The Federal Communications Commission (FCC) determined the US mobile market is competitive, marking a stark change of tune from years past.
Its conclusion was drawn in the 20th Mobile Wireless Competition Report, which was approved Tuesday (26 September) by the FCC’s Republican majority despite objections from both of the body’s Democratic commissioners.
As noted by Garnet Hanley, chief of the Competition and Infrastructure Policy Division of the FCC’s Wireless Telecommunications Bureau, the latest report shifted its focus to examine only competition in the provision of wireless services rather than in the broader mobile ecosystem. In coming to its conclusion, Hanley said the new analysis took into account such factors as rising consumer demand and increased industry output, falling prices, network investments, improved network quality as measured by download speeds, increased spectrum availability, and industry-wide innovation.
For instance, the report indicates the mean LTE download speed increased from 14.4Mb/s in the first half of 2014 to 23.5Mb/s in the first half of 2017. The document also cites the return of unlimited data plans as an indicator of “pricing pressure” on US operators.
As of the end of 2016, the study found Verizon subscribers accounted for 35 per cent of mobile market share. AT&T was in second place with 32.4 per cent market share, T-Mobile in third with 17.1 per cent and Sprint in fourth with 14.3 per cent. Together, the top four operators offer service to more than 98 per cent of US subscribers.
“The 20th report concludes that competition continues to play an essential role in the mobile wireless marketplace, leading to lower prices, more innovation, and higher quality service for American consumers,” Hanley said.
The commission’s three Republican members praised the report. Chairman Ajit Pai said the document presented “strong, incontrovertible” evidence of competition in the US market. Commissioner Michael O’Rielly similarly lauded what he deemed the report’s “rightful” conclusion, but noted there’s still “room for improvement”.
However, Commissioners Mignon Clyburn and Jessica Rosenworcel objected to the finding on the basis that the report’s analysis of the market was incomplete. Clyburn noted that while 5G buzz is rampant on Capitol Hill, millions of citizens remain without access to “reliable and affordable” 3G service.
“This (report) is like a doctor looking at one organ and pronouncing the patient to be as fit as a fiddle,” Clyburn said, adding: “I can neither understand nor condone why the majority used a truncated analysis to reach this conclusion.”
Similarly, Rosenworcel said the report suffered a “fatal flaw” because it never actually defined what “effective competition” entails.
“If you add this up, this Commission is making a determination about the state of competition in one of the most vital sectors of the new economy, using a standard that calls to mind Potter Stewart’s famous ‘I know it when I see it’,” she said. “That’s not good enough.”
The decision is also likely to upset groups like the Competitive Carriers Association (CCA), which represents smaller and rural operator interests in the country. CCA long called on the FCC to recognise what it calls a lack of competition in the mobile market.
As the competition report was being drafted in May, CCA CEO Steven Berry issued a statement urging the Commission to recognise the “unfortunate reality that many parts of the country do not receive, much less have competitive choice for, mobile wireless service.”
“The fact-of-the-matter is that competition is not present nationwide and varies significantly by geographic location, and it is high-time the Commission makes a conclusion to that effect,” he said at the time.