CTIA Urges FCC To Reverse Course on Competitiveness of Wireless Industry
The U.S. is the “epicenter of wireless innovation and competition” and the FCC should find that the industry is effectively competitive, CTIA said in comments as the agency prepares its annual report on the state of competition in mobile wireless. Every Obama administration FCC has made the same finding of a lack of competition in the U.S. market (see 1512300048). The past two years, the Wireless Bureau issued the report on delegated authority without a vote of the commissioners. Industry observers said Wednesday this final report of the Obama administration is likely to draw the same conclusion. Comments were filed in docket 16-137.
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CTIA said more than 99 percent of Americans now can connect to 4G LTE service from at least one provider, and 82 percent can choose from four or more providers. North American wireless customers used more data per subscriber in 2015 than was used in any other geographic region, it said. Capital expenditures by wireless providers increased 7.4 percent from 2014 to more than $462 billion in 2015, the group said. “It is thus not surprising that the U.S. continues to be the source of most of the world’s leading technology companies and innovators.” CTIA said 74 percent of the companies that make up the $120 billion “app economy” are based in the U.S.
Like earlier-filed comments, the new ones also split about whether wireless is competitive (see 1605310049). CTIA urged a light hand in regulating unlicensed. “For decades, the FCC wisely applied a light touch and avoided unnecessary regulation of unlicensed technologies,” CTIA said. “Those policies have been eroded under this Commission, stalling the deployment of innovative, spectrum-efficient, consumer-friendly services that have heretofore been the hallmark of unlicensed spectrum. Going forward, the FCC should return to its practice of allowing permissionless innovation in the unlicensed bands by allowing the wireless industry to manage the coexistence of unlicensed LTE, Wi-Fi, and other Part 15 operations.”
AT&T told the FCC the wireless industry is only becoming more competitive. “Wireless carriers compete vigorously on price, both by lowering the price of service plans and by giving consumers more for their money,” AT&T commented. “Not only are service plans getting less expensive and more inclusive, but Equipment Installment Plan programs are making it easier for consumers to get the newest devices without a long-term contract.” Providers also are expanding their networks, the carrier said. “Over the past year, carriers have further expanded their 4G LTE deployments and are taking other steps to increase network speed, efficiency, and capacity. These improvements have driven increased mobile adoption and data usage.”
But the California Public Utilities Commission said wireless coverage is still poor in rural areas. “One-way streaming video service substantially degrades when the user moves from urban to rural areas,” the CPUC said. “This degradation is characterized not only by a decrease in video quality, but also by a dramatic increase in locations with no video capability at all.”
For AT&T, the number of locations with no video increases from 5 percent in urban areas to 23 percent in rural areas, the CPUC said. For Verizon, customers can’t stream video in 4 percent of urban locations, versus 22 percent of rural. Sprint and T-Mobile see a similar fall-off in coverage -- 10 percent versus 23 percent for Sprint, 7 percent compared with 29 percent for T-Mobile, the agency said.
The Rural Wireless Association said the report should track a number of trends that affect competition. Among them is that the slow implementation of voice-over-LTE service “will require availability of legacy CDMA and GSM networks for some time to ensure universal voice coverage,” RWA said. “Despite the growing use of LTE networks that provide high-speed mobile data services, carriers of all sizes continue to rely on 3G or even 2G CDMA and GSM networks to provide mobile voice services, especially in non-urban, sparsely populated markets.” The report also should track buildout trends, RWA said. “With respect to many parts of rural America, nationwide providers tend to focus coverage only on towns and major highways, and they often place sparsely populated areas at the very bottom of their network upgrade list,” the group commented.
The industry is competitive, but the FCC should act to make it more so, said the Wireless Infrastructure Association, the new name for PCIA. While the FCC has made progress lowering barriers to deployment, “WIA’s membership still faces obstacles at the federal, state, and local levels that require further examination by policymakers,” the group said. “As to macrocell deployments, policymakers must continue regulatory efforts to encourage collocation of facilities.”
Same Conclusion?
Critics of the FCC’s recurring decision not finding the wireless industry competitive said Wednesday they expect a similar conclusion in the upcoming report.
Former Commissioner Robert McDowell voted against the first competition report, in 2010, that didn't find effective competition (see 1005210135). "Since the change from the Bush to the Obama administrations, the FCC has consistently maintained its posture of declining to find the wireless market to be competitive,” said McDowell, now at Wiley Rein. This stance has helped “lay the pretext for many new regulations in the wireless space that would be harder to justify if the reports had found the market to be competitive,” he said. “It's hard to imagine that they'd reverse course again this time around because they would be undermining their own premise."
“After a while if you ignore a pattern of conduct, you’re just being foolish,” said Randolph May, president of the Free State Foundation. “In this case, we can predict with a high degree of certainty that the commission will claim it can’t make a finding that the wireless market is effectively competitive.” Few “knowledgeable observers take seriously” claims the current FCC is data driven, he said. “I don’t think Chairman [Tom] Wheeler himself even claims the commission is data-driven any longer,” May said. “This pattern of ignoring actual marketplace developments to advance an outdated pro-regulatory agency damages the FCC’s institutional integrity.”
“Last year, the FCC found the market for pay TV effectively competitive for the first time and limited the power of franchise authorities to regulate rates, so we could see some movement in the mobile marketplace,” said Richard Bennett, free-market blogger and network architect. “Wheeler’s recent NPRMs have been so one-sided against the carriers that he may feel the need to balance the scales a bit, like an umpire making up for a blown call by calling one in favor of the other team. But it’s an election year, so I expect the status quo to continue.” The FCC didn't comment.