Commentary

FCC Neutral On Wireless Competition, Commissioners Show Leanings

FCC-Seal

In its annual assessment of competition in the wireless industry, the Federal Communications Commission once again took a neutral stance. In a 304-page report issued Monday, the FCC said for the second straight year that the U.S. wireless market has grown more concentrated. But it held back from a formal finding "as to whether there is, or is not, effective competition in the industry."

Because the report provided no clear signal of how the FCC might rule on AT&T's proposed $39 billion acquisition of T-Mobile, it proved confounding to both supporters and opponents of the deal. Each side would surely like a stronger indication on how the agency will react to the deal that will reduce the number of U.S. major carriers from four to three (with AT&T and Verizon Wireless being much larger than Sprint).

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Even on the issue of mergers within the industry, the FCC took a Solomonic stand, finding that "a merger can potentially form a stronger provider that restrains competitors from engaging in anticompetitive behavior, or may increase the likelihood that the merged firm may itself, or in coordination with other firms, would obtain or maintain market power."

The separate statements issued by the FCC commissioners, excluding Chairman Julius Genachowski, in connection with the report, however, shed more light on how they view wireless competition. Michael J. Copps and Mignon Clyburn, both Democrats, placed a greater emphasis on areas where inequities remain. Copps, for instance, referred to "darkening clouds over the state of mobile competition," citing trends of industry consolidation, stagnating pricing, and a "looming spectrum crunch."

Copps had expressed skepticism about the ATT-T-Mobile deal in prior comments.

Republican commissioner Robert McDowell, by contrast, was more sanguine about the state of industry competition. "At its core, the report shows that the wireless sector is dynamic, ever-improving and responsive to consumer demand," he wrote. Each of the commissioners concurred with the report's findings, however.

Genachowski hasn't commented directly on AT&T's proposed takeover of T-Mobile to date, and his lack of a statement in the wireless competition report means no more insight on where he stands on the deal or competition more broadly. That's likely how he wants to keep it until the agency rules on the matter.

In that vein, a group of seven public interest and consumer groups Tuesday sent Genachowski a letter requesting that he hold public field hearings around the country on the AT&T-T-Mobile merger to increase public participation in the proceedings. Among the groups are Consumers Union, Public Knowledge and Free Press. A Congressional hearing was held last month on the merger.

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