Wednesday, June 3, 2020

Some Problems Some Themselves

Real life has a way of making some expected problems a non issue. Most readers now are too young to remember it, but half a century ago it was not clear how we actually would enable simple voice communications for half the people on the planet. 


That is not an unsolvable problem, looked at by 2020 standards. So one can occasionally hear people talk about the phrase “half the world’s people have never made a phone call” as an urban legend. That is not correct now, but might have illustrated the problem in 1980, when the only platform we had available was fixed networks. 


Globally, there were about 4.4 billion people on earth in 1980. In 1980, globally, there were about 7.4 phone lines for every 100 people. So global teledensity was 7.4 percent. That does not directly translate into use of phones, as there were payphones. So people used phones that were not theirs. But phone access was quite limited in many countries. 



In 1980, for example, the number of phone lines per 100 people was perhaps 20 in many developing countries. 


source: Researchgate


In 1980, India had less than half a phone line for every 100 persons. 


source: CEIC


The phrase “half the world has never made a phone call” was an estimate even in 1980. But that aside, it is ahistorical to say the statement never was true, or never illustrated teledensity. Today, when there are perhaps six billion mobile accounts in service, against a population of perhaps eight billion, voice usage increasingly is a diminishing problem. But it was not always so. Historical context matters. 


Likewise, other potential problems seem to solve themselves. It always can be argued that there are competitive implications to market power. In the context of communications, managed services are treated, in terms of regulation, differently than internet apps. 


Common carrier rules prohibit differences in terms of service for like classes of buyers. But not all network-delivered services are common carrier instances. Subscription TV, broadcast TV and radio, internet access and all apps are unregulated or lightly-regulated offerings.


Collect calls, toll-free calls or sponsored data provide examples of instances where a third party subsidizes user or customer consumption. In the mobile arena, sponsored data, or zero rating, have sometimes been viewed as impermissible violations of network neutrality rules or principles. 


But real life has a way of muting the potential market power abuses. AT&T, for example, zero rates mobile data usage when customers of its mobile network watch HBO Max content. Though any third party can buy the same feature from AT&T, apparently few do so. 


But there are other market forces at work. AT&T and other U.S. mobile operators have moved to unlimited usage plans that make any zero rating superfluous. In practice, the anti-competitive threat of zero rating is negated by unlimited data usage plans. 


Some potential problems essentially solve themselves.


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