FCC Doesn't Call Mobile Wireless Industry Competitive

 
 
By Nathan Eddy  |  Posted 2010-05-21 Email Print this article Print
 
 
 
 
 
 
 

The Federal Communications Commission released a report on the mobile wireless industry that for the first time since 2002 failed to describe the industry as having "effective competition."

The Federal Communications Commission adopted its 14th annual report on the state of competition in the mobile wireless industry, omitting a statement that would have described the industry as effectively competitive. It is the first time since the FCC's 2002 report that the commission has failed to describe the industry as competitive. Unlike previous reports, which examined competition in the provision of CMRS (Commercial Mobile Radio Services), this year's report integrates CMRS into the broader mobile ecosystem, including mobile voice, messaging and broadband services. 

For the first time, the report also includes data on the many interrelated "upstream" and "downstream" market segments of the mobile ecosystem -- including spectrum, infrastructure and devices -- each of which has the potential to affect competition. The report, which reflects market conditions existing in 2008 and much of 2009, identifies key trends in the mobile wireless industry. The report found handset manufacturers have introduced a growing number of new smartphones -- 67 in 2008 and 2009 -- that provide mobile Internet access and other data services, and provide many of the functionalities of personal computers.

Data traffic has grown significantly, with the increased adoption of smartphones and data consumption per device. Especially as mobile wireless broadband usage grows, access to spectrum becomes increasingly important for competition. While many wireless service providers have access to significant amounts of mobile spectrum, most of the spectrum below 1 GHz, in both the cellular band and the 700 MHz band, is not widely held, the report noted. The FCC also noted there appears to be increasing concentration in the mobile wireless market. One widely used measure of industry concentration indicates that concentration has increased 32 percent since 2003 and 6.5 percent in 2008.

"In so many ways, this explosion of mobile innovation is great news for American consumers. Perhaps no sector of our economy holds more promise for 21st century U.S. leadership in innovation and investment than wireless broadband," said FCC chairman Julius Genachowski. "The new trends do also present real challenges for busy American families when it comes to selecting the mix of mobile devices and services that matches their needs and budgets. Indeed, in difficult economic times such as these, the importance of empowering consumers and promoting competition is especially great."

The report also noted providers continue to invest "significant capital" in networks, despite the recent economic downturn. One source reports capital investment at around $25 billion in both 2005 and 2008, while another shows that capital investment declined from around $25 billion to around $20 billion during the same period. Because industry revenue has continued to grow, both sources show that capital investment has declined as a percentage of industry revenue over the same period (from 20 percent to 14 percent).

 
 
 
 
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.
 
 
 
 
 
 
 

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