& cplSiteName &

Carriers Respond to FCC's Competition Concerns

Sarah Thomas
5/21/2010
50%
50%

It wasn't what the Federal Communications Commission (FCC) 's massive annual report on the state of the wireless industry said that has wireless operators up in arms; it's what it didn't say. The 308-page report heralded the successes of the industry, but for the first time, did not conclude that it is competitive.

To support its omission, the FCC pointed out that since 2003, market concentration has increased by 32 percent. It never came out and called the market uncompetitive, but focused instead on the fact that 60 percent of the nation's subscribers and revenue come from AT&T Inc. (NYSE: T) and Verizon Wireless . They continue to gain subscribers, while Sprint Corp. (NYSE: S) and T-Mobile US Inc. continue to bleed them. (See T-Mobile Hangs Growth Hopes on HSPA+ in US, Sprint Pins Hopes on WiMax Phone, AT&T Stays Mum on Tiered Mobile Data Pricing, and Verizon Reports Q1.)

The report included a number of interesting charts depicting various aspects of the wireless industry and competition, but also demonstrated there's a number of ways to define competition.



For that reason, the FCC was careful to just present the data and break down the different wireless service inputs, including spectrum, backhaul, handsets and mobile applications, but the wireless operators were equally as careful to quickly present their own definitions of competition.

Wireless industry wards off regulation
CTIA president and CEO Steve Largent sided with AT&T and Verizon, highlighting the industry's investments as evidence of competition. This included the $44 billion that the US wireless industry invested in networks and spectrum in 2008, which, Largent said, was significantly more than Germany, France, Italy, Spain, and the UK combined invested.

"We are very concerned, however, about the potential misuse of 'policy levers' that are referenced in the Report and believe that any attempt to add regulation to wireless as a result of this Report would be both misguided and harmful to consumers," Largent wrote on the CTIA blog.

Both Kathleen Grillo, Verizon senior vice president of federal regulatory affairs, and Robert Quinn, AT&T senior vice president of regulatory affairs, pointed out that the FCC has agreed with them for the past six reports and that reports of consumer satisfaction back up the competitiveness in the market. They also cited innovation in smartphones and applications as evidence of a competitive market. Quinn called the report "disappointing" and even "baffling" for contradicting its own evidence that the market is "working, delivering choices and value."

"For six successive reports, the FCC has confirmed what is obvious to any consumer who watches television, walks down a busy main street or reads a newspaper -- that the wireless market is intensely competitive, with new choices in services, applications, and devices available almost weekly," Quinn wrote.

Sprint was the only one that deviated from its larger competitors, applauding the FCC's recognition of the competitive environment. A spokesman defended Sprint's stance in his blog, cautioning that "you need to remember who owns Verizon Wireless and AT&T Mobility -- landline companies who benefit greatly from the current regulatory system."

A T-Mobile spokeswoman only deferred to the CTIA's canned comments on the matter.

Is regulation imminent?
The FCC has taken a more active interest in the wireless industry than past bodies that just rubber-stamped completion, says Craig Settles, CEO of broadband consultancy Successful.com. Chairman Julius Genachowski has been pushing for net neutrality regulation, which he believes should encompass wireless. (See FCC Chairman Defends Calls for Net Neutrality.)

The industry, meanwhile, continues to fight back against this, claiming that spectrum limitations exempt them from the rules of wired networks. As is clear in their rebuttals and definitions of competition, AT&T and Verizon fear they will be denied access to the multi-billion dollar spectrum auction planned for the end of next year. (See FCC Opens Up 25MHz in 2.3GHz Band.)

"If there wasn't the threat of net neutrality, this report would not raise as much concern and consternation in the industry as it has," Settles says. "But, because they know net neutrality is on the horizon -- they know there's a bunch of ticked-off customers driving this move toward net neutrality -- they are going into spasms. They view this thing as, if there's not competition, they will be regulated. That's straight direct line in their mind eyes, so they put forth all these talking points."

[Ed. note: This article is part one of a two-part series. Coming next: "Defining 'Competition.'"]

— Sarah Reedy, Senior Reporter, Light Reading Mobile

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Featured Video
From The Founder
Light Reading is spending much of this year digging into the details of how automation technology will impact the comms market, but let's take a moment to also look at how automation is set to overturn the current world order by the middle of the century.
Flash Poll
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 2, 2017, 8 Northumberland Avenue London
November 10, 2017, The Westin Times Square, New York, NY
November 16, 2017, ExCel Centre, London
November 30, 2017, The Westin Times Square
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
The Revolution Will Be Automated
Steve Saunders, CEO and founder, Light Reading, 10/10/2017
The Big Cable DAA Update
Mari Silbey, Senior Editor, Cable/Video, 10/11/2017
Is US Lurching Back to Monopoly Status?
Carol Wilson, Editor-at-large, 10/16/2017
Telecom Italia Covers 73% of Italy With NB-IoT
Iain Morris, News Editor, 10/13/2017
DT: Brutal Automation Is Only Way to Succeed
Iain Morris, News Editor, 10/10/2017
Animals with Phones
Hunt & Peck Click Here
Giving new meaning to hunt-and-peck typing!
Latest Comment
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed