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FCC Report Doesn't Conclude Wireless Industry Is Competitive

The FCC Thursday released its 16th wireless service
competition report, and as with the previous two reports, it drew no conclusion
on whether the marketplace is competitive.

The FCC has similarly declined to declare the video service
marketplace competitive in a similar report.

The latest wireless report is based on data from 2010 and
2011, plus some from 2012.

Neither Republican commissioner said they could support the
FCC's decision not to make a determination about competition, saying Congress
had instructed it to do so.

"Congress tasked us with making a finding as to whether
this sector is competitive," said commissioner Robert McDowell. "Clearly,
it is. For this reason, I vote to concur to the Sixteenth Mobile Wireless
Competition Report, as I have for the last two reports."

"I cannot approve today's report in every respect
because it does not carry out all the tasks that Congress has assigned
us," said commissioner Ajit Pai. "Specifically, Congress has directed
us to include in our annual wireless competition report 'an analysis of whether
or not there is effective competition.' The report simply does not do this. To
be sure, some might not like answering this question. But the Communications
Act does not give us the discretion to dodge. The binary choice of yes or no
doesn't countenance a hedge based on 'the complexity of the various
inter-related segments and services within the mobile wireless ecosystem. '"

Wireless industry representatives were not pleased. The
Internet Innovation Alliance suggested the FCC was setting the industry up for
future regulation. "Rather predictably, the FCC has once again avoided
concluding that the wireless market is competitive, despite the fact that four
out of five consumers have a choice of five or more wireless service providers.
In 2010, the Commission reversed the findings of six successive reports that
acknowledged the mobile market's success...The Commission is painting a picture
of the market with this shade of gray to leave room for justification of future
wireless regulation."

"The FCC report demonstrates that four out of five Census
blocks have more choices for a wireless provider than they have for peanut
butter in the grocery store, that revenue per minute continues to decline, and
that capital expenditures by the providers continue to rise despite the soft
economy.  And yet they're unwilling to declare the industry competitive,
despite these obvious symptoms of competition," said Ev Ehrlich, president
of ESC Company and former Undersecretary of Commerce in the Clinton
Administration. "Readers of the report should bypass this evasive
conclusion and judge the evidence for themselves."

CTIA president Steve Largent said it sure looked
like a competitive marketplace from his vantage point. "A cursory glance
of the FCC's 16th Annual Mobile Wireless Competition Report, released late last
night, reveals a wealth of data that clearly highlights the innovation,
investment and competition that epitomizes the U.S. mobile wireless
ecosystem," he said. "We believe that a clear-eyed assessment of the
level of investment, network deployment, world-leading operating systems,
devices, applications and services conclusively demonstrates the value and
benefits that consumers and businesses receive from the U.S. wireless industry.
In this respect, we regret the Commission missed an opportunity, again, to make
a finding about the robust level of competition that consumers enjoy in the