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Press Release
FCC Report Offers No Definitive Conclusions About Wireless Competition
Contact: Timothy Karr, 201-533-8838
WASHINGTON -- On Monday, the Federal Communications Commission released its annual report on the state of mobile wireless competition.
The 2011 report recognized once again that the wireless market is becoming increasingly consolidated, with a large and growing disparity between the top two companies, AT&T and Verizon, and all other providers. The report also illustrated that as consumers become more dependent on mobile broadband and smartphones, total prices for voice plans and data plans are not decreasing.
Despite these findings, the FCC made no definitive conclusions about the competitiveness of the market, and did not offer comprehensive recommendations to promote wireless competition. As it did last year, the Commission merely refused to find that the current level of competition is good enough, but went no further in its critique.
Free Press Policy Director Matt Wood made the following statement:
“We are disappointed that the FCC failed again to state clearly and conclusively that the wireless market is not effectively competitive, despite its own evidence. This conclusion should be glaringly obvious, and the Commission’s willingness to stick its head in the sand is not going to make the problem go away. Refusing to bless the current level of competition is a step in the right direction, but it's not enough.
“Many barriers stand in the way of effective competition in the wireless market. Special access costs and disparities in spectrum holdings harm competitive providers and their customers, while exclusive deals for the most popular handsets and punitive early termination fees bind consumers to unsatisfactory service. All of these lead to higher profit margins for AT&T and Verizon, but a broken market for consumers.
“The simple fact is the wireless market is not competitive. Verizon and AT&T have leveraged their positions as legacy monopolists to dominate other providers. Together, they control nearly two-thirds of all subscribers, and an even higher level of the market's revenues. The trends are only getting worse for smartphones and data service. And if AT&T’s takeover of T-Mobile is approved, all hope of real competition will be gone.
“Competition is on life support today. The FCC should treat the problem by promoting better competition policy, not pull the plug by approving the AT&T-T-Mobile merger.”
The 2011 report recognized once again that the wireless market is becoming increasingly consolidated, with a large and growing disparity between the top two companies, AT&T and Verizon, and all other providers. The report also illustrated that as consumers become more dependent on mobile broadband and smartphones, total prices for voice plans and data plans are not decreasing.
Despite these findings, the FCC made no definitive conclusions about the competitiveness of the market, and did not offer comprehensive recommendations to promote wireless competition. As it did last year, the Commission merely refused to find that the current level of competition is good enough, but went no further in its critique.
Free Press Policy Director Matt Wood made the following statement:
“We are disappointed that the FCC failed again to state clearly and conclusively that the wireless market is not effectively competitive, despite its own evidence. This conclusion should be glaringly obvious, and the Commission’s willingness to stick its head in the sand is not going to make the problem go away. Refusing to bless the current level of competition is a step in the right direction, but it's not enough.
“Many barriers stand in the way of effective competition in the wireless market. Special access costs and disparities in spectrum holdings harm competitive providers and their customers, while exclusive deals for the most popular handsets and punitive early termination fees bind consumers to unsatisfactory service. All of these lead to higher profit margins for AT&T and Verizon, but a broken market for consumers.
“The simple fact is the wireless market is not competitive. Verizon and AT&T have leveraged their positions as legacy monopolists to dominate other providers. Together, they control nearly two-thirds of all subscribers, and an even higher level of the market's revenues. The trends are only getting worse for smartphones and data service. And if AT&T’s takeover of T-Mobile is approved, all hope of real competition will be gone.
“Competition is on life support today. The FCC should treat the problem by promoting better competition policy, not pull the plug by approving the AT&T-T-Mobile merger.”
