FCC Finds ‘Effective Competition’ in CMRS Marketplace

Be afraid of the big, bad wolf no more. The FCC has decided there's effective competition in the Commercial Mobile Radio Service market. In a report to Congress, the FCC said that 97% of the total U.S. population lives in counties with at least 3 mobile service operators, the same as a year earlier, and up from 88% in 2000, the first year for which statistics were kept. It said 93% lives in counties with at least 4 operators and 87% with 5 or more; both figures are roughly the same as in the previous year. The report will probably come under some scrutiny; in the year since the last report, Cingular has merged with AT&T Wireless, Sprint with Nextel and Alltel with Western Wireless. The FCC said the most telling signs of competitive pressure is carriers' innovative pricing plans and new service offerings. Consumer behavior is another competition indicator, the FCC said. Churn rates averaged at 1.5%-3% per month in 2004, a slight decline from the previous year. Introduction of local number portability in Nov. 2003 “put added pressure on carriers to improve service quality” to keep customers. The FCC also said the number of mobile telephone subscribers in the U.S. in 2004 grew to 184.7 million from 160.6 million, increasing penetration to about 62%. The average monthly minutes of use per subscriber rose to more than 580 in the 2nd half of 2004 from 507 in 2003 and 427 in 2002, it said. Revenue per minute fell 12% during 2004 and the cellular consumer price index (CPI) declined 1%, while the CPI rose 2.7% overall, the FCC said. It said the volume of text messaging traffic grew to 4.7 billion messages per month in Dec. 2004, more than double the 2 billion a year earlier.
[SOURCE: Communications Daily, AUTHOR: Susan Polyakova]
(Not available online)

* FCC Press Release: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-261444A1.doc

* Full report: http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-173A1.doc

* Statement from Commissioner Copps:
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-05-173A2.doc