Amid increasing Sprint/T-Mo merger chatter, wireless competition report says the market is “effective”
For the first time since 2009, the wireless industry’s competitive landscape is “effective,” according to the Federal Communications Commission’s 20th annual report on wireless competition.
The three Republican commissioners, including Chairman Ajit Pai, approved the report; the two Democrats on the Commission disagreed with the conclusion. For the last three years, the annual report on wireless competition was issued by the Wireless Telecommunications Bureau and commissioners did not vote on the findings. This year, commissioners returned to voting.
Scott Bergmann, VP of regulatory affairs for CTIA, said that the organization was “pleased that the FCC has recognized the significant consumer benefits of wireless competition. The industry’s unique competitive nature provides Americans with broad choice – nearly 97 percent of Americans can choose between three or more 4G providers – lower prices, faster speeds and innovative products and services.”
The FCC said that in assessing whether the wireless market has sufficient competition, “we consider a number of facts and characteristics of the provision of mobile wireless
services, which taken together, indicate that there is effective competition” including that “at the nationwide level, no single service provider has a dominant market share.”
“Looking at the bigger picture, most reasonable people see a fiercely competitive marketplace,” said Pai in a statement on the report. “For example, since the FCC’s last report in 2016, all four national carriers have rolled out new or improved unlimited plans. This is strong, incontrovertible evidence.”
Commissioner Michael O’Rielly said, for his part, that “It is clear that the mobile sector is competitive. There are four nationwide and numerous regional providers that are investing in spectrum and infrastructure, innovating and providing new services, and fiercely competing for customers. In fact, you can simply turn on your television or look at the Internet to watch the various marketing campaigns of providers vigorously fighting it out for market share. These entities banter back and forth about who has better coverage, faster speeds, cooler offerings, the latest phones and which plans are the best bang for your buck.”
However, those pieces weren’t satisfactory to Commissioners Jessica Rosenworcel and Mignon Clyburn.
Clyburn disagreed with the approach of looking primarily at the provision of wireless services, when other annual reports had attempted to gauge the health of the overall wireless ecosystem. This report, she said, “takes a decidedly myopic view of the ecosystem, and instead focuses only on ‘competition in the provision of mobile wireless services.’ This is like a doctor looking at one organ and pronouncing a patient fit as a fiddle.” She also pointed to continuing concerns over rural market coverage, and the fact that Mobility II funding is still needed in order to subsidize the extension of wireless services to millions of Americans.
Rosenworcel dinged the report for failing to specifically define “effective competition” while concluding that such competition existed, and noted that while four national carriers currently exist, there are plenty of rumors that that number could change.
“Like everyone else, I read reports of mergers waiting in the wings. So while this report celebrates the presence of four nationwide wireless providers, let’s be mindful that a transaction may soon be announced that seeks to combine two of these four,” Rosenworcel said in a statement. “While the Commission should not prejudge what is not yet before us, I think this agency sticks its collective head in the sand by issuing this report and implying move along, there is nothing to see here. For my part, any transaction before us will require someone to explain how consumers will benefit, how prices will not rise, and how innovation will not dissipate in the face of so much more industry concentration. Someone will also need to explain how having fewer potential big bidders in upcoming spectrum auctions will not render our most potent distribution mechanism substantially less powerful. Those are hard questions that hover over this report—and we should not ignore them.”
CTIA also made note of the competitive threshold in other industries. Bergmann of CTIA noted in a blog entry on the FCC report that, “If you look at how competition is defined in other industries, that quickly becomes apparent. In the cable/satellite television industry, for instance, Congress said a key threshold for competition is at least two providers offering service to at least 50 percent of households in a region. With nearly 97 percent of Americans able to choose between three or more 4G providers, wireless easily passes that threshold.”
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