Data Shows Wireless Market is Competitive, CTIA Says
CTIA, AT&T and Verizon Wireless urged the FCC to reverse course from the last two wireless competition reports and find in the 2012 edition that the industry is effectively competitive. Reply comments were due this week on a Nov. 3 Wireless Bureau public notice seeking data as it prepares the Sixteenth Annual Report on the State of Competition in Mobile Wireless. The 2011 and 2010 reports declined to find that the market is competitive. The arguments parallel many of those that dominated the debate over the AT&T/T-Mobile deal. There are no signs that the FCC will change the stance of the last two reports, both prepared under Chairman Julius Genachowski, agency officials concede.
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"The U.S. wireless market continues to be one of the most competitive and least concentrated markets in the world,” CTIA said (http://xrl.us/bmmjzi). “While the Herfindahl-Hirschman Index is one factor to be considered in evaluating concentration in a marketplace (note that the Herfindahl-Hirschman Index for the United States is lower than any other developed country), it does not measure competition, and it is not the only factor of relevance.” By mid-year 2011, U.S. wireless carriers made cumulative capital expenditures of more than $322 billion, CTIA said. The U.S. is now home to 21 percent of the world’s 3G and 4G subscribers and nearly 87 percent of its LTE subscribers, with 119 million 3G and 4G subscribers by year-end 2010 -- an increase of 19 million in a one-year period.
"Some commenters have alleged that the wireless ecosystem is concentrated, lacking any meaningful competition, but these assertions are based upon flawed analyses and unsupported by facts,” CTIA said. “CTIA urges the Commission to rely upon the record and make the appropriate finding that the mobile wireless market is subject to effective competition."
AT&T also said the FCC should term the market effectively competitive. “Every year, revolutionary new mobile devices, applications, and technologies relentlessly reshape the marketplace,” AT&T said (http://xrl.us/bmmj3v). “Quantity-adjusted prices -- for voice, messaging, and, most of all, data -- have plummeted for years. Network providers invest tens of billions of dollars each year to meet surging demand, despite a severe recession."
Verizon Wireless made a similar argument, rebutting what it called false claims that the market isn’t competitive (http://xrl.us/bmmj3z). “As in prior proceedings on the state of competition in the wireless industry, the few commenters who complain about the state of the industry fail to provide reliable facts or meaningful data to support their cases,” Verizon said. “These omissions are significant in a proceeding in which the Commission specifically asked for data and analysis regarding the marketplace."
But NCTA said the barriers to entry in the wireless market remain high for new competitors like cable companies (http://xrl.us/bmmj46). NCTA lists access to spectrum and roaming as the top barriers and urged the FCC to make more spectrum available for unlicensed use.