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Craig Moffett sees this as I do: “If LTE networks are going to be usage-capped, then the last pretense that LTE can be positioned as a substitute for terrestrial broadband would seem to be gone.” The heart of the U.S. broadband plan is to release more spectrum – enough for 10-20 networks like Verizon's LTE now building – and pray that will be enough competition in five to seven years to check price increases.

   In Indonesia, India, Pakistan and most of Africa, the scarcity of landlines mean "wireless broadband" will be dominant. "Wireless broadband" - especially LTE - could become a player in developed countries if priced right. Rob Pegoraro (Washington Post) finds that Clearwire WiMax could be serious competition to broadband sold by incumbent phone and cable companies. http://bit.ly/baU3V9. He's getting a consistent connection of about 5 meg down, 500K up, on the current, lightly loaded network. He sometimes has to look to see which wireless network his computer is connected to, Clearwire or his 15/5 FiOS.

Ivan Seidenberg and Randall Stephenson should have been on their knees kissing Julius' ring when the Broadband Plan came out. Dozens of their million-dollar lobbyists had been running around D.C. for a year screaming "more spectrum." Blair came through promising 300-500 megahertz, taking on the broadcast lobby. AT&T and Verizon have been bitterly battling to throttle the $15B/year USF/ICC program and Blair intends to cut it in half. The Bells are expecting $billions to reach their bottom line. The plan went further, to the point of absurdity, with what looks likes $billions in subsidies for the Bells, among the most profitable companies in the world, because they haven't built out broadband. Verizon or AT&T stand to collect $billions more because the plan insists public safety should buy services from the carriers rather than building a separate network. 

     Ivan shocked D.C. saying more spectrum isn't really needed for at least five years and probably longer. Ivan of course is right; the three big U.S. mobile carriers have already planned the next five years and they don't intend to invest enough to use all the spectrum they have. Julius should have read my article, Absolutely No Wireless Spectrum Shortage in 2010. Merrill Lynch was the primary source, confirmed by AT&T's CTO, the early plan details, and more.   

   The limits on competitors are capital and customers to earn back that capital. Blair Levin in the plan was clear spectrum problems were unlikely for at least five years, Before ten years, problems are certainly possible but Ivan believes more efficient use of the big carriers' likely demand. The iPhone and other problems are due to AT&T cutting capex, not demand that can't be handled. 

      Verizon doesn't want more competition, a simple explanation why Ivan turned around. The word on Wall Street is that Ivan, soon to retire, has declared detente with the cablecos.

        Ivan told me years ago "We have to get cable out of the home" but cable and especially DOCSIS 3.0 destroyed those plans. With only a year or so left, Ivan instead wants a separate peace, what Wall Street calls "rational competition."  CFO John Killian is virtually begging the cablecos to raise prices another 5-10%. One worldsize cableco explained how this works" "We've gotten so good at signaling each other we don't have to meet in airport motels any more to set prices." 

The Conservative Party election manifesto promises to "require BT and other infrastructure providers to allow the use of their assets to deliver superfast broadband across the country."  France and Germany similarly have requirements for unbundling, duct sharing, and dark fiber access that go far beyond what the "progressives" at the FCC are willing to require. France, Mexico, and Canada are limiting how much new spectrum the incumbents can control, which is already bringing down prices in Canada. 

    While unbundling is one path to competition, that's probably no longer effective in the high speed wireline side in most of the U.S. Britain and France years ago used unbundling to encourage competitors and each has four wired networks covering more than half the country. In the U.S. only measures much stronger than in Europe are likely to produce viable competition beyond two players across most of the country. I base that conclusion on the opinions of top wall street analysts that a major wireline network could  not be financed. I've asked John Hodulik of UBS, Simon Flannery of Morgan Stanley, Glen Campbell of Merrill Lynch and several others. None of them think the money will be available. So if the FCC wants to use competition as a major tool, they need to go much further.