Will AT&T Become the Biggest Wireless ISP?

Assuming the AT&T bid to buy DirecTV is approved by regulators and antitrust authorities, AT&T plans to launch a rural areas bundle based on Internet access and TV including Internet access, using fixed wireless technology.

The original plan called for access up to 15 Mbps or perhaps 20 Mbps. That might change now that the Federal Communications Commission has revised the definition of “high speed” to reflect a minimum of 25 Mbps.

Some think the odds of approval are about 50-50. At least so far, public opposition has been fairly muted, compared to the heat the proposed Comcast acquisition of Comcast has generated.

Perhaps that is because the key service, with the greatest strategic implications, is high speed access, not video, in the same way that voice services no longer are the strategic service for other fixed or mobile service providers.

Comcast has argued, with some reason, that video service competition would not be harmed by its acquisition of Time Warner Cable. Many do not agree, but it is true that the two firms actually do not compete head to head very much.

Comcast also has agreed to divest enough video accounts to keep its video market share below 30 percent.

On the other hand, many warn that Comcast’s share of high speed access would climb beyond 50 percent, with a disproportionate share of access at speeds above 25 Mbps.

Perhaps significantly, 63 percent of U.S. homes would have only one provider capable of providing 25 Mbps speeds, and Comcast would provide that access. Historically, antitrust scrutiny has been high whenever a single provider reaches 30 percent share of the market.

AT&T earlier had said it would provide service to about 13 million rural locations using fixed wireless.

Such a development would make AT&T the largest wireless Internet service provider (WISP) in the United States. Up to this point, only Clearwire had tried to build a big business using fixed wireless technology, and even Clearwire had switched emphasis to mobile broadband.

Presumably linear video entertainment would be provided by the DirecTV network.
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