The Story
Deutsche Telekom, parent company of T-Mobile has announced that it plans to look for partners to provide T-Mobile customers with 4G access. The company is currently considering working with existing companies MetroPCS and Clearwire. Unlike AT&T and Verizon, which are currently building their own infrastructure for 4G networks, T-Mobile would pay Clearwire a sum of money for access to the company’s infrastructure. Additionally, unlike AT&T and Verizon, which are working on building LTE networks, this would mean that T-Mobile’s 4G standard of choice would be WiMAX.
Prix Fixe
As T-Mobile and in all likelihood Sprint will be licensing their 4G technology from Clearwire, there is potential in the market place for the wireless providers to keep prices artificially inflated.Chances are that Clearwire will charge both companies around the same amount for network usage. As for Verizon and AT&T, if the past is any indication, they won’t be changing their prices anytime soon. It’s probable that the switch to 4G will see carriers increasing their prices. After all, they have to make back that money spent on new infrastructure somehow.
The hope on the consumer side of things is that this new incarnation of the FCC will do something to knock down the prices. The commission recently announced that it was beginning an investigation into the whole of the wireless industry, which compliments the US government’s current overall fascination with Verizon and AT&T and the like.
But sadly, I’m not sure just how much the government will do. The real problem with prices in this country is the way that spectrum is licensed: the FCC sells the usage rights to certain amounts of spectrum via an auction, and the highest bidder gets it. Clearwire’s business model is to license its right to certain parts of the 700 Mhz spectrum to other companies, allowing Clearwire and others in the business to keep the prices high. Thus it is the government’s own policy which results in the United States’ high wireless prices.
But again, the new FCC is different from the old FCC. Who would’ve thought that the US government would be the first to seriously be considering net neutrality laws?
