FCC Releases Report on Wireless Competition

The Federal Communications Commission released its 15th annual report on the competitiveness of the wireless market. The report analyzes mobile wireless service market conditions during 2009 and 2010. The report makes no formal finding as to whether there is, or is not, effective competition in the industry. Rather, given the complexity of the various inter-related segments and services within the mobile wireless ecosystem, the report focuses on presenting the best data available on competition throughout this sector of the economy and highlighting several key trends in the mobile wireless industry.

FCC Commissioner Copps said, "The headline for this Report will be that the FCC neither finds nor does not find effective competition. Dig deeper and, sure enough, we find ongoing trends of industry consolidation. The well-accepted metric for market concentration, the Herfindahl-Hirschman Index, remains above the threshold for a “highly concentrated” market. It also appears that consumers are no longer enjoying falling prices, according to the CPI for cellular services. We know there is a looming spectrum crunch and a growing need for backhaul. There is no doubt that the mobile market is an American success story, and there are many ways to measure industry health. But it would be foolish and decidedly not in the public interest to ignore the facts this Report reveals. If we want Americans to continue to enjoy innovation, affordability and improved mobile coverage, we must heed these facts and continue to examine areas where the Commission can act to encourage mobile competition."

"The wide-ranging and competitive wireless sector," said FCC Commissioner McDowell, "has and continues to deliver innovative services at low cost, all the while exhibiting some of the most impressive capital expenditure numbers of any industry in the world. The greatest beneficiaries of these investments are American consumers who have steadily incorporated advanced wireless technologies into their daily lives."

FCC Commissioner Clyburn said, "I still find it troubling that despite the billions of dollars that have been invested to provide wireless coverage to most parts of our country, millions of Americans living in rural parts of our country do not enjoy the competitive choices available in metropolitan areas. As the Report points out, more than seven million Americans still live in rural census blocks with two or fewer mobile service providers. In addition, more than 37 million Americans live in rural census blocks that have two or fewer choices when it comes to mobile broadband services."

The Washington Post's Cecilia Kang writes, "The report...looks like it can't be used as an indication of the agency’s thinking about whether there needs to be more competition in the industry — only that it wasn't able to say there wasn't enough evidence to definitively say so. That was the same finding in the last report. But that leaves lots of wiggle room for interpretation."

"Sometimes it’s not what you say but what you don't say that matters," writes GigaOm's Stacey Higginbotham. "Today’s release of its annual wireless competition report, the silence of the Federal Communications Commission speaks volumes. The problem is, no one knows what that silence is saying."

Free Press Policy Director Matt Wood said, "We are disappointed that the FCC failed again to state clearly and conclusively that the wireless market is not effectively competitive, despite its own evidence. This conclusion should be glaringly obvious, and the Commission’s willingness to stick its head in the sand is not going to make the problem go away. Refusing to bless the current level of competition is a step in the right direction, but it's not enough."