell network services to DISH meaningless, because DISH's mobile business would quickly lose its customers, making it dead-on-arrival. The complaint then points to the fact that DISH cut an eventual network services agreement with AT&T instead of T-Mobile as more evidence of T-Mobile harming competition.

But the Dale claimants ignores two critical facts. First, the terms of DISH's network usage agreement with AT&T appear to be better than its original agreement with T-Mobile. The contract with AT&T is for a duration of 10 years, while T-Mobile's agreement with DISH is for a duration of 7 years. And the deal does not appear to have increased costs for DISH. The Dale plaintiffs might contend that, even if DISH got a better deal with AT&T, T-Mobile's CDMA sunset still harmed competition by rendering DISH customers' devices useless because AT&T does not have an active CDMA network.

That hypothetical criticism would fall short because of the second critical fact. T-Mobile and DISH resolved their dispute over the CDMA sunset and inked a new, lower-priced network services agreement in which T-Mobile agreed to assist with transitioning Boost Mobile customers to GSM-capable devices. Thus, even if upgrading to next-gen mobile network technology could be conceived as cognizable consumer harm, T-Mobile's agreement with DISH alleviated that harm. Indeed, T-Mobile's CDMA sunset improved mobile broadband service for virtually every customer, likewise increasing network quality competition.

In view of the facts, the complaint in Dale shows an absence of harm and a benefit to consumers. Antitrust claims with no harm and real benefits to consumers are not viable.

Antitrust law is supposed to protect competition, not competitors. Yet far too often, the crux of arguments made by antitrust claimants is harm to particular competitors. Of course, certain types of harm to particular competitors can harm competition, if there is evidence that it leads to market price increases and output reductions. But in this case, harm is nowhere near clear given the pro-competitive benefits from sunsetting legacy technologies and expanding next-generation technologies.

Under the Dale plaintiffs' ideal version of competition, T-Mobile's network infrastructure and financial resources would have been conscripted to maintain an outdated technology to the advantage of a competitor. This would have slowed 5G network deployment and made T-Mobile customers worse off. The plaintiffs in Dale should have difficulty in convincing a court to side with claims that are based on such a skewed view of competition.

Realizing the benefits of next-gen networks requires that old legacy technologies be timely sunset. For the good of consumers, 5G networks have rapidly been deployed across the U.S. DISH still has a shot to become the fourth nationwide facilities-based 5G provider, and its recent announcement that its 5G network is available to more than 20% of the US population indicates that it may be on pace.

Misleading Evidence in Private Antitrust Suit Against T-Mobile/Sprint Merger

Dale v. Deutsche Telekom AG, a recent class action antitrust lawsuit filed in the Northern District of Illinois, alleges that the T-Mobile/Sprint merger harmed consumers by causing price increases. The Dale complaint largely rehashes arguments brought by state attorneys general that Judge Victor Marrero rejected back in 2020, but it also hangs its hat on new misleading evidence: the claim that the Consumer Price Index's "quality-controlled prices" for wireless telephone services have increased since the consummation of the merger.

The problem with that argument is that the CPI's "quality-controlled prices" do not control for quality improvements brought by 5G service.

Currently, the CPI records changes in wireless telephone plans from 4G networks to 5G networks, but does not quality adjust for these changes. The CPI continues to observe the changes in customer access of 5G networks to determine if quality differences can be quantified.

So, the tiny price increases that the CPI measured in late 2020 do not account for the increased quality brought by 5G service. That's a serious problem for the plaintiffs in Dale, because one of the reasons Judge Marrero approved the T-Mobile/Sprint merger was that he found it likely to expedite the rollout of 5G service. To that point, he seems vindicated, as OpenSignal's periodic "5G Report" repeatedly has found that T-Mobile's 5G network is delivering on its commitments and has improved on its past performance levels. So, if the CPI actually adjusted for improved quality from 5G service, it might not show price increases at all.

As a matter of antitrust law, it would be strange to find that the company with the highest-performing and continually improving network is suppressing competition. And as a reminder, antitrust law does not prevent businesses from increasing prices for improved service.

Also, since a brief small spike in late 2020, wireless prices have resumed their downward trend, and are nearing their all-time low on the CPI. Likewise, wireless telephone services are one of the only goods or services measured by the CPI currently decreasing in nominal price despite 40-year-high inflation. As I wrote in May, wireless telephone prices decreased by .7% between April 2021 and April 2022. Inflation during that period was 8.3%, so during the same time, real wireless prices decreased by 9%.

Evidence of improved 5G service quality, recent wireless price decreases, and additional evidence of increasing broadband competition – all of which Free State Foundation scholars included in their 2022 Communications Marketplace Report comments – will be hard for the Dale plaintiffs to overcome.

ACA Connects Broadband Competition Report Undermines Common Carriage

Last week, ACA Connects released "Broadband Competition Is Thriving Across America," a report that argues common carriage regulation of broadband providers is inappropriate in light of increasingly competitive broadband market conditions. The report projects future competitive conditions in the broadband market based on existing FCC data, the historic pace of deployment, and provider announcements for increased fiber deployment over the next few years.

ACA projects that by December 2025:

• Over 95% of homes will have access to at least one provider of 100 Mbps/20 Mbps speeds;
• Over 95% of homes will have access to at least one provider of 100 Mbps/20 Mbps and one provider of 25 Mbps/3 Mbps speeds;
• 84% of homes will have access to at least two providers of 100 Mbps/20 Mbps speeds.

At this level of competition, harms from common carriage regulation, including reduced investment, efficiency, and innovation, are likely to outweigh its potential benefits, which could include price reductions and better speeds in uncompetitive areas. This is because the vast majority of the country would have competitive conditions in the broadband market, so common carriage regulation would fail to improve the service quality that results from competition.

Additionally, ACA's report argues that the NTIA's BEAD Program eliminates the need for common carriage regulation. It is likely that the BEAD program, or other federal broadband programs, will subsidize new deployment in areas that have only one broadband provider. Thus, common carriage is not needed because BEAD will fund new entry, correcting any market failures common carriage could address.

ACA's report also argues that small broadband providers should be exempted from common carriage regulations if they are implemented despite the evidence that they will not improve competition. This is because nearly every household has at least one large broadband provider. Thus, in almost every market where a small provider competes against a large provider, the large provider will be subject to common carriage regulations, and the small provider would have to offer prices or speeds that reasonably compete with the service standards imposed on the large provider in order to attract any customers.

Free State Foundation scholars have long argued that common carriage regulation of the broadband market is unwarranted and potentially harmful. The FCC's 2018 Restoring Internet Freedom Order, which repealed common carriage regulation of broadband services, cited our supportive comments over 50 times. And Free State Foundation President Randolph May and Director of Policy Studies Seth Cooper wrote a book dedicated to this subject, "A Reader on Net Neutrality and Restoring Internet Freedom," which can be purchased on Amazon by clicking the hyperlink.

Mobile Broadband Speeds Now Match 2020 Fixed Speeds

When the Free State Foundation filed Comments in the FCC's 2020 Communications Marketplace Report proceeding, average fixed broadband download speeds were roughly 130 Mbps, according to Ookla. Today, the most recent Ookla data (May 2022) shows that average mobile broadband download speeds are 130 Mbps. So, in just two short years, mobile broadband speeds caught up to the performance of fixed networks in 2020. Of course, today speeds for fixed networks are higher than they were in 2020.

This fact highlights the growing senselessness of the Commission's continued refusal to recognize intermodal competition in the broadband marketplace. Rather than acknowledge that broadband providers of all stripes compete with each other, the Commission slices the broadband marketplace into separate techno-functional categories. Mobile wireless is its own market in the Commission's view, and that market excludes any competition from high-speed wireline deployments by cable and fiber providers.

The accelerating network performance of mobile broadband, likely driven by the rollout of 5G service, makes clear that broadband providers compete intermodally. Of course, as noted above, the speed of fixed networks also improved over the last two years, and now exhibit average download speeds above 220 Mbps, per Ookla's May 2022 data. But even if they hadn't, and mobile network speeds were par with fixed network speeds, it is more than reasonable to assume that many customers might have canceled their fixed subscriptions. The improvements made by mobile networks may have driven fixed networks to make their own upgrades to maintain their speed advantages.

That's clear evidence of intermodal competition.

The Commission should abandon its techno-functional categories and instead assess competition in the "broadband marketplace." That broader market definition would account for intermodal competition between fixed, mobile, satellite, and any other types of broadband providers. It will be increasingly difficult to ignore intermodal competition as more evidence of it emerges from the competitive broadband market conditions today.