5G as a Broadband Market Entrant Thomas W. Hazlett H. H. Macaulay - PowerPoint PPT Presentation

5G as a Broadband Market Entrant Thomas W. Hazlett H. H. Macaulay Endowed Professor of Economics ACCC/AER Conference Brisbane, Australia August 1-2, 2019

Amazing Technology, no? 8.1.19 ACCC/AER Conf. * Brisbane 2

When was cellular telephony invented? 8.1.19 ACCC/AER Conf. * Brisbane 3

July 28, 1945 8.1.19 ACCC/AER Conf. * Brisbane 4

New apps anticipated immediately following World War II 8.1.19 ACCC/AER Conf. * Brisbane 5

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July 28, 1984 8.1.19 ACCC/AER Conf. * Brisbane 7

Delay via the Political Spectrum 8.1.19 ACCC/AER Conf. * Brisbane 8

The Political Spectrum: The Tumultuous Liberation of Wireless Technology, from Herbert Hoover to the Smartphone (Yale, 2017) 8.1.19 ACCC/AER Conf. * Brisbane 9

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Liberal Spectrum Policies • lowering costs of entry and expansion • Australia has been a policy leader 8.1.19 ACCC/AER Conf. * Brisbane 11

Liberalization early and often • USA: G-fights – Arguments over ‘is it really 5G?’ – Kudos to policy makers • 5G in the Business Start-up Cemetery – mmW deployments on remnants of Winstar, Teligent, SpeedUS – flexible-use rights just laying around 8.1.19 ACCC/AER Conf. * Brisbane 12

Intermodal Rivalry • in 2003, arguments over fixed-to-mobile sub • voice calls fled to mobile even as debate raged – As of 2009, 3X mobile to fixed voice calls, T HE E CONOMIST (Dec. 29, 2010). • Today, only half of USA HHs have fixed voice – NPR.org (May 4, 2017). • 20% of U.S. HHs now “smartphone only” – Phil Britt, Pew: Smartphone-Only Homes Grow, Now 1 in 5 Use Smartphones Exclusively for Internet Access , T ELECOMPETITOR (May 1, 2018). 8.1.19 ACCC/AER Conf. * Brisbane 13

Temptation of Bypass in U.S. • Parsimonious broadcast TV licensing in 1952 – just 3 commercial networks • “spectrum in a tube” – cable TV • U.S. suppressed cable, c. 1962-1980 – Broadcast would always be primary platform – Cable would “siphon” viewers and drain revenues – Risking loss of news and public affairs • Wrong on 2.5 counts – large VHF stations lost, small UHF stations gained 8.1.19 ACCC/AER Conf. * Brisbane 14

Australian Broadband Penetration 8.1.19 ACCC/AER Conf. * Brisbane 15

OECD Broadband Rankings (12.2013) 8.1.19 ACCC/AER Conf. * Brisbane 16

OECD Broadband Rankings (12.2018) OECD Fixed broadband subscriptions per 100 inhabitants, by technology, December 2018 DSL Cable Fibre Satellite Fixed wireless Other 55 50 45 40 35 30 25 20 15 10 5 0 8.1.19 ACCC/AER Conf. * Brisbane 17

Declare Victory and Go Home • Superior to pumping by protection • 5G is a broadband competitor – with multiple networks • Should be manna from regulatory heaven • US FCC first determined cellular a “natural monopoly” – and unsustainable as an independent firm (1970) • Don’t misunderestimate competition 8.1.19 ACCC/AER Conf. * Brisbane 18

Thank You. • Please send corrections, criticisms, plaudits, shout-outs, missing data and helpful citations to: hazlett@clemson.edu 8.1.19 ACCC/AER Conf. * Brisbane 19