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Wednesday, May 19, 2010

FCC Wireless Report Should Conclude Market Competitive, But Will It?
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Rumor has it that that the FCC plans to drop its Wireless Competition Report tomorrow at its monthly meeting. In the past, this report has generally signaled that the market thrives. Tomorrow may tell a slightly different story, however. There is some belief that the Commission may come back on its past report cards, concluding - somehow - that the wireless marketplace is shy of "effective competition," though not uncompetitive.

Some in the telecom community believe that the FCC may be attempting to build a record to justify a more expansive regulatory push for wireless broadband competition. Stranger theories have been heard. The FCC's on a tear of late, trying to perfect broadband markets so that consumers get..well, the thriving market they already have. This could be another such exercise.

Policymakers have long held that the wireless regulatory model succeeds for consumers. Past FCC Chairman, Kevin Martin, noted as far back as 2005:

You know, the wireless industry has been one of the great success stories from the Commission's point of view. Today, more than 90 percent of consumers live in areas with at least three wireless providers. Consumers benefit from these competitive alternatives in the marketplace. They will only benefit more as other new services come to market.

Boy, will they.

Minimal regulation - that is, the lack of government intrusion - has led to explosive, sustained growth in the primary, adjacent and edge markets. How? The Commission has avoided foisting upon providers truly onerous common carrier regulations, like the type they now propose to place on ISPs with FCC Chairman Genachowski's "Third Way" reclassification of broadband.

Contrary to what we hear the FCC might reveal tomorrow, the market has well-surpassed its statutory benchmark of "effective competition." In fact, through numerous independent sources (some of which are government bodies), the CTIA concludes that the U.S. wireless market is the world's most innovative and competitive.

Here's why:

  • In 2009, we invested approximately $20 billion in infrastructure, more than the five largest European countries combined (at ~$18 billion).

  • Americans can get more than 240,000 wireless applications from seven different "stores," covering seven different platforms.

  • Close to 260 million data-capable devices sit in consumers' hands today; 50 million or more are smartphone or wireless-enabled PDAs.

  • Americans can choose from 630 different types of cellphones, manufactured by 32 companies.

  • 65% of Americans can choose from five or more facilities-based providers.

  • America's largest cities have more than 14 facilities-based and non-facilities-based choices; for the smallest U.S. towns, 80% have a similar palette of options.

  • For OECD countries, only the U.S. and Canada have more than five providers.

  • 3G services now span more than 92% of the American population, with more than 123 million 3G subscribers in the U.S.

Sure, as Verizon's Howard Woolley says in his blog, the wireless market's report card isn't straight "A's". But, it can't be too far off that mark. Clearly, competition, innovation and consumer choice abound. This has happened because of something the FCC has chosen not to do - heavily regulate.

One hopes the FCC realizes this and avoids rapping the industry's knuckles with the potential for stultifying rules and regulations.

posted by Mike Wendy @ 3:58 PM | Broadband , Communications , Innovation , Net Neutrality , The FCC , Wireless , Wireline

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