Free WiFi for All Would Have Mixed Results
The U.S. Federal Communications Commission has proposed the creation of a free, nationwide WiFi network in order to facilitate web and cellular traffic. Though plans are only in the initial stages (and we are not jumping to any conclusions), the government could provide the U.S. with a high-speed network at no cost, helping to put the nation on par with the Internet service achieved in several other countries. The news does not alter our fair-value estimates for companies we cover, although we await details on the probability and timing of implementation.
Understandably, the companies that currently own spectrum and experience fantastic returns on networks are a bit upset about the possibility. The high margins that wireless operators Verizon (VZ), AT&T (T) and to a lesser extent Sprint (S) are achieving could face pressure. Though in the event the FCC does roll out free nationwide WiFi, these firms could still win subscribers who fear network congestion (or who desire even faster data speed)....558 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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