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FCC noncommittal in wireless competition report

Tue, 06/28/2011 - 8:00am
Maisie Ramsay, Wireless Week

The FCC issued a metaphorical "no comment" in its annual report on the state of competition in the wireless industry, saying the industry was too complex to apply a "blanket label" on whether it remained competitive.

The agency stated that "it would not be meaningful to try to make a single, all-inclusive finding regarding effective competition that adequately encompasses the level of competition."

"It would be overly simplistic to apply a binary conclusion or blanket label to this complex and multi-dimensional industry," the FCC said in its report released yesterday.

While the FCC refrained from saying the wireless industry had grown less competitive, it did report that the industry had become increasingly concentrated, citing metrics from the widely accepted Herfindahl-Hirschman Index. The FCC refrained from finding that "effective competition" existed in the wireless industry in last year's report.

The 304-page report provided few clues as to how the FCC would rule in its review of AT&T's merger with T-Mobile USA. Speaking in general terms, the FCC stated that the "exit of service providers – whether through mergers, acquisitions, or discontinuance –affects the structure of the mobile wireless market and potentially exerts both negative and positive effects on competitive performance and consumer welfare, depending on details of the pre- and post-exit competitors in the market."

FCC Chairman Julius Genachowski did not provide a statement on the report, but Commissioner Michael Copps expressed concerns.

"I cannot ignore some of the darkening clouds over the state of mobile competition," he said in a statement. "The headline for this Report will be that the FCC neither finds nor does not find effective competition. Dig deeper and, sure enough, we find ongoing trends of industry consolidation."

FCC Robert McDowell had a different interpretation. "At its core, the report shows that the wireless sector is dynamic, ever-improving and responsive to consumer demand," he said in a statement.

CTIA President and CEO Steve Largent said in a statement that he had not yet read the entire report, but a "cursory review" of its findings left him optimistic.

"While CTIA again wishes they would have concluded effective competition existed in 2009, consumers clearly enjoyed more advanced handsets, an ever-expanding range of services and applications and more robust networks, even as the Bureau of Labor Statistics reported that prices decreased," he said. "The report showed a multitude of facts and figures that proved the wireless ecosystem continues to work for America and Americans."

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