So, the GAO recently released a report on the wireless industry and found that:

The biggest changes in the wireless industry since 2000 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. Nevertheless, consumers have also seen benefits, such as generally lower prices, which are approximately 50 percent less than 1999 prices, and better coverage.

Now, if you are a self-described "consumer advocate," I would hope the bottom line here is pretty straightforward and refreshing: Prices fell by 50% in 10 years. That alone is an amazing success story. But that's not the end of the story. The more important fact is that prices fell by that much while innovation in this sector was also flourishing. Do you remember the phone you carried in your pocket -- if you could fit it in your pocket at all -- ten years ago? It was a pretty rudimentary device. It made calls and... well... it made calls. Now, think about the mini-computer that sits in your pocket right now. Stunning little piece of kit. It can text. It can do email. It can get Internet access. You can Twitter on it. Oh, and you can still make calls on it (but who wants to do that anymore!)

The point is, this is a great American capitalist success story that everyone -- especially "consumer advocates" -- should be celebrating. So, what does Public Knowledge president Gigi Sohn have to say?

"These trends do not bode well for consumers, despite any benefits of the moment," she told Ars Technica.

Wait, what?

Praise the Lord and pass the ammunition.

So goes the FCC's stacked "706 Report" on broadband this week, which said that Americans aren't getting broadband in a "reasonable and timely basis," the first negative conclusion since the report's inception.

Using the standard developed in the National Broadband Plan (NBP) - which recommends "that every household in America have access to affordable broadband service offering actual download (i.e., to the customer) speeds of at least 4 Mbps and actual upload (i.e., from the customer) speeds of at least 1 Mbps" - the Commission determined that by this benchmark "broadband remains unavailable to approximately 14 to 24 million Americans." (Not that 14 - 24 million Americans don't have high-speed access, as has erroneously been reported.)

The FCC is building its war chest so that it can justify Lilliputian Internet regulation of network providers. Through a number of recent proceedings, statements and reports - e.g., the Open Internet NPRM, Cellular Competition Report, and "Third Way" NOI - the 706 Report traffics in the same meme: network providers just aren't doing their job, so they must be coerced or shamed into proper "compliance."

Not uncharacteristically, The Free Press heralded the new, rather dour (and now redundant) broadband assessment. Said the lugubrious, special interest lobbyists - "Now that the FCC has taken the first step of acknowledging America's broadband problem, we hope that it will advance policies to reverse this decline though the promotion of real competition and true consumer choice."

Julius Genachowski claims his "Third Way" approach to taking over the Internet looks a lot like the benign "wireless model" of regulation.

If it were true, that would be a good thing.

According to Genachowski:

In its approach to wireless communications, Congress mandated that the FCC subject wireless communications to the same Title II provisions generally applicable to telecommunications services while also directing that the FCC consider forbearing from the application of many of these provisions to the wireless marketplace. The Commission did significantly forbear, and the telecommunications industry has repeatedly and resoundingly lauded this approach as well-suited to an emerging technology and welcoming to investment and innovation. In short, the proposed approach is already tried and true.

Presumably, the "wireless model," if applied to the Internet, would spur growth and innovation. But I have a question. In the FCC's NOI, how does the wireless model of "light regulation" apply to, er, the wireless model?

I haven't quite figured out the circularity of that one yet.

Oh, well. Maybe I shouldn't waste my time trying. It seems more apparent than ever that for wireless and wireline broadband service it's not really about regulating "downward" - i.e., deregulating, as is the hallmark of the "wireless model" - but instead, regulating "upward," thus adding regulation.

Don Kellogg, Senior Manager, Research and Insights/Telecom Practice at The Nielsen Company, has a interesting essay up over at the Nielsen Wire about smartphone competition. ("iPhone vs. Android") It includes some updated quarterly data about the state of the mobile marketplace and, once again, I am just blown away at the continuing degree of operating system (OS)-level competition.

As I have noted here before, this war among Apple, Google, Microsoft, RIM (Blackberry), Palm, Symbian, and others has actually forced me to ask if we have "Too Much Platform Competition" in this arena. App developers must now craft their offerings for so many platforms that it has become a significant developmental hassle and expense. But hey, from a consumer perspective, this is great! (For more details, see Berin's post on "The Fiercely Competitive Mobile OS & Device Markets.")

Regardless, it's still more proof that all the hand-wringing here in Washington about the state of wireless innovation is completely unfounded. It is shocking that we have this many developer platforms in play in the smartphone sector and I am still of the belief that things will eventually shake out to just 3 major OSs. So I don't expect this degree of competition to last. But that's OK, we can still have plenty of competition and innovation with fewer OSs.

Just the other day, leaders from the House and Senate said they planned on updating the Communications Act. Maybe they've finally started listening to us - we proposed doing this back in 2005, with PFF's Digital Age Communications Act (DACA). Or, perhaps the FCC's so-called "Third Way" doesn't look like the "no-brainer" that the agency spun in its press releases. Well, whatever their intentions may be, it certainly couldn't arrive at a better time.

The framing is all important, of course. Art Brodsky of Public Knowledge (ostensibly one of the groups "writing" the next Act) says Americans shouldn't worry about the FCC's "Third Way." In his view - "The government is not taking over the Internet. What the government is doing is engaging in traditional consumer protection, traditional regulation of a telecommunications service that will get people to the Internet." PK seems happy with this model - whether done at the FCC, or at Congress' hands.

Hmmm...Getting people to the Internet? Traditional, simple stuff. Sort of like strolling to the store, or peddling to the park. Or, like in childhood, making a call from tin cans and string - which is what'll result if PK and their ilk have their way.

I've been wading through the FCC's latest Mobile Wireless Competition Report, and articles about it trying to make sense of what the the agency might be up to on this front. It's hard to get a read on where the agency may be going here. As my PFF colleague Mike Wendy suggested in his post on the FCC's report, "far from press reports which state the FCC clearly determined the market is not 'effectively competitive,' well, that's wrong. In fact, the FCC fails to make any such determination whatsoever." Moreover, just flipping through the charts and tables of the 237-page report, one is struck by how dynamic this marketplace is, and how crazy it would be for the FCC to declare it anything other than effectively competitive and highly innovative.

Yet, the FCC and many others seem hung up on industry structure. In particular, there seems to be a lot of hand-wringing about increasing consolidation among the sector's top players. But the data the FCC reproduces in the report seem to undermine that concern. For example, here's a snapshot of the "Mobile Market Structure in Selected Countries," which appears on pg. 197 of the FCC report. It shows how much more consolidated foreign mobile markets are relative to the U.S., which is true of wireline markets too. And you can find much more evidence of how competitive the marketplace is in these two reports.

As I peruse the FCC's just released Wireless Report, I wanted to jot down some initial thoughts before wading knee-deep in the regulatory morass.

First off - far from press reports which state the FCC clearly determined the market is not "effectively competitive," well, that's wrong. In fact, the FCC fails to make any such determination whatsoever. It says:

...[R]ather than reaching an overarching, industry-wide determination with respect to whether there is "effective competition," the Report complies with the statutory requirement by providing a detailed analysis of the state of competition that seeks to identify areas where market conditions appear to be producing substantial consumer benefits and provides data that can form the basis for inquiries into whether policy levers could produce superior outcomes...

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.

Google has just announced that it is ending web-only sales of its unsubsidized Nexus One smartphone. The company had hoped to created a very different kind of business model for mobile phone retailing, but it just didn't work and so they are ending the experiment.

There are a couple of reasons that it probably didn't work, but the one thing that just about everyone is pointing back to is the difficulty of acclimating Americans to the actual cost of an unsubsidized handset. Over at Ars Technica, Peter Bright points out:

A one-off payment of $529 is hard to stomach. In many countries, we're not accustomed to paying so much for mobile phones, as normally their true cost is hidden--we pay less up front and commit to paying a monthly fee for 12-24 months. Only those brave souls who were willing to stump up for the early termination fee would get any idea of the true cost of their handset. In a world of subsidized handsets, then, the Nexus one felt very expensive. It's true that SIM-only contracts are cheaper than with-handset ones, but the difference rarely feels significant enough to justify buying a full-price phone--much better to pay a little bit more each month and avoid the up-front cost. Even if you do the math and work out that the Google way is cheaper, there's still the unpleasant prospect of spending so much at once.

And Kevin C. Tofel of GigaOm concludes:

PFF was fortunate enough to get a letter-to-the-editor published in the NY Times this weekend, responding to the paper's call for broad Net Neutrality rules which would regulate broadband services.

Regulate the Internet?

To the Editor:

In "The F.C.C. and the Internet" (editorial, April 19), you ignore two important facts to arrive at your sweeping conclusion that the Federal Communications Commission must regulate the Internet to ensure its health and growth.