Abstract
This report examines the competitive effects of Hybrid Mobile Network Operators (HMNOs) — mobile virtual network operators that rely in large part on self-deployed facilities — on the market for mobile wireless services and recommends that the Federal Communications Commission (FCC) broaden its now antiquated definition of the mobile telephony and broadband market to account for HMNOs. HMNOs share certain characteristics of both facilities-based carriers (Mobile Network Operators or MNOs) and non-facilities-based providers of mobile services (Mobile Virtual Network Operators or MVNOs). An understanding of MVNOs therefore partially illuminates the competitive impact of HMNOs, but HMNOs are poised to play a competitive role in the wireless marketplace that goes substantially beyond that of traditional MVNOs. The FCC’s current narrow definition of the wireless market, which includes only facilities-based MNOs, inaccurately reflects how the market is satisfying consumer demand for mobile broadband services. HMNOs — particularly cable operators that are offering mobile wireless services — are well positioned to compete aggressively in the wireless broadband market and have already begun to do so. In evaluating wireless marketplace transactions, including the proposed merger of Sprint and T-Mobile, the FCC should consider the competitive effects of HMNOs.
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