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FCC says US cellular competition getting worse

updated 03:45 pm EDT, Thu May 20, 2010

FCC annual report blames carriers

The FCC today criticized the US cellular industry in its Annual Report on Wireless Competition (PDF). Officials warned that the industry was rapidly consolidating around just two carriers, AT&T and Verizon, while even larger rivals like Sprint and T-Mobile were struggling. Combined, the top two have over 60 percent of subscribers and income where the third and fourth places were either losing subscribers or gaining relatively few.

"The Report confirms something I have been warning about for years -- that competition has been dramatically eroded and is seriously endangered by continuing consolidation and concentration in our wireless markets," FCC Commissioner Michael Copps said in his own statement. "We are going to need
an extra dose of vigilance going forward and use whatever policy levers we have available to ensure good outcomes."

Other parts of the study singled out an apparent stagnation of the business. AT&T and Verizon together own 91 percent of the regular cellular frequencies and just over two thirds of the 700MHz band to be used for 4G. Despite the market itself growing, investment either stayed the same or actually declined, the FCC said. Just 14 percent of carrier revenue is being spent on developing the network where it was 20 percent in 2005.

Some of the consolidation and slowdown came from the saturation of cellphones in the US, as 90 percent of those that can have cellphones already do; phone owners are also using more data than voice. However, the FCC also noted questionable practices meant to keep customers from switching, such as Verizon's doubled early cancel fee for smartphones. Most competition came through drops in unlimited access pricing as well as pricing at carriers like Sprint and Verizon, who repeatedly slashed smartphone prices to lure customers away from the iPhone.

Both individual carriers and the industry-controlled CTIA have already objected to the claims, making frequently repeated arguments that the industry is competitive and innovative.



By Electronista Staff
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Comments

  1. jameshays

    Fresh-Faced Recruit

    Joined: Mar 2003

    +1

    Who's to blame?

    Does the FCC blame the consumer for their choice? AT&T and Verizon for being arguably better than Sprint and t-mobile, or do they blame themselves for creating additional red tape and hurdles set so high that entering into a state of competition with these other carriers is futile?

    Have we finally hit a wall where our government is so engaged in extra-constitutional activities that it is no longer able to fulfill its constitutional duties such as holding fair elections, protecting our national assets and protecting our borders?

  1. Inkling

    Dedicated MacNNer

    Joined: Jul 2006

    +1

    Unlocking iPhones

    One simple step that the FCC could take would be to require Apple and AT&T to automatically unlock iPhones as soon as the original purchase contract expires. The phone's been paid for, it's sheer perversity to keep the lock on.

    That'd let iPhone users migrate from AT&T's pricey plans to the better deals at T-Mobile. And given the growing number of original and 3G iPhones that'll be available used, particularly when the next iPhone comes out, it'd be a boost at least to T-Mobile, which shares GSM with AT&T. People could have an iPhone and low cellular bills. And I might add that where I live in Seattle, T-Mobile is quite good. In four years, I've never had a dropped call.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: Unlocking iPhones

    One simple step that the FCC could take would be to require Apple and AT&T to automatically unlock iPhones as soon as the original purchase contract expires.

    How exactly is this going to help? Being the iPhone number is very small compared to overall phone usage, all this is giving a few people the ability to move to another carrier. It doesn't even help competition, since there's still the same number of carriers.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: Who's to blame

    Does the FCC blame the consumer for their choice? AT&T and Verizon for being arguably better than Sprint and t-mobile, or do they blame themselves for creating additional red tape and hurdles set so high that entering into a state of competition with these other carriers is futile?

    Red tape and hurdles? What red tape and hurdles? h***, they passed laws that basically remove local governments from blocking any cell towers. That's the biggest hurdle. After that, the only other one is money money money. It costs a lot to start cell coverage. There has to be expectations of profit to get into the game.

    Have we finally hit a wall where our government is so engaged in extra-constitutional activities that it is no longer able to fulfill its constitutional duties such as holding fair elections, protecting our national assets and protecting our borders?

    Seriously? What does any of that have to do with this? But, besides that point, exactly what is the gov't supposed to be engaged in? Handing out frequencies on the cheap to foster competition (you know, basically give away assets on the cheap in a corporate welfare sort of way)? Somehow force competition by increasing regulations and force companies to enter markets they have no desire to enter?

    And, in case you missed the memo, the gov't has NEVER protected our borders. It isn't that they are no longer able to. And if you they were able to protect our borders, you'd be complaining about all the money being spent trying to do just that. For the US has no problem spending close to a trillion dollars on "defense", but ask for a measly couple billion for customs and border patrol, and everyone's up in arms over spending and waste.

    Secondly, the federal government's does NOT hold elections, be they fair or unfair. States hold elections, and it is up to the states to make sure they are fair. The feds get involved only in cases where it is proven that the constitutional right to vote is being violated.

  1. Athens

    Addicted to MacNN

    Joined: Jan 2003

    0

    Solution

    Open up the Market in Canada and the US. Let Verizon, AT&T, Sprint, and T-Mobile into Canada. Same time let Telus, Rogers and Bell into the US. Should be a win win for every one.

  1. WiseWeasel

    Junior Member

    Joined: Apr 1999

    0

    An Actual Solution

    An actual solution is to have a national public wireless network with ubiquitous coverage, similar to the national highway system. Then, the competition is in the devices that can connect to that network, and the services that leverage it. The carriers are just private toll road operators, holding our economy and society back.

  1. Fast iBook

    Fresh-Faced Recruit

    Joined: Mar 2003

    +1

    More bars in more places...

    As an att user since mid 2005, i can say that service has improved. The roll out of the iPhone 3G made the network start to act weird, but they fixed it, and it has been improving since. I can get 5 bars in my house in most parts on 3G, and all most all of it on 2G. When i go out, voice quality is notably more stable than a few years ago, even in high EMF exposed areas such as an intersection with electrical supply and data/communication lines across all 4 sides, hilly and areas with dense foliage and odd geological formations such as iron deposits also have seen improvements. Since the middle of last year service has improved drastically in manhattan and across the river in NJ, former dead spots that showed to have 5 bars are no longer dead spots, even out at the edge of the piers on the river.

    - A

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