FCC wireless competition report triggers debate over role of regulation

The report found that consumers are using smartphones more than ever, especially for data services like e-mail and Web browsing. At the same time, however, the FCC concluded that mobile indistry has become far more concentrated and consolidated since 2003.

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Commissioner Michael Copps during the meeting lamented the latter conclusion as a sign that the industry faces a competition conundrum. He said the report's findings ought to "flash a bright caution light as we go about the business of advancing competition in the broadband age."

"A robust wireless future ... depends on robust competition," he said upon the report's presentation. However, he added, "competition has been dramatically eroded and is continually endangered."

Echoing Copps' concerns was Commissioner Mignon Clyburn, also a Democrat, who fretted that competition remains insufficient in rural areas, where often only one or two providers serve entire areas.

Republican Commissioner Robert McDowell challenged not only his colleagues' conclusions, but their suggestions that the FCC ought to wade into the mobile industry again in an attempt to promote competition among providers. He expressed concern that the report "appears to lay the foundation to support new regulation," under the incorrect impression that government policy can produce "a better result."

"If nothing else, the report shows the wireless sector is dynamic, ever improving and responds to consumer demand, so we all should tread cautiously — especially industry players," he said. He pointed out that more consumers than ever have access to more than three phone providers, which fellow Republican Commissioner Meredith Attwell Baker repeated in her remarks.

But as debate played out within the FCC, top mobile phone carriers and public-interest groups drew their own battle lines over competition and the need for the FCC to regulate it.

Verizon promptly stressed following the conclusion of Thursday's open meeting that the United States "has the most intensely competitive wireless market on the planet, and it's becoming more competitive by the day."

Others, including AT&T, said it was "disappointing that this FCC seems reluctant to acknowledge the market’s success," and questioned whether the report raised the specter of unwanted federal oversight.

“In fact, wireless may well be the most competitive industry in America, and it is certainly the most competitive wireless market in the world," said AT&T's Robert Quinn, senior vice president of federal regulatory. "Because the FCC’s decision is a dramatic break from years of solid precedent, we can’t help but worry that this seems intended to justify more regulation in a market where it is clear beyond doubt that regulation is simply unwarranted.”

But critics of the nation's largest mobile phone carriers seemed to rejoice at the early signs the FCC may soon take action in the mobile phone realm. Free Press, which has long called on the agency to use its federal powers to spur industry competition, said its leaders maintain "hope that the Commission will follow this report, and the many notices and letters the agency has issued, with immediate action to remedy these problems.

"The agency should initiate policies and rules that foster competition and innovation and create an environment where wireless carriers have to compete with one another over service price and quality," said M. Chris Riley, policy counsel at the public-interest group.