How to Fix the Wireless Market

[Commentary] It’s good that wireless companies have agreed to warn customers when they are about to exceed monthly limits on voice, text or data usage or incur international roaming fees, which can result in thousands of dollars of extra charges. But consumers need more protection. The voluntary agreement announced last week between the main wireless industry group and the Federal Communications Commission only scratches the surface of troublesome pricing practices that have flourished in an industry that faces insufficient competition. The deal imposes no penalties on the wireless companies for violations. It might work, but the FCC must convince carriers that violations will lead to real regulations with bite.

The wireless industry argues that it should remain as unregulated as possible because it is very competitive. But this is not true. The regulatory outlook is not promising. The FCC has shied away from asserting that voice and data moving on wireless networks are the same thing, which would allow it to apply its greater authority over phones to broadband access services. But it could curtail high early-termination fees on phone contracts, which are subject to more intense regulation. This would increase competition by making it easier for customers to change carriers. If Congress allows the FCC to reallocate television broadcasters’ unused spectrum and auction it for wireless broadband, the FCC could set rules to ensure that the spectrum is available to more competitors. Perhaps the most effective path would be for the FCC to declare broadband access to be a telecommunication service over which it has more control. Without action, consumers are stuck with a deregulated, less-than-competitive market.