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FCC wireless report shows less market competition, spurs debate over FCC response

The Federal Communications Commission said that the wireless industry has become more concentrated and that consumers are sharply increasing their use of text messaging and Internet data services on cellphones.

Those trends had commissioners calling for greater scrutiny over competition in the cellphone industry and two Republican regulators warning against further rules.
In its open meeting today, the FCC’s wireless bureau released its annual competition report and said the concentration of the mobile industry has increased 32 percent in 2009 from 2003. The same measure of industry consolidation increased 6.5 percent since 2008.

“So without denying those things that are right in the wireless world – and they are many – the facts also tell us that some things are not right,” Democratic Commissioner Michael Copps said. “We are going to need an extra dose of vigilance going forward and use whatever policy levers we have available to ensure good outcomes for American consumers.”

Republican members of the FCC warned against using the report to extend new rules. One rule that has been hotly contested is net neutrality – which the wireless industry has argued against because of the capacity constraints of wireless networks.

The report “appears to lay the foundation for more regulation,” said Robert McDowell, a Republican member. “I cannot support the theory that government policy would produce better results than the market.”

FCC Chairman Julius Genachowski said in the meeting that the results of the report weren't definitive on the question of competition.

“This report does not seek to reach an overly simplistic yes-or-no conclusion about the overall level of competition in this complex and dynamic ecosystem, comprised of multiple markets," he said. "Instead, the report complies with Congress’s mandate to assess market conditions by providing data on trends in competition and choice over time.”

By Cecilia Kang  |  May 20, 2010; 11:58 AM ET
Categories:  Broadband , FCC  
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