A Tale of Two Markets

There is a huge disparity in regulating two distinct but highly intertwined industries – broadband and voice. Voice regulation includes the cellular business, and, in terms of revenue, the voice market is larger than broadband. JD Powers reported in April 2023 that the average household is spending $144 for cellular per month. I call these industries intertwined because the players at the top of both industries are the same. The big internet service providers (ISP) are Comcast, Charter, AT&T, and Verizon. The biggest voice players are AT&T, Verizon, and T-Mobile. Comcast and Charter are making aggressive moves to develop a wireless business, and T-Mobile is aggressively selling broadband. The two markets are intertwined in a household. Yet we’ve decided to regulate the two business lines completely differently. A regulatory expert from another country would look at the US regulatory environment with incredulity. The easiest way to explain the difference in regulation is that we don’t regulate according to common sense but base regulation on the original legislation that established regulations for each industry. Voice is still regulated because, in the past, various pieces of federal legislation, like the Telecommunications Act of 1996, specifically mention voice. There has never been a definitive legislative declaration that broadband must be regulated.