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FCC: Is There Competition in the US Wireless Market?

July 1, 2015 - Written By Cory McNutt

As the Federal Communications Commission (FCC) prepares its latest annual assessment on the state of wireless competition in the US, we have two outspoken fractions.  On one hand, we have AT&T Mobility arguing that “competition has gone into overdrive,” and on the other hand we have Competitive Carriers Association (CCA) telling the FCC the industry is not competitive and are asking to them to remedy the situation.  This really comes as no surprise as the CCA represents smaller carriers that always feel the bigger carriers have the advantage.

AT&T argued in its filing, “Mobile providers are competing fiercely on price, offering a wide variety of new data plans and promotions, such as shared data plans, equipment installment plans and offers aimed at providing incentives for customers to switch carriers.  Indeed, hardly a week goes by without a provider responding to the latest offers in the marketplace with new and better service plan options, lower prices and special promotions.”  AT&T, as with other major carriers, are seeing their highly coveted Average Revenue Per User (ARPU) going down 4.4-percent because of all of the price cuts and promotions going on as carriers battle for new customers…not to mention trying to keep existing ones from leaving.  They also claim that as the networks become faster with more LTE capabilities, the usage is increasing – and this is happening as customers are paying less for their services.  According to the Cellular Telephone Industries Association (CTIA,) consumers’ use of data has increased 26-percent just between 2013 and 2014.

The CCA sees this in an entirely different perspective – they note that the use of smartphones is increasing as people use them more than ever to read the news, watch videos and to call for help.  The metro areas are one thing, but in the rural areas, consolidation is occurring and that Verizon Wireless and AT&T “have continued to acquire the spectrum of smaller rivals thereby strengthening their duopoly” and thinks that the FCC should “intervene on a targeted basis to facilitate opportunities to increase competition and prevent further harmful consolidation.” They want the FCC to conclude that the market is not competitive.  T-Mobile has been asking the FCC for help in reserving more spectrum, but the FCC is not hearing of it, but on the other hand, they are making sure that the larger companies will not manipulate the auction.

The CCA wants the FCC to review practices and to make sure that smaller carriers have access to low-band and unlicensed spectrum and “to ensure that competitive carriers are not precluded from obtaining interoperable devices.”  The CTIA thinks the industry is “robustly competitive” and as a result in the investments in their networks, “mobile providers are offering faster and more efficient networks across more areas in the U.S…In this competitive marketplace, consumers are the ultimate winners.”  It will be interesting what the FCC will conclude in its report on the competitive nature of the wireless industry…will they listen to the CCA or the CTIA?