FCC finds wireless phone market competitive

FCC finds wireless phone market competitive
© Greg Nash

The Federal Communications Commission (FCC) approved a report on Tuesday that says there is effective competition in the mobile wireless industry, even as the number of major service providers is expected to drop from four to three.

The report says that the high concentration in the market has not impeded effective competition, pointing to increased investments, lowered prices and new offerings for consumers from Verizon, AT&T, T-Mobile and Sprint.

The four companies account for 98.4 percent of the mobile wireless market, according to the analysis.

But the report comes amid talk that Sprint and T-Mobile are preparing to announce a merger in the coming weeks. A combined T-Mobile and Sprint would comprise 28.8 percent of the market.

During an agency hearing on Tuesday, Republican FCC Chairman Ajit Pai said "most reasonable people see a fiercely competitive marketplace."

He noted that the major carriers have all introduced unlimited data plans in the past year.

"To be sure, some strenuously resist this conclusion, and have for many years," Pai said.

"It’s all about ideology," he continued. "To those who want to impose more regulation upon the wireless marketplace, the reality of effective competition is an inconvenient truth that must be discounted or ignored."

The FCC voted 3-2 along party lines to approve the findings. Democrats accused the GOP majority of narrowing the scope of the annual analysis to conclude conclusion the market has effective competition.

Democratic Commissioner Jessica Rosenworcel said the agency should not try to rush such a market analysis amid rumors of a Sprint and T-Mobile deal, which the FCC will likely have to approve.

“While the Commission should not prejudge what is not yet before us, I think this agency sticks its collective head in the sand by issuing this report and implying move along, there is nothing to see here,” Rosenworcel said.

“For my part, any transaction before us will require someone to explain how consumers will benefit, how prices will not rise, and how innovation will not dissipate in the face of so much more industry concentration.”

This story was updated at 1:21 p.m.