Wednesday, June 29, 2011

FCC's Wireless Competition Report Gets Some Frowns

The Federal Communications Commission has released its latest annual report on competition in the U.S. wireless Relevant Products/Services market, as mandated by Congress. Though the report's findings demonstrate that the number of carriers serving the nation in specific markets is on the rise, some commissioners were clearly troubled about certain aspects of the report compiled by the FCC's staff.

For example, Commissioner Michael Copps highlighted the trend concerning industry consolidation as well as the fact that U.S. consumers are no longer enjoying falling prices, based on the consumer price index (CPI) for cellular services.

"If we want Americans to continue to enjoy innovation Relevant Products/Services, affordability and improved mobile Relevant Products/Services coverage, we must heed these facts and continue to examine areas where the commission can act to encourage mobile competition," Copps observed.

Rural Coverage Still Lagging

According to the FCC's 15th annual report, as of the third quarter 28 percent of wireless network Relevant Products/Services subscribers were equipped with smartphones and 41 percent of all recent handset buyers purchased smartphones. Moreover, during the first eight months of last year, Android's share of the smartphone Relevant Products/Services market rose from five percent to nearly 20 percent.

The percentage of the U.S. population served by four or more providers increased from 58 percent in November 2009 to 68 percent in August 2010. Moreover, the percentage of the U.S. population served by three or more providers increased from 76 to 82 percent.

In rural areas, 69 percent of the population had a choice of two or more providers and 38 percent could choose from among three or more providers, noted Commissioner Robert McDowell. "To put this progress in a historic context, for 2008 these numbers were 62 and 29 percent, respectively," McDowell said.

Nevertheless, millions of Americans living in rural areas still cannot enjoy the competitive choices available elsewhere in the nation. "More than seven million Americans still live in rural census blocks with two or fewer mobile-service providers," McDowell explained. "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."

Other Issues

Commissioner Mignon Clyburn noted that the FCC's staff was unable to calculate unit price measures for mobile broadband data Relevant Products/Services services [or] calculate unit prices for text messaging Relevant Products/Services. "The commission needs revenue information specifically about mobile broadband use and text messaging so that it can thoroughly evaluate if consumers are benefiting from lower prices for mobile data services," he said. (continued...)

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