FCC investigates wireless carrier competition

Posted:
in iPhone edited January 2014
The Federal Communications Commission signaled this week that it will look into major U.S. wireless carriers in an attempt to increase competition, innovation, and consumer protection in the market.



"Wireless mobility has become central to the economic, civic, and social lives of over 270 million Americans," an FCC press release stated. "We are now in the midst of a transition from reliance on mobile voice services to increasing use of and reliance on mobile broadband services, which promise to connect American citizens in new and profound ways. A robustly competitive mobile wireless market will be essential to realizing the full benefits to American consumers and channeling investment into vitally important national infrastructure. The FCC is seeking to ensure that competition in the mobile wireless market continues to bring substantial benefits to American consumers."



The commission released a number of official notices of inquiry this week, announcing investigations designed to look into wireless innovation and investment, mobile wireless competition, and additional opportunities to protect and empower consumers in the communications marketplace. The news comes just a week after Apple, AT&T and Google all responded to an FCC inquiry over the absence of the Google Voice application from the iPhone App Store.



The FCC is taking a hard look at mobile providers and their business practices, suggesting the agency could take a more hands-on approach with the U.S. market's four major carriers: AT&T, Verizon, T-Mobile and Sprint. Earlier this year, the commission was asked to look into matters involving Skype and the iPhone, and the availability of Apple's phone in smaller, more rural markets. However, the FCC has not yet mandated any industry changes, nor has it suggested any regulation is guaranteed.



The commission's mere interest, though, is a good sign for companies like Google, Vonage and Skype, BusinessWeek reported. Those companies offer alternative phone and communication services that aim to compete with major wireless carriers. Christopher Libertelli, senior business director at Skype, he believes the FCC is asking the "right questions to maximize innovation."



For its inquiry into protection of consumers, the FCC will look into the information available to consumers as they choose a provider, choose a service plan, manage the use of their service plan, and decide whether and when to switch providers. It is also asking for comments on mandatory information disclosure, compared with other industries, like nutrition labels on food.



The mobile wireless competition inquiry aims to enhance the FCC's understanding of the industry in three ways: what analytic framework and data sources "most clearly describe competition;" reviewing market segments not covered thoroughly in previous reports; and "vertical relationships between 'upstream' and 'downstream' market segments."



Finally, the FCC's investigation into wireless innovation and investment seeks to explore spectrum availability and use, as well as devices, applications and business practices of each wireless network. The inquiry will look into how wireless services can aid in issues such as health care, energy, education and public safety. The ultimate goal is to form a framework that will serve as a knowledge base for future wireless regulatory issues.



Playing a part in the FCC's interest in the wireless market are exclusive contracts between wireless providers and handset makers, like the agreement between AT&T and Apple for the iPhone. In June, a group of U.S. senators asked the FCC to examine those business agreements to see if they are in the best interest of consumers. The four members of the Commerce Subcommittee on Communications, Technology and the Internet has expressed concern over exclusive deals, after a petition was filed by the Rural Cellular Association, which represents smaller tier II and tier III carriers that provide service to parts of the U.S. where major carriers do not. The association has argued that their inability to provide customers with popular handsets limits competition. Bowing to federal pressure, Verizon Wireless responded by agreeing to allow some exclusive handsets on smaller, rural carriers' networks to promote competition.
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Comments

  • Reply 1 of 51
    I'm kind of disappointed that an attempt to lower prices was not explicity spelled out here. Domestic cell phone fees are completely outrageous compared to the rest of the world.
  • Reply 2 of 51
    Quote:
    Originally Posted by ranson View Post


    I'm kind of disappointed that an attempt to lower prices was not explicity spelled out here. Domestic cell phone fees are completely outrageous compared to the rest of the world.



    Price does not matter. Sufficient competition is the key phrase.
  • Reply 3 of 51
    ivan.rnn01ivan.rnn01 Posts: 1,822member
    At least AT&T can't declare "no role" anymore.

    Google are smart guys, they know who to chase. (I have just 2 questions for them: where is money from and how to get bodies like FCC in your boat).
  • Reply 4 of 51
    "The inquiry will look into how wireless services can aid in issues such as health care, energy, education and public safety."



    In other words, how can Big Brother extract more money from the carriers, which of course means, how much more will cell service cost when they're done?
  • Reply 5 of 51
    al_bundyal_bundy Posts: 1,525member
    Quote:

    Playing a part in the FCC's interest in the wireless market are exclusive contracts between wireless providers and handset makers, like the agreement between AT&T and Apple for the iPhone. In June, a group of U.S. senators asked the FCC to examine those business agreements to see if they are in the best interest of consumers. The four members of the Commerce Subcommittee on Communications, Technology and the Internet has expressed concern over exclusive deals, after a petition was filed by the Rural Cellular Association, which represents smaller tier II and tier III carriers that provide service to parts of the U.S. where major carriers do not. The association has argued that their inability to provide customers with popular handsets limits competition. Bowing to federal pressure, Verizon Wireless responded by agreeing to allow some exclusive handsets on smaller, rural carriers' networks to promote competition.



    if you want the good phones then you should build out a 3G network in your coverage area. i've heard a lot of these carriers either don't have 3G or charge obscene per megabyte rates for data
  • Reply 6 of 51
    mcarlingmcarling Posts: 1,106member
    The first step the FCC should take to ensure competition is to outlaw locked handsets.
  • Reply 7 of 51
    mactrippermactripper Posts: 1,328member
    Quote:

    FCC investigates wireless carrier competition







    Good, it's about time.





    Carriers should compete for our service just like any other and shouldn't have a monopoly on a device at the exclusion of other carriers.





    $600 for the iPhone, $30 a month for voice and say $15 a month for data for two years.



    That totals $1680. Yet people are paying closer to $2400.





    Me? I'm paying around $480 for two years for voice and phone.



    Sure a smart phone costs more, but almost $2000 more? Come on! that's a new Mac!





    Apple will do well to open up to other carriers as well, they will sell more iPhones and then sell more Apps and gain market share.



    It's the carriers who are playing hardball and ripping people off wholesale, it's because they are getting their arses kicked by phone companies like what I use.
  • Reply 8 of 51
    Quote:
    Originally Posted by mcarling View Post


    The first step the FCC should take to ensure competition is to outlaw locked handsets.



    We've beaten this one quite a bit but having an exclusivity agreement actually creates competition. You think the pre would even a shot in hell if Sprint had the iPhone? Having those agreements actually encourage both competition and innovation.



    The end result, as with most things the Fed looks at, will be an increased price to consumers - joy...
  • Reply 9 of 51
    after how many years of this crap do they finally decide to at least investigate? thats right, it took the iphone to change everything.
  • Reply 10 of 51
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by ranson View Post


    I'm kind of disappointed that an attempt to lower prices was not explicity spelled out here. Domestic cell phone fees are completely outrageous compared to the rest of the world.



    If you actually read the OECD report, you will know that it is the rest of the first world that has outrageous cell phone fees.



    Here is the actual OECD report:



    http://browse.oecdbookshop.org/oecd/...t/9309031E.PDF



    Do you know why the report is garbage --- when you go to page 297 and page 298 --- you will find that OECD use the AT&T Wireless Nations 450 Messaging 200 for both medium and high usage.



    Go to page 275:



    ?It is important to note again that the OECD calling pattern in the basket can be significantly different than common calling profiles in a specific country. For example, the high-usage OECD basket includes 1,680 outgoing voice calls per year while users in the United States average 9,600 minutes of voice calls (combined incoming and outgoing) per year. In this case the basket provides the cost of buying exactly the calls and messages in the OECD basket rather than what may be considered a ?typical? bundle in the market.?



    The average American (4800 outgoing minutes and 4800 incoming minutes per year) talks 3x more than the OECD's "heavy high usage". The average American talks 6x more than the OECD's average "medium usage".



    They are basically classifying a Mini Cooper as the size of an average family car.
  • Reply 11 of 51
    Quote:
    Originally Posted by MacTripper View Post


    Good, it's about time.





    Carriers should compete for our service just like any other and shouldn't have a monopoly on a device at the exclusion of other carriers.





    $600 for the iPhone, $30 a month for voice and say $15 a month for data for two years.



    That totals $1680. Yet people are paying closer to $2400.





    Me? I'm paying around $480 for two years for voice and phone.



    Sure a smart phone costs more, but almost $2000 more? Come on! that's a new Mac!





    Apple will do well to open up to other carriers as well, they will sell more iPhones and then sell more Apps and gain market share.



    It's the carriers who are playing hardball and ripping people off wholesale, it's because they are getting their arses kicked by phone companies like what I use.



    Only the ignorant pay huge phone bills today.



    They do compete - obviously. You pointed it out in your post how they compete. You chose a service that gives you a non-smart phone because you didn't like the price of the smart phone - that's the regular phone competing with the smart phone (and possibly another carrier).



    Apple not only wanted to make $ off the iPhone they needed to make $ off the iPhone so they went to Verizon and they said no go so they went to AT&T who said sure. Apple has now used those massive profits to continue to make the iPhone better and since Apple got the guaranteed money from AT&T they pushed forward with the iPhone and now, because of the success of the iPhone other companies are making iPhone competitors (which are also carrier exclusive because, just like Apple, they need money as well).



    You can't have 1 without the other.
  • Reply 12 of 51
    samabsamab Posts: 1,953member
    There are plenty of competition in the US cell phone service market.



    The largest Japanese carrier, DoCoMo, owns over 50% of the Japanese market.

    The largest Korean carrier, SK Telecom, owns over 50% of the Korean market.

    The largest French carrier, France Telecom, owns 45% of the French market.

    The largest German carrier, T-Mobile, owns 40% of the German market.



    The largest US carrier, Verizon Wireless, owns 31% of the US market.



    The only industrial country where there is even less market concentration is UK where their largest carrier, O2, owns 27% of the UK market. But there are constant news report of T-Mobile UK getting out of the UK market --- which will mean that whoever buys them out will become the top UK carrier with about 40% of the UK market.
  • Reply 13 of 51
    al_bundyal_bundy Posts: 1,525member
    Quote:
    Originally Posted by MacTripper View Post


    Good, it's about time.





    Carriers should compete for our service just like any other and shouldn't have a monopoly on a device at the exclusion of other carriers.





    $600 for the iPhone, $30 a month for voice and say $15 a month for data for two years.



    That totals $1680. Yet people are paying closer to $2400.





    Me? I'm paying around $480 for two years for voice and phone.



    Sure a smart phone costs more, but almost $2000 more? Come on! that's a new Mac!





    Apple will do well to open up to other carriers as well, they will sell more iPhones and then sell more Apps and gain market share.



    It's the carriers who are playing hardball and ripping people off wholesale, it's because they are getting their arses kicked by phone companies like what I use.



    Only the ignorant pay huge phone bills today.



    every smartphone will cost you the same or more than the iphone with AT&T and Verizon. Sprint and T-Mobile will include texting but their selection of phones is crap except for the Pre. but that is still in beta testing
  • Reply 14 of 51
    ivan.rnn01ivan.rnn01 Posts: 1,822member
    Quote:
    Originally Posted by samab View Post


    There are plenty of competition in the US cell phone service market.



    Isn't it unexpected a bit, that this perfectly developed market needs involving authorities to regulate it exactly as in socialist countries (France, for one), eh?
  • Reply 15 of 51
    mcarlingmcarling Posts: 1,106member
    Quote:
    Originally Posted by bigmc6000 View Post


    You think the pre would even a shot in hell if Sprint had the iPhone?



    Yes. If Microsoft can sell the crap Zune, then Palm can sell the decent Pre.



    Quote:
    Originally Posted by bigmc6000 View Post


    Having those agreements actually encourage both competition and innovation.



    I respectfully disagree. Suppose four smart phone manufacturers and four networks. With locked phones, consumers have four choices. With unlocked phones, consumers have sixteen choices.
  • Reply 16 of 51
    I hope they do something even remotely related to that here in Canada. There is absolutely NO competition here. Unlimited plans don't even exist here. The largest plan here is about 2000 nationwide minutes at $330 per month, while in America there are unlimited nationwide plans at $99 a month. I hope the canadian government does something about the outrageous plans here.



    (Did I mention there's no unlimited data here either?)
  • Reply 17 of 51
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by ivan.rnn01 View Post


    Isn't it unexpected a bit, that this perfectly developed market needs involving authorities to regulate it exactly as in socialist countries (France, for one), eh?



    There are always room for improvement. But to say that the US doesn't have a competitve environment is pure garbage.



    But you are like the Bee Gees song, I started a joke --- everybody is laughing at you. The joke is on the French citizens --- who has 3 national carriers, all French owned, zero foreign competitiors entering the French market, all 3 carriers got nailed for price fixing a few years back...



    Vodafone (based in UK) and T-Mobile (based in Germany) --- you immediately know that there is a problem when these 2 neighbouring multi-nationals are not operating in the big French country.



    French court ordering the end of iphone exclusivity and forced when and how unlocking codes should be given --- those are idiotic regulations that are ineffective. You want the French citizens to benefit --- bring in a fourth national carrier, preferabily a foreign one.
  • Reply 18 of 51
    ivan.rnn01ivan.rnn01 Posts: 1,822member
    Quote:
    Originally Posted by samab View Post


    There are always room for improvement. But to say that the US doesn't have a competitve environment is pure garbage.



    Nobody says the US doesn't have a competitve environment. But what exactly are you calling improvement? Is it FCC's investigation?



    Quote:
    Originally Posted by samab View Post


    But you are like the Bee Gees song, I started a joke --- everybody is laughing at you. The joke is on the French citizens --- who has 3 national carriers, all French owned, zero foreign competitiors entering the French market, all 3 carriers got nailed for price fixing a few years back...



    No, no, the joke is not on poor frenchies. There was no iPhone at the time. But now we have 3 carriers selling iPhones. We have competitive sets of applications on App Store. We have mobile television (over 3G) from dozen of content suppliers.



    Quote:
    Originally Posted by samab View Post


    Vodafone (based in UK) and T-Mobile (based in Germany) --- you immediately know that there is a problem when these 2 neighbouring multi-nationals are not operating in the big French country.



    This is just not true. Vodafone works in France.



    Quote:
    Originally Posted by samab View Post


    French court ordering the end of iphone exclusivity and forced when and how unlocking codes should be given --- those are idiotic regulations that are ineffective. You want the French citizens to benefit --- bring in a fourth national carrier, preferabily a foreign one.



    Oh, idiots do kindly sometimes. They are allowed to.

    And how so? Why are their regulations ineffective? Say, everyone in my team has iPhone, and 40% of us have Orange iPhones, 30% have SFR iPhones and 30% have Bouygues iPhones. We compete!
  • Reply 19 of 51
    samabsamab Posts: 1,953member
    Having the ability to buy the iphone from all 3 carriers at inflated prices are not very good for consumers.
  • Reply 20 of 51
    richlrichl Posts: 2,213member
    This is happening 25 years too late. The US government should have mandated a single wireless technology (GSM, CDMA, it doesn't matter), banned phone locking and enabled number portability decades ago.



    Quote:
    Originally Posted by samab View Post


    The only industrial country where there is even less market concentration is UK where their largest carrier, O2, owns 27% of the UK market. But there are constant news report of T-Mobile UK getting out of the UK market --- which will mean that whoever buys them out will become the top UK carrier with about 40% of the UK market.



    If one of the current UK operators bought T-Mobile, they would be required under law to hand back T-Mobile's wireless licenses to the government. Thus, another player would be able to join the market.



    And that's if they got the go-ahead of the EU competition commission.
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