or Connect
AppleInsider › Forums › Mobile › iPhone › FCC finds lack of 'effective competition' in US wireless industry
New Posts  All Forums:Forum Nav:

FCC finds lack of 'effective competition' in US wireless industry

post #1 of 73
Thread Starter 
A new report from the Federal Communications Commission did not describe the U.S. wireless industry as having "effective competition" for the first time in years, suggesting major carriers -- including AT&T, the exclusive provider of the iPhone -- could come under federal scrutiny.

U.S. wireless carriers -- including AT&T, the exclusive provider of Apple's iPhone in the U.S. -- could find themselves under government review, based on the FCC's specific omission from the report filed last week. One senior regulator told Reuters that the change was prompted by consolidation in the U.S. wireless market, which has four major players in AT&T, Verizon, Sprint and T-Mobile.

"The lack of the key phrase could set the stage for U.S. regulators to impose policies and regulations to increase competition for consumers who are demanding more data plans on their mobile handsets to surf the Internet and watch videos," the report said.

The last time the FCC did not believe there was "effective competition" in the wireless market was in a report filed in 2002. The most recent report covers 2008 and a portion of 2009.

Robert Quinn, AT&T senior vice president of federal regulatory policy, reportedly said that it is "clear beyond doubt that regulation is simply unwarranted."

FCC Chairman Julius Genachowski said that the change is by no means an indication that the commission will take action. He said that the FCC is looking to take "smart actions to spur competition," but in some cases the best thing to do may be nothing.

Though all five FCC commissioners voted in support of the report, the two Republicans on the commission voiced some disagreement with the findings. Specifically, FCC member Meredith Attwell Baker said she believes there is sufficient competition in the market.

The FCC made its interest in the U.S. wireless industry known last August, when it said it would look into major U.S. wireless carriers in an attempt to increase competition, innovation and consumer protection in the market. The commission issued a number official notices of inquiries, revealing that it would conduct investigations related to wireless innovation and investment, mobile wireless competition, and additional opportunities to protect and empower consumers in the communications marketplace.

The details of the report came just before AT&T revealed it will increase the early termination fee for smartphone customers under contract after June 1. AT&T customers who have a two-year contract with a smartphone, including the iPhone, will need to pay a $325 early termination fee, up from the previous $175 cost. AT&T also reduced the fee to $150 for feature and messaging phones.

AT&T's change follows a previous move by competitor Verizon -- the largest wireless provider in the U.S. -- to begin charging a $350 early termination fee for smartphone users. Google and T-Mobile also charged a combined $550 for those who canceled their contract on the Nexus One handset. Both actions have brought the fees under scrutiny from the FCC.

Under the rule of Genachowski, the FCC has been active in the wireless market, including an inquiry into the non-acceptance of the Google Voice application by Apple for the iPhone App Store. The commission also showed interest in rural markets where customers can't access limited products like Apple's iPhone.
post #2 of 73
Finally! At last!
post #3 of 73
This administration is bush-lite and will do nothing. The the GOP wll take over and it will get worse. Vz will buy sprint and ATT and we are cooked.

All one has to do is compare the USA to EU and se Asia and the problem is plain as day.
2011 13" 2.3 MBP, 2006 15" 2.16 MBP, iPhone 4, iPod Shuffle, AEBS, AppleTV2 with XBMC.
Reply
2011 13" 2.3 MBP, 2006 15" 2.16 MBP, iPhone 4, iPod Shuffle, AEBS, AppleTV2 with XBMC.
Reply
post #4 of 73
Really? What gave it away FCC?
post #5 of 73
Bingo! My biggest complaint is an $100+ iPhone bill every month. It's too much!
post #6 of 73
The really sad thing is that they see a lack of effective competition - yet just let Google monopolize online advertising.

I don't mind either laissez faire or reasonable regulations, but simply making random decisions without any kind of standards is ridiculous.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
post #7 of 73
Where were FCC in 2007 when there was no competition at all to iPhone.

So even now FCC sees Android as not an iPhone killer. LOLz!
Apple had me at scrolling
Reply
Apple had me at scrolling
Reply
post #8 of 73
Quote:
Originally Posted by AppleInsider View Post

FCC Chairman Julius Genachowski said that the change is by no means an indication that the commission will take action. He said that the FCC is looking to take "smart actions to spur competition," but in some cases the best thing to do may be nothing.

So basically this article is much ado about nothing. Thanks.
post #9 of 73
Didn't realize it was the FCC's job to make that determination.
post #10 of 73
Quote:
Originally Posted by jragosta View Post

The really sad thing is that they see a lack of effective competition - yet just let Google monopolize online advertising.

I don't mind either laissez faire or reasonable regulations, but simply making random decisions without any kind of standards is ridiculous.

That was actually the FTC - Federal Trade Commission. Two different government groups.

I do agree with the core sentiment though. Google + AdMob is a much bigger monster than Apple + Quattro (iAds). Google pretty much has the online ad market on lock and to add AdMob to the mix is only going to make them way stronger.
post #11 of 73
I think there is wireless competition, but suspect that it is muted by government regulation. I wonder if the FCC thinks more regulation is the solution.
post #12 of 73
I think what the FCC needs to SERIOUSLY look at in the wireless industry is the insane pricing for text messaging. It is highway robbery. I know some people might argue that if people are willing to pay for it, then the carriers can charge whatever they want. The problem with that argument is that options are limited and the four majors know that.
post #13 of 73
Text messaging is highway robbery. It is all electronic. It isn't like they have some illegal transcribing your next by hand! Da**!
But competition would only lower the price of features and monthly bill. That would be great. But it won't, IMHO, lower the price of the cell phone.
The cell phone game is such a racket anyway. it was a lot simpler when I had my LG env(orange). Those were the days.
post #14 of 73
Quote:
Originally Posted by foad View Post

I think what the FCC needs to SERIOUSLY look at in the wireless industry is the insane pricing for text messaging. It is highway robbery. I know some people might argue that if people are willing to pay for it, then the carriers can charge whatever they want. The problem with that argument is that options are limited and the four majors know that.

Text should part of your data plan. At the very least you shouldn't be charged to receive a text.

Life is too short to drink bad coffee.

Reply

Life is too short to drink bad coffee.

Reply
post #15 of 73
It's all a sham to appease the public outcry anyway... Nothing real will ever come of it. Moving on
post #16 of 73
Quote:
Originally Posted by maccherry View Post

Text messaging is highway robbery. It is all electronic. It isn't like they have some illegal transcribing your next by hand! Da**!
But competition would only lower the price of features and monthly bill. That would be great. But it won't, IMHO, lower the price of the cell phone.
The cell phone game is such a racket anyway. it was a lot simpler when I had my LG env(orange). Those were the days.

Well the thing with text messages is that it costs the carriers almost nothing to operate that specific service. It doesn't demand large amounts of bandwidth or infrastructure. MMS is another story. I'd be open to a SMS only option and a per MMS charge since I don't use it....but no...that would make too much sense.

Also, it'd be easier to swallow the cost of a smartphone if the monthly bill didn't annoy the crap out of me.
post #17 of 73
The Government already has their hands on the Automotive, Banking, and Energy Business. Now they want to control the Wireless carriers.

25 years ago there was very little competition.

Today, we have plenty of options to communicate. Land line, cable, wireless, TCP/IP (data network), texting...with all these services being sold by dozens of companies.
post #18 of 73
In my experience, whenever any gov't entity recommends to "impose policies and regulations," taxes are going to up. Gov't policies and regulations have long existed but evidently haven't been working so far. Why the need for more? Of course, that's generally the one thing the gov't CAN do (or it can walk away). Now that a "problem" has been identified, the FCC is sorta on the line to take "action."

So the FCC is getting involved because the people need "more data plans on their mobile handsets to surf the Internet and watch videos?" I think that's utterly gratuitous and not the domain of the FCC to concern themselves with.
post #19 of 73
On topic... While I do not agree 100% on the fees, I do get it.
More expensive devices.
Carriers subing the cost. Devices are not $49.95 anymore.

$550.00, what the he77???
post #20 of 73
Quote:
Originally Posted by mstone View Post

Text should part of your data plan. At the very least you shouldn't be charged to receive a text.

So should everything really though. The same argument (that a text is just a tiny snippet of data that shouldn't have a huge extra charge), could be made about every "product" the carriers "sell." Phone calls, even long distance phone calls, are just data and the amount of data is minuscule compared to downloading a movie or listening to Internet radio etc.

If real competition is what's wanted, then everything needs to be rolled into one data package that's metred by the byte. That won't necessarily bring competition, but it's the necessary starting point for competition to at least begin to raise it's head again.

As long as there is no rationality in the fee structure, there is no way to get a handle on it at all.
post #21 of 73
@ foad: "I think what the FCC needs to SERIOUSLY look at in the wireless industry is the insane pricing for text messaging. It is highway robbery."

Amen. All it takes is a few phone calls between the CEOs of AT&T, Verizon, Sprint, and whoever else. Something like this: "Hey, we're competitors, but it's to our mutual benefit to keep monthly rates high. How about we all raise prices by 10% in the next few months. I'll go first, you go next, and the other guys will follow."

It's like OPEC, the oil oligopoly (http://en.wikipedia.org/wiki/Oligopoly). They all produce oil, they're technically competing against each other to sell more of their own country's oil, and yet the cooperate by fixing prices.

OK, so maybe I'm wrong. Maybe the cell providers are simply charging what the market will bear. But AT&T can only ream its iPhone customers so much. Some day, supposedly soon, iPhone will be available on Verizon, Sprint, and other networks. And AT&T will lose many customers.

Sent from my iPhone Simulator

Reply

Sent from my iPhone Simulator

Reply
post #22 of 73
Better late than never, I suppose.

I can't believe the things that the wireless industry gets away with in this country. The government really needs to address the following problems:

- Texting: As a lot of other people have pointed out, sending text messages costs carriers next to nothing, but the public is forced to either pay for a messaging plan or a ludicrous amount of money per text. Given the cost of voice and data plans today, text messaging should be free.

- ETFs: If AT&T and Verizon are going to charge $300 or more to allow a customer to terminate a contract early, then the customer who stays with the carrier should get something in return. Carriers justify ETFs as a way to make sure that the subsidy they've paid for the customer's iPhone, HTC Incredible or Motorola Droid isn't lost if the customer leaves before the term of the contract. Fair enough, but if the point of paying let's say, $80 per month, for a smartphone with a voice and data plan is to help pay for the cost of the phone over a two-year contract, shouldn't the customer a) get a lower voice/data rate once the contract terms have be fulfilled; and b) the phone be automatically unlocked, now that it is the customer's property?

- Exclusivity: I don't believe exclusivity should be outlawed, but I do think there should be some limits, much like how drug manufacturers receive a patent on a drug for a certain number of years. Once the patent expires, it opens the way for generics, which are much more affordable to the general public. In terms of cell phone exclusivity, I believe a maximum of two years is fair enough for exclusivity. I think there should be a law mandating that after a two-year window of exclusivity, a phone must be available to all other major carriers.

Frankly, I think the only industries that might be worse in terms of nickel-and-diming customers are the banks and the airlines.

I think the American model of getting a subsidized phone with a two-year contract is terrible. Even though it's more expensive up front, I prefer the European model where you buy your phone and then look for a service provider.
post #23 of 73
Hi,
may I ask what you're paying for sending and receiving text messages?
I'm from Europe so I don't know.

Quote:
Originally Posted by christopher126 View Post

Bingo! My biggest complaint is an $100+ iPhone bill every month. It's too much!

WHaT!?!?
post #24 of 73
Quote:
Originally Posted by wtbard View Post

I think there is wireless competition, but suspect that it is muted by government regulation. I wonder if the FCC thinks more regulation is the solution.

There are two viable paths:regulate the established (and natural) monopolies, or to completely de-regulate to lower the barriers to entry.

For the former to work, you must manage the influence the monopolies can push onto the regulators.

For the latter, you still have to overcome many natural monopoly issues-- spectrum, antenna locations, compatibility, digging up streets, etc.

The regulations aren't just federal, they are state, city, and neighborhood as well. Either solution requires full cooperation by all agencies. Currently the biggest hurdles appear to be at a local level.

Regulation offers simple solutions: de-couple wireless backbone from retail service and create a wholesale market. Make all the retail players MVNOs, and provide (regulated) competitive rates for backbone service.
post #25 of 73
Quote:
Originally Posted by SockRolid View Post

All it takes is a few phone calls between the CEOs of AT&T, Verizon, Sprint, and whoever else. Something like this: "Hey, we're competitors, but it's to our mutual benefit to keep monthly rates high. How about we all raise prices by 10% in the next few months. I'll go first, you go next, and the other guys will follow."

It doesn't even take that. All it really takes, especially in an industry where there are only a handful of players, is for each of them to realize that it's best for them if they avoid competing in certain areas.

Take SMS costs, for example. This is a service on which they make a lot of money. Competing on cost for SMS messages therefore, cuts sharply into their revenue. It's entirely plausable that each company will come to this realization independently and a tacit rule forms that they don't compete on the basis of SMS costs. As long as no one "cheats" and starts offering cheap SMS plans, a status quo that they are all happy with develops and the likelihood that they will ever compete on that basis decreases over time.

The same applies to ETFs, and here and with SMS, we actually see costs go up over time as they "signal" to each other that it's "safe" to raise these fees. A similar situation also exists in the airline industry. As long as the all "hang together" fees and rates go steadily up.

It's particularly easy for wireless carriers in the US to operate like this as they have for years employed strategies like incompatible networks, locked phones, etc. to further lock customers in. The only way this is ever going to change is a) the government steps in with strict regulation to curb abuses or b) a major new player or event disrupts the industry by breaking all the tacit rules of competition, at which point, it costs each individual player more in lost revenue that cutting prices. Option (b) seems unlikely.
post #26 of 73
Quote:
Originally Posted by christopher126 View Post

Bingo! My biggest complaint is an $100+ iPhone bill every month. It's too much!

no one said you have to pay that much, if you can not afford it or do not want to afford it get rid of the iphone and get a basic cell phone for $29/months and pay per minute. If you want premium products you have to pay the price.
post #27 of 73
Voip!!!! I want voip!!!!
post #28 of 73
How sad that most posters seem to want the government to get its fingers into wireless. PErhaps they are too young to remember that it was government intervention and regulation that led to abysmal service by and the ultimate failure of landlines.

We have made marvelous advances in wireless technology precisely because it evolved so fast that the government never got around to regulating it....YET.

Please remember that the government regulators, and most members of Congress for that matter, have never produced anything, started or owned a business, invented anything, or even held a real job where profit was essential. These are people who lie in the government trough rather than getting out and actually producing anything that anyone would like to spend money on.

And these are the people you want to regulate wireless?

I am sad for America.
SkyKing
Reply
SkyKing
Reply
post #29 of 73
Quote:
Originally Posted by Prof. Peabody View Post

So should everything really though. The same argument (that a text is just a tiny snippet of data that shouldn't have a huge extra charge), could be made about every "product" the carriers "sell." Phone calls, even long distance phone calls, are just data and the amount of data is minuscule compared to downloading a movie or listening to Internet radio etc.

Actually voice and data are two different things. Voice is a continuous higher quality data stream, not server requests of packets. Voice takes priority over data. If voice gets interrupted by some interference, you get disconnected. When a web page loading gets disconnected it just tries again until it can finish the page load. When a tower nears peak capacity, the data is suspended first before voice calls are dropped.

Life is too short to drink bad coffee.

Reply

Life is too short to drink bad coffee.

Reply
post #30 of 73
Quote:
Originally Posted by Prof. Peabody View Post

So should everything really though. The same argument (that a text is just a tiny snippet of data that shouldn't have a huge extra charge), could be made about every "product" the carriers "sell." Phone calls, even long distance phone calls, are just data and the amount of data is minuscule compared to downloading a movie or listening to Internet radio etc.

From what I understand, text messaging piggybacks on the signals that phones and towers send out regularly anyway just to keep aware of location. The end result is that there is no extra bandwith cost to the providers to tack in these puny text messages. This is not true of voice, data or SMS where a new line of communication between phone and tower must be opened.

If this is correct (and I am only going by what I read somewhere a year ago so correct me if you know of such things) then the fees charged for texting are particularly egregious.
Progress is a comfortable disease
--e.e.c.
Reply
Progress is a comfortable disease
--e.e.c.
Reply
post #31 of 73
Quote:
Originally Posted by Sky King View Post

How sad that most posters seem to want the government to get its fingers into wireless. PErhaps they are too young to remember that it was government intervention and regulation that led to abysmal service by and the ultimate failure of landlines.

Perhaps you are too young to remember that it was the AT&T monopoly that led to these things. Exactly the opposite of the government regulating an industry to insure a) a high level of competition, and b) that industry practices develop in ways beneficial to consumers.
post #32 of 73
Quote:
Originally Posted by Bageljoey View Post

From what I understand, text messaging piggybacks on the signals that phones and towers send out regularly anyway just to keep aware of location. The end result is that there is no extra bandwith cost to the providers to tack in these puny text messages. This is not true of voice, data or SMS where a new line of communication between phone and tower must be opened.

If this is correct (and I am only going by what I read somewhere a year ago so correct me if you know of such things) then the fees charged for texting are particularly egregious.

Well, although it's clear that the carriers rake in enormous revenues from SMS, and even though there is no "bandwidth cost", there is still the cost of back-end infrastructure to support SMS.
post #33 of 73
Quote:
Originally Posted by anonymouse View Post

Well, although it's clear that the carriers rake in enormous revenues from SMS, and even though there is no "bandwidth cost", there is still the cost of back-end infrastructure to support SMS.

Sure but the bulk rate is between 1-3 cents per message. At the retail consumer level it is 20 cents. That is a huge mark up.

Life is too short to drink bad coffee.

Reply

Life is too short to drink bad coffee.

Reply
post #34 of 73
Quote:
Originally Posted by mstone View Post

Sure but the bulk rate is between 1-3 cents per message. At the retail consumer level it is 20 cents. That is a huge mark up.

Oh, I'm not trying to argue they aren't price gouging. Just pointing out that it's not completely free for them to transmit them. (I remember when tekstud argued there was no infrastructure and the SMS just went magically from one phone to another.)
post #35 of 73
Lesee. Incompatible networks and incompatible phones. Incomplete coverage for every network.

It's like they are all their own little, crappy, monopolies.

I think the feds should force them to have a national standard for cell phones, combine all their networks, and thus allow all phones to work on all networks. it might take a few years, but there you have it.
post #36 of 73
Quote:
Originally Posted by anonymouse View Post

Oh, I'm not trying to argue they aren't price gouging. Just pointing out that it's not completely free for them to transmit them. (I remember when tekstud argued there was no infrastructure and the SMS just went magically from one phone to another.)

Yeah I remember that. That was one time he was speechless. No way to spin that one.

Life is too short to drink bad coffee.

Reply

Life is too short to drink bad coffee.

Reply
post #37 of 73
What's really needed is for either Google or Apple to make a serious commitment to VOIP and reduce the big four to what they really should be - just an ISP.

iTouch with proper bluetooth handsfree protocol + the iPad $30 data plan = nirvana.

If you hate VOIP, I'm sure they could give you the option to buy an expensive voice plan as an add-on to your data plan.
post #38 of 73
At least one member of the comission lives up to her name - Meredith ATTwell
post #39 of 73
Where were the regulators 20 years ago? They should have agreed on a single wireless standard with a standard set of frequencies then.

Maybe things will be better once everyone eventually moves to LTE.
post #40 of 73
Quote:
Originally Posted by Eriamjh View Post

Lesee. Incompatible networks and incompatible phones. Incomplete coverage for every network.

It's like they are all their own little, crappy, monopolies.

I think the feds should force them to have a national standard for cell phones, combine all their networks, and thus allow all phones to work on all networks. it might take a few years, but there you have it.

That would cost $billions. Are you willing to pay 2-3x what you pay now to cover the cost of the conversion, or should the taxpayers just foot the bill?
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: iPhone
AppleInsider › Forums › Mobile › iPhone › FCC finds lack of 'effective competition' in US wireless industry