Too big to innovate

Last week, a company called LightSquared made the news briefly.  Sadly, the news was effectively a requiem for LightSquared.  You see, LightSquared was attempting to blow the wireless Internet industry wide open in the United States, and they ran into a buzz saw in the form of the Federal Communications Commission and all the incumbent wireless providers.

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ReadWriteWeb had a great article exploring the competitive issues here – well worth a read.  I can’t convince you that the FCC did anything wrong in this case, but I’d like you to survey the competitive landscape in this case and think about who stood to win and who stood to lose if LightSquared came to market.

To be sure, the established wireless carriers were at risk here if LightSquared really came to market, but what about consumers?  What would it mean to customers in rural or under-served areas to have a real choice for Internet access?

By choosing not to require a little innovation from incumbents, the FCC made a pretty powerful statement about how it values competition.  Remember, of course, that this same FCC just got done canning AT&T’s acquisition of T-Mobile — why?  Because it would have restricted competition.

Tell me, now — how much do you really believe the motivation of the FCC in these two cases?  I’m feeling pretty skeptical, myself.

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