Perhaps nobody would argue that regulators have special gifts where it comes to predicting the future, and yet many often argue for far-reaching regulation to promote more competition now, based on current competitive conditions, when it seems clear enough that more competition is coming.
In the U.S. market, concern about the present duopoly of fixed network telcos and cable is rational. But independent internet service providers appear to be increasing their efforts.
The advent of 5G means mobile substitution for fixed internet access will be possible, and possibly at scale, from four suppliers.
At least two existing satellite providers also are in the market, and some number of new low earth orbit satellite constellations plan to begin operations in 2019 or so.
SpaceX, OneWeb and Leosat are present contenders. SpaceX is planning to launch the first two LEO satellites in February 2018, with an initial constellation of some 4,425 orbiting transmitters in service to blanket the surface of the earth with gigabit internet access with latency of 25 milliseconds, equivalent to typical fixed network latency.
SpaceX further has talked about launching a second fleet of perhaps 7,500 satellites at even lower orbits to boost capacity and provide even lower latency in urban areas.
It remains unclear how many of the proposed LEO constellations actually will launch, much less become sustainable operations.
But the point is that present levels of service and competition are not permanent. More competition is coming.
Anybody who thinks internet access competition is reaching a nadir might need to rethink those assumptions.
In an immediate sense, even the amount of competition in local markets appears poised to grow because AT&T and Verizon will, for the first time, compete against each other, as well as the local cable company, in perhaps a dozen or so markets, initially.
The important development is that markets traditionally lead by a telco and a cable operator, sometimes supplemented by competition from Google Fiber or other independent internet service providers, now will become markets where two tier-one telcos, a tier-one cable operator and often other ISPs also compete.
In other words, competition still is increasing, not shrinking, as some believe, both near term and certainly longer term.
AT&T is offering internet access to multiple-dwelling units in Boston. The move is one example of a new trend in the fixed network business: large tier-one competitors moving out of region for the first time at scale.
Verizon, for its part, already has launched an assault on the AT&T market in Sacramento, and seems likely to attack another dozen or so markets as well. Most of the new 11 launch markets are out of region for Verizon, including Ann Arbor, Atlanta, Bernardsville (NJ), Brockton (MA ), Dallas, Denver, Houston, Miami, Sacramento, Seattle and Washington, D.C.
Of those markets, Washington, D.C.; Brockton and Bernardsville are inside Verizon’s fixed network footprint. The other markets are AT&T or CenturyLink domains.
Those moves outside the fixed network footprint by Verizon indicate thinking about growth prospects outside the core fixed network service territories, and probably also show that fixed wireless in the millimeter wave bands offers a new business case that did not exist before.
It remains unclear how much--if at all--the Verizon deep fiber architecture will play a key role in those out-of-region assaults. At least initially, the targets of opportunity likely will be locations reached by the metro fiber assets, using fixed wireless for access. That tends to suggest urban core targets of opportunity.
Essentially, AT&T and Verizon are becoming competitive local exchange carriers, at some scale, for the first time, attacking other tier-one telcos in their home markets.
The business case likely also includes the ability to use those assets to help with backhaul operations to support 5G small cell deployments as well.
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