WASHINGTON-The Federal Communications Commission deemed the wireless industry competitive and for the first time used antitrust data in its report.
“There is effective competition in the wireless marketplace, and the state of the industry is strong,” said John Muleta, chief of the FCC’s Wireless Telecommunications Bureau, as he presented the ninth annual wireless competition report.
While Muleta did not present the Herfindahl-Hirschman Index, commonly known as HHI, during his presentation and it is not in the press release, FCC Commissioner Michael Copps commented on it.
“This year’s report is a marked improvement over last year’s report. For the first time, we begin to use traditional competition analysis tools by calculating HHI scores for each economic area in the country,” said Copps.
HHI measures market concentration by taking into account the size of a market, the number of competitors and each carrier’s market share. According to the Department of Justice Web site, markets with more than 1,800 HHI points are considered concentrated.
The wireless bureau said the average HHI in wireless was 2,175.
“HHIs are only a starting point for examining competition in a market. You also have to consider other factors such as carrier conduct, consumer behavior and market performance, and all of these indicators are examined in the competition report,” said Lauren Patrich, WTB special counsel for media relations.
Copps also expressed a concern about the lack of data regarding rural markets, a view echoed by a rural wireless advocate.
“It will be interesting to see the full report,” said Jessica Bridges, chief executive officer of the Rural Telecommunications Group, which represents rural wireless carriers. “There are still issues that impact the ability of rural carriers to compete with nationwide players such as unfunded regulatory burdens such as wireless enhanced 911 and the Communications Assistance for Law Enforcement Act. They have a difficulty in negotiating an acceptable roaming rate with nationwide and regional carriers. They have a difficulty in obtaining transferable handsets. Rural carriers are disproportionately impacted because the universe of available handsets is smaller. Rural carriers are not given as much choice so that is an additional hurdle.”
The Cellular Telecommunications & Internet Association used the report to caution against further regulation.
“This is becoming an annual occasion of recognition for the wireless industry, where regulators praise us for ensuring healthy market competition. Competition has a long history of delivering more choices, new services and lower prices to wireless consumers-every year. The industry will continue to operate successfully in this competitive market in order to serve consumers well, as long as regulators continue to recognize our success is based on market forces, not costly government regulations,” said CTIA President Steve Largent.
While Copps was critical that there was not a more precise definition of effective competition, other commissioners saw the report in a positive light.
The report has “ongoing good news, and that is great!” exclaimed FCC Commissioner Kathleen Abernathy.
FCC Chairman Michael Powell reminded everyone how far the wireless industry has come. “Numbers like 161 million subscribers are phenomenal especially when in our own lifetimes we witnessed a time when no one had a phone.”
