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FCC Finds Plenty of Wireless Competition

Wireless services available to 99% of Americans, agency claims

By Martin H. Bosworth
ConsumerAffairs.com

February 6, 2008
A new report from the Federal Communications Commission (FCC) finds that there was sufficient competition in the American wireless marketplace for consumer dollars, as 280 million people -- 99.8 percent of the population -- have access to one or more mobile wireless services in the area where they live.

"The Twelfth Annual Commercial Mobile Radio Service (CMRS) Competition Report demonstrates that the competitive marketplace for wireless services is continuing to bring consumers more choice, better services, and lower prices," said FCC chairman Kevin Martin.

"Today's report introduces an additional data source that allows for a more granular and accurate analysis of mobile telephone service deployment and competition."

The new analysis method involves using maps of boundaries of major carriers' wireless coverage, enabling the report to judge coverage levels by blocks of respondents to census surveys, rather than county boundaries. Using the new data, the FCC report found that:

• More than half of the U.S. population lives in areas with at least five competing mobile telephone operators.

• Approximately 82 percent of the U.S. population lives in census blocks with at least one mobile broadband provider offering service.

• In 2006, the number of mobile telephone subscribers in the United States rose from 213 million to 241.8 million.

• The volume of text messaging traffic rose from 9.8 billion messages sent during December 2005 to 18.7 billon messages sent during December 2006.

"Employing this more finely tuned data, the report finds that competition in the CMRS market in the U.S. is robust. Industry concentration remains low, and no single firm has a dominant market share," said FCC commissioner Deborah Tate. "This report is a testament to how the application of a light regulatory touch to a competitive market has resulted in one of the most innovative and vibrant sectors of the U.S. economy."

Fellow commissioner Michael Copps questioned the agency's definition of competition in the marketplace.

"[W]e need to define that term ahead of time and then assess whether current competition data meets our definition," Copps said. "Instead, we come at the problem backwards—gathering some data throughout the year and, when report time rolls around, letting the data drive us to an undefined conclusion that competition is present."

"I find our failure to define "effective competition" especially striking because 2007 has been a year in which important concerns have bubbled to the surface about whether the current wireless marketplace delivers consumers an optimal mix of technologies, features, handsets, software, and services," Copps said.

"The FCC must dedicate itself to policies that secure the same degree of hardware and software choice and innovation in the wireless market that we see in the market for personal computers and accessories," he added.

The FCC has been criticized in the past for relying too heavily on flawed data for its surveys and analyses, particularly in studying broadband Internet availability in the United States.

The FCC's broadband data collection system uses ZIP codes of residents who have broadband access to determine if access is available for all residents in the area, a methodology considered so inaccurate that members of Congress have introduced legislation designed to improve the FCC's data collection practices.

May 2, 2007 

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