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

Posted:
in iPhone edited January 2014
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.
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Comments

  • Reply 1 of 72
    leeryleery Posts: 8member
    Finally! At last!
  • Reply 2 of 72
    8corewhore8corewhore Posts: 833member
    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.
  • Reply 3 of 72
    ghostface147ghostface147 Posts: 1,629member
    Really? What gave it away FCC?
  • Reply 4 of 72
    christopher126christopher126 Posts: 4,365member
    Bingo! My biggest complaint is an $100+ iPhone bill every month. It's too much!
  • Reply 5 of 72
    jragostajragosta Posts: 10,473member
    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.
  • Reply 6 of 72
    ivladivlad Posts: 742member
    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!
  • Reply 7 of 72
    larz2112larz2112 Posts: 291member
    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.
  • Reply 8 of 72
    Didn't realize it was the FCC's job to make that determination.
  • Reply 9 of 72
    foadfoad Posts: 708member
    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.
  • Reply 10 of 72
    wtbardwtbard Posts: 42member
    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.
  • Reply 11 of 72
    foadfoad Posts: 708member
    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.
  • Reply 12 of 72
    maccherrymaccherry Posts: 924member
    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.
  • Reply 13 of 72
    mstonemstone Posts: 11,510member
    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.
  • Reply 14 of 72
    pmzpmz Posts: 3,433member
    It's all a sham to appease the public outcry anyway... Nothing real will ever come of it. Moving on
  • Reply 15 of 72
    foadfoad Posts: 708member
    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.
  • Reply 16 of 72
    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.
  • Reply 17 of 72
    ktronixktronix Posts: 12member
    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.
  • Reply 18 of 72
    shobizshobiz Posts: 207member
    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???
  • Reply 19 of 72
    prof. peabodyprof. peabody Posts: 2,860member
    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.
  • Reply 20 of 72
    sockrolidsockrolid Posts: 2,789member
    @ 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.
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