Today, close to 70% of all mobile subscribers in the US access mobile services through an account with AT&T or Verizon Wireless. Even more alarming, 84% of wireless industry EBITDA is generated by these two companies.
If those numbers stay the same, or worse, trend upward, the "wireless duopoly" will have a lot more influence over the vast array of new products and services offered as part of the burgeoning Internet of Things.
Exaggeration? Not at all. If AT&T Inc. (NYSE: T) and Verizon Wireless continue this consolidation, there may come a time, one day soon, when they'll have more say over the next generation of consumer technology products and services than any of us would like. With more than 220 million subscribers, Verizon and AT&T provide mobile service for the vast majority of American consumers. Do we really want two companies to have that much market dominance over a platform that consumers have come to rely on so heavily?
But there is a solution to the looming specter of stifled innovation: the Federal Communications Commission (FCC) 's upcoming 600 MHz spectrum auction. Scheduled for early 2016, the FCC will begin a first-of-its-kind incentive auction -- encouraging TV broadcasters to sell their valuable, highly sought after spectrum to commercial carriers for mobile broadband use.
Competitive carriers are particularly hungry for this "low-band spectrum" because it is much more cost effective to build out in rural areas, and it provides more robust service for consumers, including in buildings. The FCC's spectrum reserve is a novel idea to foster a competitive framework for the future.
In short, for a competitive carrier to stay in the game, access to this spectrum is crucial. If structured properly, this auction will unleash "beachfront" spectrum that will foster greater consumer choice, innovative services such as 4G LTE -- and eventually 5G -- and continued economic growth.
If the more than 100 competitive carriers in the US -- that is all of those that compete with Verizon and AT&T -- get a fair shot at bidding on and winning a piece of this critical spectrum, they can build their businesses and continue to provide alternatives to the growing duopoly for access to the mobile Internet. And for app and device developers, having 100 service provider partners offering wireless service to consumers is not only preferable to having just two that can determine prices and quality, but necessary to prevent these two from dictating whether and how people can access third-party products and services.
Innovators and consumers deserve choice, not market domination. Competitive carriers are some of the most innovative companies out there and must have the opportunity to stay in the game to keep challenging the duopoly. These scrappy competitors have real potential to work with fast-moving startups on new, inventive services and technologies.
It's hard these days to remember life without smartphones, but not too long ago access to these innovative technologies and devices was in fact limited to two choices -- AT&T or Verizon. If you wanted one of the first iPhones, your only option was service from AT&T. At the same time, many BlackBerry touch screen models were only available with Verizon Wireless service. While this duopoly control was comfortable for AT&T and Verizon, competitive carriers sought a different future.
As a result, a consortium of 34 technology, device and competitive carrier organizations came together to form the Open Handset Alliance. These forward-thinking competitors pushed for what has led to today's Android devices, running on the most-popular mobile operating system in the world. Not only did Android grow directly out of that movement, but the increased competition broke exclusivity with iPhones and BlackBerry as well.
Today, competitive carriers call on our friends in the tech industry to support our efforts to make sure all carriers, both large and small, have meaningful opportunities to participate and win in the upcoming incentive auction. No one industry knows better how competition can incubate the most promising ideas. Join us as we fight the duopoly and advocate for the innovation economy.
— Steven K. Berry, President & CEO, Competitive Carriers Association