Some people express concern that market forces aren’t working for residential broadband because there isn’t sufficient competition for DSL and cable modem service.
Following up on yesterday’s posting, I’ll suggest that a ‘third’ choice for residential broadband will arrive with the launch of new entrants in Canada’s wireless marketplace.
Years ago, we looked at a cross-over point defined as having more mobile voice subscriptions than wireline voice. Mobile has not only caught up, but blown past wireline. Globally, there are more than 3 times the number of mobile lines compared to fixed.
We are now approaching a new cross-over point. This will be achieved when mobile broadband exceeds fixed broadband.
What role will new entrant wireless operators, fixed and mobile, play as enablers of increased consumer choice for broadband?
I suspect that as new entrants deploy mobile broadband networks, competition from mobile operators, especially those that are not aligned with local telcos or cablecos, may help drive faster bit rates from fixed line operators. The new wireless carriers will be looking to quickly attract revenues to pay for that expensive spectrum purchased earlier this summer.
To compete and differentiate, cable and telephone companies will need to roll-out even faster speeds and expanded services, such as higher bandwidth caps.
It is worthwhile pondering the implications of wireless alternatives for residential broadband.
Regulators and policy makers need to be cautious in managing broadband subsidies in order to be consistent with principles of technical neutrality. Wireless, both fixed and mobile, offers credible options for residential broadband delivery.