Is a Wireless Duopoly a Good Idea?

Though the notion will strike some as obviously ill-fitting, until 30 years ago, telecom companies were regarded as natural monopolies. There are few places left where that remains the case.

That doesn't necessarily mean there is universal agreement about the best way to foster competition, or which patterns are stable and yet workably competitive. In some cases, network access still is seen as a sort of utility function, with competition between retail providers using a shared wholesale network now seen as the way to harness competition while minimizing investment in expensive access networks. That isn't the pattern in the U.S. market, however.

AT&T's proposed acquisition of T-Mobile USA, with no change in the Verizon Wireless footprint, which would result in nearly 75 percent of U.S. subscribers being served by just two national carriers. In some cases, duopolies arguably have provided workable, though not perfect competition.

In the wireless sphere, some will argue that the analog services duopoly was characterized by low rates of innovation, high prices and modest mass market adoption. Not until new competitors and digital services were unleashed did the mobile industry really reach ubiquity. So some will worry about a return to a national duopoly.

But some also will note that much innovation and competition in the wireless space now is conducted by application and handset providers, and that access is just one element. It will not be a terribly easy analysis to figure out what the "market" is, or how the dynamics of competition now work.

Mallinson: Working through mobile competition pipedreams - FierceWireless:Europe