Not that I am complaining, but the Federal Communications Commission released a 308-page report on the state of competition in the wireless industry and reached no conclusion. While at first glance, that seems like a lot of work for no results, digging further into the report, it makes more sense.
The wireless industry ecosystem is complex, to say the least. The FCC acknowledges that in its conclusion that there is no formal finding as to whether there is effective competition in the industry. According to one index, the industry is highly concentrated, which is no surprise since AT&T Mobility (T) and Verizon Wireless (VZ) account for the lion’s share of the subscribers, profit and investment in the sector.
There are a ton of apps and new devices are always coming onto the market, the FCC noted.
Some of the more interesting findings are that many other countries support about three or four operators nationally.
Wireless service in rural communities improved from the previous year’s report, but there are still coverage gaps and not enough competition, the FCC said.
“Just over 500,000 people in rural areas had no mobile wireless coverage as of July 2010, and approximately 3.8 million had no mobile broadband coverage as of August 2010. In addition, while 99.2% of the rural population is covered by at least one mobile voice provider, and 96.9% is covered by at least two providers, there is a disparity in the percentage of rural and total U.S. population covered by more than two mobile voice provider networks. This disparity is even more pronounced when considering mobile broadband service: 82% of the total U.S. population is covered by three or more mobile broadband provider networks, compared to just 38% of the rural population.”
Another interesting finding in the report is that the FCC recognizes some of its methodology no longer applies. For instance, the agency traditionally has estimated the number of wireless subscribers by using the Numbering Report/Utilization Forecast, which tracks the number of phone numbers that have been assigned to devices. However, as people today sometimes own more than one device, the agency recognizes it needs to count connections, not people.
The average price for a text message also can’t be calculated accurately because operators don’t separate those numbers. And finally, much of the information is for calendar year 2009, which is fine but doesn’t provide an accurate assessment of what is taking place in wireless today. (Think of the tablet uptick.)
There is enough information in the report that lobbyists will be able to pick and choose something to support their cause, but their opponents will as well.
Is the wireless industry competitive? No doubt. Is it concentrated? Again, no doubt.
