Enhanced Data Collection Could Help FCC Better Monitor Competition in the Wireless Industry

Government Accountability Office, 441 G St., NW, Washington, DC, 20548, United States

The Government Accountability Office discusses changes in the wireless industry since 2000, stakeholders' perceptions of regulatory policies and industry practices, and the strategies Federal Communications Commission uses to monitor competition.

The biggest changes have been consolidation among wireless carriers and increased use of wireless services by consumers. Industry consolidation has made it more difficult for small and regional carriers to be competitive. Difficulties for these carriers include securing subscribers, making network investments, and offering the latest wireless phones necessary to compete in this dynamic industry. The GAO recommends that the FCC should assess whether expanding original data collection of wireless industry inputs and outputs -- such as prices, special access rates, capital expenditures, and equipment costs -- would help the FCC better satisfy its requirement to review competitive market conditions with respect to commercial mobile services. (GAO-10-779)

The report moved Rep. Ed Markey (D-MA), Rep. Rick Boucher (D-VA), and Rep. Henry A. Waxman (D-CA) to call on the FCC expand its collection and review of data to monitor wireless competition and its impact on consumers. "It is time for the FCC to complete its evaluation of special access pricing. Pro-competitive policies in the special access market are essential to maximize choice, affordability, and technological innovation in the wireless market," said Rep Waxman, the Chairman of the House Commerce Committee.

Members of the Senate Commerce Committee raised concerns about rural coverage, confusing bill statements, early termination fees, restrictive contracts, and "network practices that restrict innovation, commerce and job creation."

Gigi B. Sohn, president and co-founder of Public Knowledge, said, "Today's GAO report adds more evidence to the argument that any rules governing an open Internet should apply to the wireless sector as well as to the wired. The report paints a disturbing picture of an industry in which the top four carriers control 90 percent of the market, and industry consolidation is strangling smaller, regional carriers. The report shows the large companies continue to pile up advantages in gaining more spectrum, in exclusive deals for handsets and in locking in consumers with high termination fees. At the same time, there is the equally disturbing trend that the investments larger carriers are making in their networks are a smaller proportion of their service revenue than the expenses of smaller carriers. High special access rates imposed by the wireline affiliates of the larger carriers also hamper competition. These trends do not bode well for consumers, despite any benefits of the moment. The report shows the Federal Communications Commission (FCC) should act soon on a wide range of pending pro-consumer items, ranging from handset exclusivity to text messaging, in addition to making certain any policy on an open Internet includes wireless access as well."

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