Bridge Span 13-8: The FCC’s Competitive Failure

Every year the FCC is required to submit a report to Congress that describes the competitive landscape for commercial mobile services.  In May the FCC opened a several week window (ending this week) asking for input from the public about the state of the marketplace, presumably so it can have all the best data at its fingertips when compiling its seventeenth report.  However, apparently not even the best data is enough for it to get its job done.
Nearly all of the Commission’s reports up to and including the “Thirteenth Report” clearly stated, based upon the overwhelming evidence included in the report, that the wireless market was competitive.  However, beginning in 2010 with no reason given, the FCC began refusing to state that the market is clearly competitive.  This March, when the Commission released the “Sixteenth Mobile Wireless Competition Report” again the FCC refused to conclude that the wireless industry was overwhelmingly competitive despite the data which proved and supported such a conclusion.  The report did not conclude the opposite, it simply did not conclude anything.  The refusal flies in the face of the law which states, in part, that the report “shall include…an analysis of whether or not there is effective competition.”  Another government agency not following the laws.


Many of the comments submitted to the FCC in the last few weeks urged the Commission to reach a conclusion and to find that the marketplace is effectively competitive.  Some pointed out its legal obligation to come to a conclusion.  Others sought to make suggestions as to how the data is collected or analyzed, hoping that an even more crystal clear picture of the industry would develop compelling a finding by the FCC of a highly competitive marketplace. Overall, the comments looked much like they have for the years since the FCC stopped following the law — presentations of evidence, and arguments, to persuade the agency to do the right thing.


Perhaps we should all stop wasting our time.


While it would be great to have an FCC that obeys the law and honestly reports its findings as to whether it found a competitive market or not, such an agency does not currently seem available.  Making this annual tradition any more important only serves to give unearned recognition to an agency clearly caught up in its own malfunction or malfeasance.  Ignoring such antics is the appropriate response.  As the antics continue and no one pays attention, the FCC’s authority in this area will wane.


A thriving, vibrant, innovation forward industry like the wireless industry does not need some stamp of approval from the government to tell it what it already knows – that the industry is not just competitive but wildly so.


Ironically the FCC’s own data presented in the annual reports proves the industry’s success.  As does simply observing the ever increasing numbers of consumers choosing from an ever greater variety of smartphones, served up with an ever greater variety of service plans.  Prices are dropping even as wireless operators invest billions in private capital annually to make their systems even better.  Why the rapid, non-stop innovation?  In part because wireless carriers are no longer just competing against other traditional wireless carriers but rather compete against a wide range of quickly innovating broadband carriers as they try to anticipate where disruption might break out next.  These factors are not contemplated in the report.


If the FCC cannot follow the law, cannot learn from simple observation, and cannot draw conclusions from its own data then one is left wondering what good a report mandated by Congress serves.  Ignoring the FCC’s games is the right decision as it just might force the agency to understand it is contributing to its own irrelevance.

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