Posted by: Joan Marsh on May 20, 2010 at 12:34 pm
Occasionally, a conclusion is reached that is so unhinged from the facts that it defies explanation. So it is with the 14th Edition of the Mobile Wireless Competition Report released today by the FCC.
Actually, it was not a conclusion in this case that baffles, but the lack of one. After reviewing an extensive record that demonstrates robust and even cut-throat competition in almost every facet of the US wireless industry, the FCC decided that it would not, as it has in the past, draw any conclusion about whether the U.S. wireless industry was effectively competitive.
Why should things have changed so suddenly?
It’s not the industry. On almost every measurable indicator, the U.S. leads the world in wireless investment, deployment, penetration and innovation. What is driving the investment and innovation? Robust competition in the U.S. wireless market. And despite uncertain economic times, carriers continue to invest billions of dollars in upgrading their networks – more than $20 billion in both 2008 and 2009.
It’s not a lack of choice. The U.S. continues to have four national carriers – a level of competition most European countries envy – three large regional providers, and dozens of smaller providers. Most U.S. consumers continue to have at least five different providers from which to choose. The Organization for Economic Cooperation and Development (OECD) states that the U.S. wireless market is the least concentrated among 26 industrialized nations.
It’s not price. The per-minute cost of calls for U.S. customers is 62 percent lower than the average of the other 25 countries tracked by OECD. No wonder Americans’ usage is higher.
At the most basic and intuitive level, to appreciate the intense competition in the industry one only needs to drive down the street and look at the numerous ads in window displays, on billboards and on the sides of buses, clamoring for consumers’ attention. Just read the Sunday paper in any major city (those of you not old enough to enjoy a Sunday paper, substitute “pop up ads on a popular website”) to see multiple full-page ads from wireless operators touting their most recent promotions and deals designed to lure customers away from their competitors and into their stores. Consider the ever present TV ads.
Yet despite all this, the FCC, for the first time since 2003, failed to conclude that the U.S. wireless industry is effectively competitive. Dewey defeats Truman.
Some contend that because the Report has no decisional authority, that it isn’t that important. I disagree. The FCC’s Competition Report will be used as a basis for policy discussions in Washington D.C. and in our state capitals. Its analysis and conclusions (or lack of them) are very important. Policy decisions premised on selected facts or erroneous conclusions can and will undermine the incredible successes achieved by the U.S. wireless industry to date. And that is a conclusion that none of us wants to see.
