FCC Report Doesn't Conclude Wireless Industry Is Competitive

That's news to wireless industry reps, who say report demonstrates that conclusion

By John Eggerton -- Broadcasting & Cable, 3/22/2013 5:29:09 PM

The FCC Thursday released its 16th wireless service competition report, and as with the previous two reports, it drew no conclusion on whether the marketplace is competitive.

The FCC has similarly declined to declare the video service marketplace competitive in a similar report.

The latest wireless report is based on data from 2010 and 2011, plus some from 2012.

Neither Republican commissioner said they could support the FCC's decision not to make a determination about competition, saying Congress had instructed it to do so.

"Congress tasked us with making a finding as to whether this sector is competitive," said commissioner Robert McDowell. "Clearly, it is. For this reason, I vote to concur to the Sixteenth Mobile Wireless Competition Report, as I have for the last two reports."

"I cannot approve today's report in every respect because it does not carry out all the tasks that Congress has assigned us," said commissioner Ajit Pai. "Specifically, Congress has directed us to include in our annual wireless competition report 'an analysis of whether or not there is effective competition.' The report simply does not do this. To be sure, some might not like answering this question. But the Communications Act does not give us the discretion to dodge. The binary choice of yes or no doesn't countenance a hedge based on 'the complexity of the various inter-related segments and services within the mobile wireless ecosystem. '"

Wireless industry representatives were not pleased. The Internet Innovation Alliance suggested the FCC was setting the industry up for future regulation. "Rather predictably, the FCC has once again avoided concluding that the wireless market is competitive, despite the fact that four out of five consumers have a choice of five or more wireless service providers. In 2010, the Commission reversed the findings of six successive reports that acknowledged the mobile market's success...The Commission is painting a picture of the market with this shade of gray to leave room for justification of future wireless regulation."

"The FCC report demonstrates that four out of five Census blocks have more choices for a wireless provider than they have for peanut butter in the grocery store, that revenue per minute continues to decline, and that capital expenditures by the providers continue to rise despite the soft economy.  And yet they're unwilling to declare the industry competitive, despite these obvious symptoms of competition," said Ev Ehrlich, president of ESC Company and former Undersecretary of Commerce in the Clinton Administration. "Readers of the report should bypass this evasive conclusion and judge the evidence for themselves."

CTIA president Steve Largent said it sure looked like a competitive marketplace from his vantage point. "A cursory glance of the FCC's 16th Annual Mobile Wireless Competition Report, released late last night, reveals a wealth of data that clearly highlights the innovation, investment and competition that epitomizes the U.S. mobile wireless ecosystem," he said. "We believe that a clear-eyed assessment of the level of investment, network deployment, world-leading operating systems, devices, applications and services conclusively demonstrates the value and benefits that consumers and businesses receive from the U.S. wireless industry. In this respect, we regret the Commission missed an opportunity, again, to make a finding about the robust level of competition that consumers enjoy in the U.S."