Are Fixed, Satellite, Cable TV, Mobile Distinct Markets?

At some point, regulators and antitrust authorities will have to consider what the relevant market is for voice, Internet access and even video services, when attempting to make public policy judgments about potential mergers and acquisitions in the U.S. communications and video entertainment markets.

The reason is simply that it is becoming harder to justify regulating voice, video entertainment and Internet access services as distinct industries, when all three services already are offered by providers operating in at least three distinct regulatory frameworks.

Potential blockbuster mergers in the U.S. mobile business, cable TV industry and possible satellite video industry might loom in 2014.

Indeed, some would say huge proposed transactions challenging traditional notions of market dominance and market share are almost inevitable.

Trends are most advanced in the voice and Internet access business, while market share in the video entertainment business also will become even more competitive.

In the second half of 2012, 38 percent of U.S. households used mobile phones exclusively for voice communications. In most areas, some 11 percent to 19 percent “mostly” used mobiles for voice, even when a landline connection was available, according to the latest data from the

And among households of users 25 to 29, mobile-only rates already are at 66 percent.

Among users 30 to 34, some 60 percent of households are mobile only. Among households headed by people 18 to 24, 54 percent of homes are mobile only.

If the rates of mobile substitution continue as they have in recent years, in 2013 the percent of U.S. households that are “mobile only” for voice will have reached 40 percent, growing to 42 percent by the middle of 2014.

In the video subscription business, market share also continues to shift in the direction of telcos, the newest suppliers, while cable share drops and satellite share is stalled.

In both the voice and Internet access businesses, market share is dominated by telcos and cable providers, but with one notable caveat.

In both those businesses, huge amounts of share would be claimed by mobile service providers, if voice and Internet access were not regulated by distinct cable TV, telco and mobile rules.

Those facts might eventually play a role in regulator and competition authority evaluation of the state of competition in the voice services market. One might argue that mobile voice now is the preferred way most consumers consume voice services because the value-price relationship is better than that of fixed network voice.

At some point, mobile video entertainment or Internet access could attain similar advantages.

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