Light Reading

FCC: Act Now as Wireless Duopoly Looms

Steven Berry

Each day, consumers rely more and more on wireless services to connect to people, places, information, and things. We've come to expect access to data anytime, anywhere. Meanwhile, mobile applications and other innovative uses of wireless technology are softening the impact of an otherwise sluggish economy.

But earlier this year the Federal Communications Commission (FCC) released a sobering report on the state of wireless competition in the US. For the third straight year, the Commission was unable to certify that the mobile industry is characterized by "effective competition." With data usage continually on the rise, the wireless industry should be fiercely competitive for consumers to continue to reap the many benefits of a wireless world. (See LTE: The Bridge to the Digital Divide .)

Just a few years ago, the US wireless industry enjoyed robust competition, with numerous carriers at the national and regional level competing to service customers, and consumers had choices in almost every market. This competition resulted in steadily improving services at rapidly decreasing prices, thriving innovation, a growing industry, and, most importantly, a win for consumers.

Unfortunately, the market has changed, and the FCC's most recent wireless competition report confirmed that the wireless industry is in imminent danger of reverting back to the duopoly of its early days. Going down this dangerous path will reduce consumer choice and raise prices, but also hold back the nation's sputtering economic recovery.

History shows that preserving and enhancing wireless competition is a vital means of driving economic growth and job creation, maintaining our nation's global competitiveness, promoting continued innovation, and enhancing consumer welfare. But wireless competition can thrive only with effective safeguards to prevent the accumulation and exercise of market power into a few hands -- rules and policies that prohibit excessive consolidation and preserve access to key inputs like spectrum, devices, and networks for consumers.

To promote a healthy, competitive wireless marketplace, Competitive Carriers Association, which represents the interests of more than 100 competitive wireless carriers, including rural, regional, and national providers, urges the FCC to create a Wireless Competition Task Force. This Task Force should be charged with developing and implementing proposals for promoting greater wireless competition, such as:

  • Updating the FCC's "spectrum screen" and designing pro-competitive auction processes;
  • Ensuring access to commercially reasonable data roaming agreements;
  • Maintaining essential interconnection obligations;
  • Promoting competitive access to devices; and
  • Respecting consumer choice when making universal service support determinations.

Relaxing policies that safeguard competition has led to an excessive amount of consolidation in the wireless industry, ultimately to consumers' detriment. As the industry retreats step-by-step towards a stagnant duopoly, with two carriers dominating the marketplace, the FCC should undertake a holistic review of its rules and policies that effect mobile competition.

Taking steps now to restore competition will allow the industry to continue to innovate and grow under a light touch regulatory regime, as opposed to a market that needs to be disciplined by heavy-handed regulation in attempt to replicate the benefits of competition.

These are exciting times for consumers. Broadband networks are empowering people who have access to these high-powered, information highways to do amazing things. Wireless service is allowing more people to tap into these powerful networks – provided consumers have choices, and access to service plans and devices that fit their budgets and lifestyles. The wireless industry is at a critical juncture, and the FCC should act decisively to restore competition and all of the benefits it entails.

— Steven K. Berry, President & CEO, Competitive Carriers Association (CCA)

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User Rank: Light Sabre
12/6/2013 | 4:42:27 PM
All good points that I personally agree with - do you need 5 owned-operated networks in each marker to handle the growth in mobile or 2-3 strong, robust networks.  I believe having fewer, stronger networks are better.  And as far as competition??? You can walk into any Best Buy or WalMart and have a choice of several mobile companies to choose from - and many offer cheaper plans that run on the same national networks of the owned-operated networks.
User Rank: Light Sabre
12/6/2013 | 1:39:30 PM
I guess it is time to say
Yeah, what we need is wireless CLECs.  That worked out SO well (note this is intended to be dripping with huge amounts of sarcasm) in the wireline network.

I think we need to do anything BUT ask the government to make a competitive market.  We already learned that this can not be done.  If there is economic value in building a 3rd or 4th network, then it will form.  If there is no economic value, then T-Mobile and Sprint will slowly go the way of the dodo.


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