Government skeptical wireless can open up broadband market

Earlier this week the Department of Justice urged the Federal Communications Commission to reallocate as much spectrum as possible for the wireless industry. Wireless, the DOJ says, is the best chance we've got at creating a more competitive broadband landscape. "Given the potential of wireless services to reach underserved areas and to provide an alternative to wireline broadband providers in other areas, the Commission's primary tool for promoting broadband competition should be freeing up spectrum," the DOJ told the FCC on Monday.

But now comes a policy letter from the Department of Commerce's National Telecommunications & Information Administration (NTIA) suggesting that the wireless fix may not be so clear cut. "Although early projections from [the] industry are encouraging, it is premature to predict when, or even whether, these wireless broadband services will provide the competitive alternatives that can benefit consumers of all services, including wireline," NTIA chief Larry Strickling wrote to the FCC. It's not like Strickling disagrees with DOJ's assessment of the problem. The fact that some wireline customers seem willing to switch to wireless service suggests that the two offerings could become part of a broader marketplace," NTIA speculates. But the letter advises the FCC keep several factors in mind. First, a big chunk of the wireless industry is owned by AT&T and Verizon. Are they really going to market their wireless products as an alternative to their wireline offerings?