Incumbent Facts May Be Stubborn, but Community Reality Bites

Steve Largent (head of wireless industry lobby group CTIA) had a nice little back-and-forth last week with Tim Karr of public interest group Free Press. The exchange would be a little entertaining if it wasn’t part of a concerted incumbent effort to throttle regulation by painting rosy pictures of the state of broadband.

Brief background. Tim writes an OpEd in the Seattle Times about reclassification. Steve writes a rebuttal flowery with said rosy picture of wireless broadband, dodging an actual discussion of Tim’s specific points. Tim figures, a little off-topic, but what the heck. He engages in this new discussion, poking holes in Steve’s (incumbents’) talking points. Another battle in the War of the Rosies. Steve fires back in righteous indignation, leading with Thomas Jefferson’s quote “facts are stubborn things.”

I gather the incumbents’ PR folks feel they have a catchy one-liner they can run with, so expect to hear this a lot. And every time you do, remember the old bumper sticker “If you can’t dazzle them with brilliance, baffle them with b.s.”

Many of us are pushing back on these stubborn facts, not because they’re wrong so much as many are wrongly applied, often irrelevant to the particular discussion and they tend to muddy the water enough that Congress and policy makers create bad policies. Or, as we’re seeing this week, people lean toward making no policy decisions at all because all is well.

There are facts, and then there’s reality

Let’s do a little analysis of incumbent PR strategy. The challenge for everyone fighting for better broadband in the U.S. is that the constant repetition of facts can get people to buy into positions counter to their best interests if we’re not vigilant and diligent. Our task in countering the incumbent PR machine is not separating fact from fiction, but separating reality from stated fact and the context of its use.

Steve replies to Tim’s statement that we don’t have a competitive broadband market with, “We have the lowest concentration and Herfindahl-Hirschman Index (HHI) among the 26 Organization for Economic Co-Operation and Development (OECD) countries monitored by Bank of America Merrill Lynch (BofA Merrill Lynch), including the lowest concentration among the top two providers.”

Having just co-authored a report on the state of broadband competition in the U.S., I can tell you with certainty there are several ways to factually support a positive or a negative view of competition. However you can’t escape the reality of market share. Particularly if, like we did, you take data directly from millions of people to determine who uses which providers. In many states, statewide market share reveals near or actual duopolies, most often with one wireless and one cable provider as the un-dynamic duo.

Market share – or lack thereof – trumps quantity

Sure, it’s a fact that there are several thousand wireless service providers (another incumbent talking point), and in any one state there may be 60 or 70 Internet access providers. But the reality is, when you add up market share for the top ten providers in a state, the remaining 50 or 60 providers combined might have 3% or 4%. In states such as Colorado, Utah and Rhode Island where the top two providers’ combined market share tops 80%, reality for consumers tends to trump any facts you want to throw out about competitiveness.

When you go down to the county and city level, the market share picture (a.k.a. available choices) can be much worse. If you’re in one of the few states with four or five providers that each have statewide market share of between 8% and 15%, look at county or city data. Providers with these smaller market shares are likely each concentrated in one part of the state. So the reality in a number of communities we reviewed is that there is just two, maybe three providers, and in some places neither one offers true broadband service.

Our investments are huge. Our customer satisfaction levels, not so much

The “we’ve invested billions” argument is a little silly. First, the fact you invested a lot of money doesn’t change the reality that plenty of people in smaller markets, and in some of the larger ones, despise their service and their service provider options. It doesn’t eliminate the reality that you don’t and won’t provide service in many areas that need it most. You can’t sugarcoat the reality that even with the best service and speeds your investments produced, businesses, medical facilities, consumers want way more speed than you’re capable of delivering. Unless you have a gigabit service you’re saving for a Christmas surprise.

So you can continue to fight the War of the Rosies and try to baffle us with stubborn facts until the cows come home. But as Scottish poet Andrew Lang said in the late 1800’s, “He uses statistics as a drunken man uses lamp-posts…for support rather than illumination.” This isn’t going to change the broadband realities in rural, small town and low-income urban markets that are just as stubborn. On the other hand, delivering better, faster services…

One Response

  1. Well played.

    The reason carriers fund so much flattering “research” on their industry — is so spokespeople like Largent can cite their rented findings as “facts” and confuse the important debate: How do we give Americans a real choice in a wireless marketplace where open and affordable options are few to none?

    We have a long way to go before we get the choices we need. And its a task made more difficult by industry apologists like Largent, who gets paid to protect the incumbents against new innovations and upstarts.

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