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FCC Unable/Unwilling To Conclude Wireless Industry Uncompetitive
Despite their own study that supposedly suggests as much...
by Karl Bode 02:03PM Thursday May 20 2010
The FCC has released their fourteenth annual report (pdf) and like most things the FCC has attempted recently, the report tries to carefully walk a center line to avoid upsetting anyone. The report insists that the wireless industry is not "effectively competitive," then proceeds to insist that the FCC is not making any conclusions on whether the wireless industry is competitive. In a statement (pdf), FCC boss Julius Genachowski said the agency did "not seek to reach an overly simple 'yes-or-no' conclusion" about the state of competition. The wireless industry expressed disappointment at the agency's unwillingness to gush:
quote:
We believe the Commission missed an opportunity today to truly highlight one of the few glowing examples of investment, innovation and consumer choice in the U.S. economy. While we understand that the Commission is not making any conclusion about the state of competition in the market, nor are they suggesting that the marketplace has changed to the detriment of consumers during 2008, we nonetheless are disappointed and confused as to why they’ve chosen not to make a finding of 'effective competition' for that year.
In contrast, consumer group Free Press complained about the agency's unwillingness to conclude any competitive problems, despite the fact their own study seems to suggest as much:
quote:
The data in the FCC's wireless competition report adopted today demonstrates what we have been arguing for years: The wireless market has substantial obstacles to effective competition, and these obstacles restrict consumer choice, service quality, service price, innovation and investment. Although we are glad the Commission is no longer blind to a broken market, we are disappointed that it apparently lacks the political courage to acknowledge these problems by concluding that the market does not demonstrate effective competition.
So again, in trying to make everybody happy by walking a vague, nebulous middle ground, the FCC has managed to make nobody happy. That said, this is the first time in six years the report hasn't concluded that the industry was "effectively competitive," something that has greatly annoyed AT&T and company. The full report is here (pdf) so you can make up your own mind about its conclusions.

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tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

1 recommendation

inflamatory words

if the news talking heads can use the word incestuous relationship between the oil industry & regulators then you could also use the word artificial insemination when it comes to the fcc making up competition in the wireless market.. where they chose to 'intervene' is 99% in the PRE-PAID side of the market place. the post paid side of the wireless market is as least as bad as the wired telecom side, if not worse for wireless data plans and item-line services, added fees and total cost of ownership for contracted terms of 1 to 3 years.
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1

Re: inflamatory words

A cell phone plan can easily outstrip a lease on a car.
thedragonmas

join:2007-12-28
Albany, GA
kudos:1

Re: inflamatory words

said by sonicmerlin:

A cell phone plan can easily outstrip a lease on a car.
i dont know what a lease for a new car is but my family plan with 3 lines on deathstar errr i mean at&t is ~$200 a month :| dang smart phones.

baineschile
2600 ways to live
Premium
join:2008-05-10
Sterling Heights, MI

1 edit

Bologna

I have verizon, att, tmobile, sprint, boost, metropcs (regional), plus any number of pre-paid phones. there is plenty of competition in the wireless sector.

to me, the only issues are etf's on contracts, and device exclusivity. but the choice is there.
ajac

join:2000-08-15
Norman, OK

Re: Bologna

what the real issue is they need more regulation. Right now Cell phone companies get away with charging to many little fee's that is just more money for their pocket.
glinc

join:2009-04-07
New York, NY

1 edit

Re: Bologna

That's why the Government needs to get into Wireless, TV and ISP service and offer it for half the price compared to those private companies. Customer would be responsible for 50% and the Government pays the other 50%.

Something similar or exactly the same as Medicare and Foodstamp program is needed for Wireless, TV and ISP.

The Limit
Premium
join:2007-09-25
Greensboro, NC
kudos:2
Reviews:
·Windstream

Re: Bologna

...uhh, what?

No, we don't need that at all actually. Medicare is an utter failure, I know this because I work with the insurance companies, especially Medicare and Medicaid.

The Federal government doesn't need to stick it's nose anywhere else. If you don't like the prices, then vote with your wallet. Last I checked mobile data is NOT a necessity, maybe low speed broadband, but not mobile data and TV.
k1ll3rdr4g0n

join:2005-03-19
Homer Glen, IL

Re: Bologna

said by The Limit:

...uhh, what?

No, we don't need that at all actually. Medicare is an utter failure, I know this because I work with the insurance companies, especially Medicare and Medicaid.

The Federal government doesn't need to stick it's nose anywhere else. If you don't like the prices, then vote with your wallet. Last I checked mobile data is NOT a necessity, maybe low speed broadband, but not mobile data and TV.
You do really the vote with your wallet doesn't mean anything? They make millions even billions of dollars in profit, what makes you think that $60/month will really cut into that?

baineschile
2600 ways to live
Premium
join:2008-05-10
Sterling Heights, MI

Re: Bologna

Ask PanAm airlines that exact questions
fiberguy
My views are my own.
Premium
join:2005-05-20
kudos:3
Voting with your wallet DOES work.. just not enough people are ever willing to do it...

People WANT.. and they're willing to bitch, but people NEVER do anything about it.

In simple - people are clueless and really just love to bitch. People will bitch that they don't like something, but this generation, and this day and age, unlike our parents and grandparents, this generation is lazy and doesn't know what it means to make a sacrifice to get change they want. They just want the government to do everything FOR them, and when they get something forced on them they DON'T want, those same lazy people (who won't do anything for themselves to get the change they want) bitch about that too.

It's a never ending cycle and the politicians KNOW this already.

Business knows this too.. that's why.. for every customer lost, they just find a new one which is why many companies still have subscriber growth.
fiberguy
My views are my own.
Premium
join:2005-05-20
kudos:3
said by glinc:

That's why the Government needs to get into Wireless, TV and ISP service and offer it for half the price compared to those private companies.

..snip..

Something similar or exactly the same as Medicare and Foodstamp program is needed for Wireless, TV and ISP.
Are you ma'ad?

The government doesn't do ANYTHING right. And further more, to do it "half price" which they can't anyway, would only mean they'd have to make that money up elsewhere... how does the government generate revenue? ... they TAKE it from everyone that makes a buck for themselves.

I just don't get this group of people that think we need a nanny state to take care of all of our needs.. this is just maddening to even read that "the government should..." ... how about you simply buy what you need and live within your means or take the same opportunity that everyone has and improve your life so you have more to buy more - that's how society works.

Medicare is a miserable failure.. and foodstamps.. don't even get me started on THAT entitlement program; one that is SOOOOOOOO highly abused by career users that take advantage me MY tax dollar. NO-THANK-YOU!

How about I make my money and I keep more of it and stop paying into any program that the government thinks they can do better - and never does. How about *I* decide better where my earnings are spent and not some elected and paid for politician that can't even read the bills they pass.

By the way.. you know that government you turn to for making all our lives better?? You know that bill in AZ right now that everyone is up in arms about when it comes to illegals in their state... do you realize that the overwhelming majority of people that strongly oppose it and are speaking up about it daily... HAVEN'T EVEN READ IT? The patriot act that affected ALL of our lives, and people bitch about all the time, was read by ONE SINGLE member of congress?

And THIS is the government you want to turn to in order to make things better? If they did this, as you suggested, they'd simply introduce a bill, and people would vote on it and NOT even care what it said or got us into... and so far, the government RARELY ever does anything for us on the cheaper side anyway...

"The customer would pay for 50% of it and the GOVERNMENT would pay for the other 50%"... REALLY? Do you not understand that the government HAS NO MONEY? They need money, where do you think it comes from??? They get it FROM us...!! So, we're STILL paying the bill.. only, you'd now be asking people that DON'T want TV services or wireless.. etc. to now pay for something THEY don't want or have in the first place. So you're all for letting SOMEONE ELSE pay for YOUR extras in life too now huh? There are plenty of people here online that don't want or take TV service, and what you're saying is "well, they can pay for half of my service"... and then there are people, that no matter how many bills get past, will be outside of the wired coverage area - ALWAYS.. and THOSE people, too, will get to pay for half your bill too.

Man... WHY?!
axus

join:2001-06-18
Washington, DC
Reviews:
·Comcast
Agree with you there. Most places have more than 2 choices for cell phone, amount of providers is not the problem. Most places do not have more than 2 choices for high speed internet.

I'd say that 2-year contracts are a problem; ETFs are the only way they can "strongly encourage" someone to stick to that 2 year contract. It would be worse if the contract were like a commercial lease, where you had to pay through the end of the contract, even if you weren't using it.

So, instead of regulating ETFs, regulate a maximum contract length of 6 months. That would up the opportunities for competition.

The advertised cost needs to be more transparent. Advertisements should reflect at minimum the final cost for the service. If monthly cost is $50+$10 in Maryland and $50+$5 in VA, the ad should say $60, not $50.

jester121
Premium
join:2003-08-09
Lake Zurich, IL

Re: Bologna

Coming soon to a Karl Komplains article near you -- "Those evil, greedy handset makers and their $500 phones."

(No more contracts = no more carrier subsidies = no more $99 phones with a $50 rebate)
elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink

1 recommendation

Huh?

How could they possibly conclude wireless is uncompetitive?

I don't have enough fingers and toes to count the number of wireless companies I can buy service from, and that number has only increased, as prices have come down dramatically, in the past few years.

Even if we were talking wired landlines, where there are usually only two sellers, competition is quite healthy, and while competition does not mean lower prices per se, it is often the more regulated entity that is charging the most for services.

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

1 edit

1 recommendation

Re: Huh?

said by elray:

How could they possibly conclude wireless is uncompetitive?

I don't have enough fingers and toes to count the number of wireless companies I can buy service from, and that number has only increased, as prices have come down dramatically, in the past few years.
I agree. There is plenty of competition in the wireless market. And you have to lump pre-paid and post-paid together when determining that because that is the marketplace where you can buy service.

The people who claim otherwise are upset because every vendor is not using the same frequencies and technologies to deliver cell service. And if they can't transfer any phone to any carrier on a moments notice without any penalty they claim there is no competition. In their ideal world, the gov't would have mandated GSM only; 1 set of shared frequencies; and that every phone sold must work on every system in the US. Sort of like the old Ma Bell landline system. Only problem with that is it stifles innovation.
--
Are you happy with your rep in Washington, DC?
nasadude

join:2001-10-05
Rockville, MD
said by elray:

How could they possibly conclude wireless is uncompetitive?

....
why don't you read the report?
L00ker

join:2007-01-18

Consider your area...

If you live near or in a major city then of course you have plenty of cell providers, thats not the point. This is more aimed at people in more rural areas (like my parents) that have 2 providers that gouge prices because they know they are the only gig in town, just like the cable companies.
sheezyfromba

join:2002-08-03
Las Vegas, NV

'exlusive' monopolies

The contract durations are what make it uncompetitive, and you pretty much have to get a contract to be able to afford the phones they sell. They need to do something about the providers closed networks. When they "subsidize" the phones they still are double what they would be if the networks were open and anyone could sell phones. Why does a phone cost more that a notebook computer, and no its not because of the size, the components are cheaper. Then sometimes providers have an advantage with 'exlusive' handset deals (i.e. iphone and ATT) where is the competition there, you want iPhone go get ATT sounds a little like monopoly to me. When I can go to Walmart buy whatever phone I want then go pick what provider to hook it too, then I will be happy with the level of competition in the market.
fiberguy
My views are my own.
Premium
join:2005-05-20
kudos:3

Re: 'exlusive' monopolies

said by sheezyfromba:

The contract durations are what make it uncompetitive,
Then take the option NOT to have the contract and get a non-subsidized handset. And before you say phones are too expensive, there are plenty of options that people can have to MAKE a PHONE CALL. The expensive phones are the ones that are fully loaded PDAs, like iPhone, Driods, and other feature packed phones. There are plenty of flip and bar phones that cost $100 to $150 with out a contract. This is a sign of "I want the best for nothing".. sorry.. doesn't work that way and I'd NEVER want a society where any and everyone can have what those of us that work hard to be able to afford, do have. Sorry, I do like to know that if I can afford a premium, that I get to have that while others who can't, don't. It's part of class and status in this country. I don't subscribe that everyone is equal, on that level. It's just a fact of life. Otherwise, everyone would be able to afford a Jag for a car..

and you pretty much have to get a contract to be able to afford the phones they sell. They need to do something about the providers closed networks.
See MMH's post above. I don't agree with you. Further, in Europe, they don't sub handsets and pay full price. Maybe if we drool over their recently improved broadband options, maybe we SHOULD adopt their handset and cell policies and stop all handset subsidizing as well. I think that's a good idea.. but wait, then as you said, people wouldn't be able to afford handsets. Oh well. Back to the drawing board with that idea, huh? (hint: if/when government gets their hooks on this, and they will, and contracts get invalidated, be ready to pay full price for your phone. Don't cry when you get what you ask for. I just see it as more people owning flip phones instead of androids and iPhones) As it was said above, carriers use different frequencies and systems which is why many phones are the way they are. So far, it seems that the horrible CDMA service, as people call it, are the most compatible here.. that's Sprint and VZ.

When they "subsidize" the phones they still are double what they would be if the networks were open and anyone could sell phones.
Anyone CAN sell phones.. where are you coming up with this? You can buy phones direct and pay retail.. you can go buy one off ebay.. and other places... outside that, you're not going to be able to, no matter what the government or you hope will happen, use any old phone YOU want. There are always going to be limitations on handsets you can use on each system. Like MMH said, remember ma bell days, if you're old enough to remember. Everyone had the same phone.. did you want it in cream color? black, or olive green? That was your choice.. Oh, wall or table phones.. do you did have a second option. MANY times, your phone cord was hard wired to the wall, so you couldn't even move it from one room to another if you wanted. Nice choices, huh?

Why does a phone cost more that a notebook computer,
Really?

and no its not because of the size, the components are cheaper.
Many reasons.. R&D, the limited production, compact size, and the fact that they're always "new" and based on new stuff.. it's the way the market works. I'd suggest you look into, well, more into how the marketplace works. You're making a HUGE mistake to try to compare apples and oranges to get an answer. Netbooks are netbooks... phones are phones.. might as well compare the price of a netbook to a laptop.. they're basically the same thing. I've seen some netbooks more expensive than notebooks.. Life is not one string of steps in comparisons.

Why not just make all cell phones one price? Why should something with more features cost the same as something with less? There has to be different classes and prices in any thing.. and cell phones are not an exception.

Then sometimes providers have an advantage with 'exlusive' handset deals (i.e. iphone and ATT) where is the competition there, you want iPhone go get ATT sounds a little like monopoly to me.
You can't force APPLE to make their phone for anyone else. There is ABSOLUTELY nothing wrong with this. Why does NFL have an exclusive agreement with DirecTV? Not all business agreements have to be open.. this is a talking point of an ultra-liberal whiner who wants everything to be "fair"... and while you may not think this is "fair".. there is no guarantee of fairness. Now, if they, apple, was selling the iPhone to att for $299 just becuase, and then demanded more money from every other vendors if they chose to expand their line for higher, just becuase, then you have an issue.

In the same line of thinking, why isn't every single phone made, to date, made for every single carrier? Why isn't the New Droid HD on Tmo being made for every other carrier? Why isn't the HTC hero being made for apple, verizon, tmo.. etc? Answer - they don't have to. People make the mistake all the time to single out the iPhone. Outside of an exclusive agreement, apple could have made the phone for ATT and simply not made a phone for the other carriers... it's apple's choice. For the record, apple, if you recall, first offered the iPhone to VZ, then Sprint, and they both turned it down. It's NOW that apple was successful with their phone that everyone's crying foul. The other CARRIERS didn't want the phone... now that it's a success, well, now they want it. So sorry... back to the drawing board on that one. You just can't force the handset makers to make a phone for every carrier out there.

When I can go to Walmart buy whatever phone I want then go pick what provider to hook it too, then I will be happy with the level of competition in the market.
Wake up! it's time to get the kids off to school now. It's a dream and it's NEVER going to happen.. no, wait.. I said that wrong.. It's NEVER going to happen. You know what GSM and CDMA is, right? How you going to take that CDMA phone and go to the "provider of your choice" and use it? How about when LTE is out? How are you going to take that phone and go to Sprint and say "activate this phone!" .... NOT going to happen.. and IF that were to happen, and you want the ability to do just what you say, that means that EVERY phone maker out there is going to HAVE to include a radio for EVERY SINGLE carrier in it to make that work.. AND, the fact that YOU want to be able to just go to WalMart and buy it, guess you better make sure you have plenty of room on your credit card becuase it's going to be ONE EXPENSIVE phone! Will you want the subsidy back then?? Phones also only really last a year or two anyways.... you really want that expense all the time? Or, is the next step to get the government to also force phone makers to sell them at a loss and, that's that...?

Yes, there is a lot of sarcasm in my post, but at the same time, this is reality. Government isn't going to be able to force every single thing the "consumer" wants... the government will NEVER force a company to either accept undue burden on itself as they can't force a company to operate at a loss, nor are they going to force the consumer out of the market which will also harm the company. This is where lobs do work.. the consumer likes to look at everything as a scam, but that's usually becuase they're grossly undereducated, ignorant, or just don't get it.. or, just spoiled brats and want everything handed to them. How else can you say this? There has to be things done with in reason.. and some people just don't get it, or just want what they want and don't care how they get it and who else it hurts.
fiberguy
My views are my own.
Premium
join:2005-05-20
kudos:3

FCC Unable/Unwilling To Conclude Wireless Industry Uncompeti

Sounds like an "ultra-consumerist" point of view posting an op-ed piece - that is pretty much whiney if you ask me.. Sorry, but it is.

There is PLENTY competition in the market place... what the PROBLEM is here is that SOMEONE doesn't like the fact that it's not being priced at what HE believes it should be.. you can have 40 wireless carriers out there and unless there is someone pricing it out on the dirt cheap, HE will continue to complain that "there is no competition"... pure bull.

There is a $50 all you can eat prepaid plan available. That's unlimited use, no ETF.. so what else do you need with that?

There are plenty of post paid plans out there that are very competitive. Sprint is shaking up the post paid world. Unlimited plans used to be $199 a month through AT&T a few years ago.. then it was $99 and now it's as low as $69. You want a cheap phone, agree to an ETF and take the subsidy. You want no ETF, pay full price for the phone like you do in those other countries.. you know, those other countries that have such WONDERFUL internet service that certain people want us to be like??! Well.. let's be like them.. lets do away with subsidy plans and let people have the full price of the phone to pay too. (After all, if these other countries get it right, lets be like them - and then the outcry pour out)

The fact is, that American consumers feel they need the best for nothing and that's not going to happen. Until that time, we'll continue to see certain people post opinions that there isn't competition in an industry where there more certainly is!

Life is give and take.. it's not all one sided.. there are plenty of options available to the consumer in wireless.. PLENTY of options.. we've not had this many available in the history of wireless.. and yet some people there that the wireless industry is uncompetitive? Really?

There is no opinion given to me that will make me change my mind on this one, but I'm sure plenty will try. By the way, those that are convinced there isn't fit the category I talked about above.. it's those that want a premium for near nothing... I don't care.
cptmiles
Premium
join:2004-04-22
Swayzee, IN

Where the Competition is Needed

1. Voice and Data Interconnectivity and fair roaming. If I were a small carrier that wanted to build in my rural area, but I don't have the spectrum to build the entire U.S. it is impossible to get interconnectivity with a large carrier without giving the farm away. They are not legally obligated to connect with me like I was a landline carrier.

2. Handset exclusivity. Everyone should be allowed the same deal.

You solve those two issues, FCC, and you have a robust wireless industry.