The Implications of Fixed/Mobile Convergence for Broadband Competition in the United States

In the United States, the leading providers of fixed broadband service are different from the leading providers of mobile broadband service. In recent years, however, a trend known as “fixed/mobile convergence” has caused this line to blur. The major cable companies have launched mobile services that they now sell to customers located within their network footprints. Meanwhile, the major wireless providers have begun offering fixed services over their wireless networks and hope to improve the quality of these services as wireless technology advances. This article provides an overview of these new categories of services and their implications for broadband competition. It then considers the analytical framework that would apply to a merger between a fixed broadband provider and a mobile broadband provider in light of the changing competitive landscape.

By Matthew Jones¹

I. INTRODUCTION

Most consumers purchase two types of broadband Internet service. “Fixed broadband” allows the user to access the Internet from home, and “mobile broadband” allows the user to access the Internet from a mobile device. In the United States, the leading providers of fixed broadband are different from the leading providers of mobile broadband. Cable companies sell approximately 70 percent of fixed broadband subscriptions nationwide, while three major wireless providers — Verizon, T-Mobile, and AT&T — sell around 98 percent of mobile broadband subscriptions.²

In recent year