US telecoms watchdog the Federal Communications Commission published its latest Mobile Wireless Competition Report, which disappointed observers looking for clues as to how it may view the proposed merger of AT&T and T-Mobile USA. It said that the current study – its 15th – “makes no formal finding as to whether there is, or is not, effective competition within the industry.”  The wide-ranging reported noted both the positive and negative effects of mergers, stating that “ If the cost savings generated by consolidation endow the merged provider with the ability to compete more effectively, consolidation could result in lower prices and new and innovative services for consumers. However, if the consolidation substantially increases the size of the firm, there may be reduced competitive pressure on the firm, potentially leading to higher consumer prices and/or lower incentive to improve its consumer services.”

In a statement, FCC commissioner Michael Copps (pictured) warned that: “I cannot ignore some of the darkening clouds over the state of mobile competition. The headline for this report will be that the FCC neither finds nor does not find effective competition. Dig deeper and, sure enough, we find ongoing trends of industry consolidation. The well-accepted metric for market concentration, the Herfindahl-Hirschman Index, remains above the threshold for a “highly concentrated” market. It also appears that consumers are no longer enjoying falling prices, according to the CPI [consumer price index] for cellular services. We know there is a looming spectrum crunch and a growing need for backhaul. There is no doubt that the mobile market is an American success story, and there are many ways to measure industry health. But it would be foolish and decidedly not in the public interest to ignore the facts this report reveals.”