Comcast's Competitors? Cable Giant Sees Many Rivals in Arguing For TWC Merger - Part 2: Wireless
Comcast filed its bid for buying Time Warner Cable with the Federal Communications Commission this week, and outlined its arguments in a blog post as well. In part two of a long, hard look at Comcast's arguments, let's discuss the rivals the largest cable operator in the U.S. sees in wireless telecoms.
Comcast Executive VP and Chief Diversity Officer for Public Policy, David L. Cohen, wrote a lengthy blog post explaining why the Comcast/TWC merger is necessary for its survival, will be beneficial for consumers, and, in general, is an all around good idea. In it, Cohen described what it saw as direct (healthy) competition all around the company, including from wireless telecoms.
More Competition - From 4G, Wireless Data
Wireless telecommunications were part of Comcast's argument that there's competition all around it, and will be even after it merges with the second largest cable provider in the nation.
Cohen writes, "wireless broadband is here today," and is "already a meaningful broadband alternative." He gives a helpful map of all the areas where the new Comcast/TWC behemoth will compete with one or more 4G wireless providers.
Look at all that competition! But there's a catch to Cohen's "4G competition is already here" argument: it's not actually competitive, at least not yet.
Can Wireless Broadband Match Cable?
A 2013 study of the top wireless companies by research firm RootMetrics (via BGR) shows that the current state of 4G LTE speeds is good, but not great, compared to wired broadband. While "bursts" of speed can top nearly 60 Mbps, in the case of AT&T, that's only an option for people who live next to a cell tower in a less populated area that nevertheless gets LTE.
The average for most of the top markets and carriers was between 10 Mbps and 17 mpbs.
Cohen actually touts figures similar to RootMetric's study, saying, "Wireless 4G technology can deliver speeds well over 50 mpbs and averaging in the double digits." That's true, but it's not a good argument for competition.
As we similarly pointed out in "Comcast's Competitors? Part 1" with regard to DSL broadband, Comcast is playing up competition from industries that can only match the bottom few tiers of cable broadband.
In the case of wireless, the top 4G LTE plans (which aren't exactly cheap, and probably more expensive than wired broadband, especially if you were to actually use that as your primary internet!) can only out-download Comcast's two lowest-tier "Economy" plans and one performance tier -- "Performance Starter." Those three tiers top out at 6 Mbps. Meanwhile, the majority of Comcast's internet tiers, seven total, blow wireless out of the water (the top five blow most DSL away, too).
None of those speeds, including wireless as a primary connection, are competitive in the global sense. The U.S. average broadband speed is 22.71, according to Ookla, which puts us at 34th in the world, behind most industrialized countries.
The Future of Wireless and Smartphones as "First Screen" Competitors
But we're looking into the future with Comcast -- one where there are so many viable alternatives wireless internet. Cohen says that while pricing for wireless broadband is higher than "other broadband services" they will come down.
Fair enough, hopefully speeds will go up and prices will go down in wireless, especially if Comcast goes ahead with its plan to undercut wireless companies with its own WiFi services.
But Cohen says that, in addition, wireless is "becoming a more and more important competitor to wired broadband given the accelerating speed ... and the fact that consumers increasingly use tablets and smartphones as 'first screens.'" This last point is just reiterating the disingenuous argument that the digital divide can be, or is being bridged, by wireless internet.
It's not. As we previously reported for example, studies have shown that many low-income Blacks and Latinos may have access to the internet through wireless, but not wired, home broadband.
In the case of Latinos, who are more likely than the general population to own a smartphone, if you take wireless in the same category as home broadband, 75 percent of Latinos have adequate internet, compared to 80 percent of Whites. Hardly a digital divide at all!
But in those same studies, if you look at home broadband in itself, barely more than half (53 percent) of Latinos have it, lagging behind the national average of 71 percent, and more than 20 percent behind Whites.
And as we've argued before, smartphones aren't practical "first screens." For example, for kids with only wireless access, doing homework on a smartphone is not as fast, fluid, or useful as using a computer with a wired connection. If you think smartphones suffice as your only portal to the internet, try doing a week's work without a computer or wired broadband connection.
But Comcast has a solution to the digital divide as well, and merging with TWC will only expand its program further, argues Comcast. More on that in Part 3.
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