Because the Key to Wireless Competition is More Bureaucracy

If the FCC is to pursue "jurisdiction over everything," what's next on its list? How about the wireless industry?

Tomorrow, the FCC will release yet another report on the state of the U.S. wireless industry. Its last report, in 2008, reported that the industry is competitive—a conclusion I agree with. It's not yet known how tomorrow's report, which will rely on data collected in 2008, will read. But if the report were to decline to label the industry competitive, as multiple industry-connected sources I've spoken to believe is likely, it would almost certainly signal that the agency is intent on clearing the way to impose a wireless version of the Net neutrality regulations that have been giving it so much trouble recently.

It's possible to make a reasonable argument that the country's wireline broadband industry is insufficiently competitive (though that doesn't make regulation necessary). But contrary to the constant protestations of folks like Columbia University's Tim Wu, the wireless phone market, while certainly imperfect, is far from short on competition.

By at least one measure, the U.S. market is the least concentrated in the OECD. Other reports make strong cases that innovation is thriving. And according to CTIA, an industry group representing wireless companies, the U.S. wireless market services more than 600 devices and is one of only two countries with more than five wireless providers.

Some of those are industry-provided figures, so feel free to take them with a grain of salt. But I think when it comes to the basic question—do wireless-industry customers lack choice of devices, networks, or applications?—the answer is pretty clear: No. And part of the reason, particularly when it comes to devices, is that competition has already worked.

When wireless Net neutrality first became an issue in 2007, Wu wrote a paper that focused on the then-new iPhone. He suggested that Apple's exclusive contract with AT&T was a reason to impose a rule that would require all carriers to open up their networks to any device. And, he argued, doing so would spur innovation amongst device makers who could be assured that their devices wouldn't be limited to a single network.

But what he missed was that allowing carriers to cut exclusive deals with phone makers would create incentives for carrier/device-maker partnerships to create new phones. And that's arguably a big part of the reason why consumers now have a fleet of high-end smartphone alternatives to the iPhone. After the success of Apple and AT&T, both carriers and device-makers wanted a must-have smartphone of their own.

Are there legitimate gripes about wireless service providers? Absolutely. There are weeks when I'm pretty sure my AT&T-connected iPhone drops more calls than it doesn't. But, thanks in large part to increased mobile web access and speed, I'm far happier with my wireless service now than I was a few years ago—which may help explain why overall wireless customer satisfaction ratings are on their way up. I think if anything, what the last few years have demonstrated is that although the wireless market is imperfect, it can and will improve—and without FCC meddling .

Last summer, I noted early indications that the FCC might be pursuing wireless Net neutrality.

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  • Pip||

    WHO THE FUCK ARE THESE PEOPLE AND WHY ARE THEY STIL BREATHING???

  • The Prophet Mohammed||

    That lewd depiction of a woman of the faith at the beach is haram. Jackin'. DEATH TO THE

  • Coeus||

    Guess I was wrong about new broadband technologies keeping them from implementing federal control. And just when I was beginning to think I was finally cynical enough.

  • ||

    It seems like Darth Vader could use the Force to get the water into the Brita while he sits back and has a beer. Oh, is that why the picture makes no sense?

  • ||

    I would imagine Lord Vader is using all of his Force powers to bring that sea of water to him for purification. You see, that photo was taken in Des Moines.

  • Darth Sidious||

    Considering the seat of my power is Tupelo, MS, it illustrates why I am the Master and he the Apprentice.

  • Paul||

    win

  • ||

    "And that's arguably a big part of the reason why consumers now have a fleet of high-end smartphone alternatives to the iPhone. After the success of Apple and AT&T, both carriers and device-makers wanted a must-have smartphone of their own."

    But the most innovative and popular Smartphones that are not Apple (Android and Blackberry) were created independent of the carrier. The carriers only bought the devices once they were developed.

    It's because AT&T has such a hold on the iPhone that they don't improve their network. If the iPhone were available on Verizon, don't you think they would want to compete network to network (their product is supposed to be the network after all) as opposed to phone to phone?

  • Paul||

    It's because AT&T has such a hold on the iPhone that they don't improve their network. If the iPhone were available on Verizon

    Looks like Copps and the FCC are too late! Damn, if only they had regulated!

    A section believes the iPhone 4G release is slated at WWDC in June this year whereas based on WSJ’s March report on Verizon iPhone its release date is being expected around fall 2010.

    One of US biggest carrier AT&T today said that it is not worried with the news of a Verizon iPhone debuting this year.
  • ||

    It's only a matter of time before AT&T once again controls all of America's telecommunications.

  • The Gobbler||

    It's only a matter of time before AT&T the Federal Government once again controls all of America's telecommunications

  • The Gobbler||

    Bush was just the warm-up act.

  • mr simple||

    I have yet to hear a good argument for why the FCC should b concerned with anything more than making sure radio and tv stations don't interfere with each others frequencies.

  • anarch||

    The decisions it makes, have about as much sense as that comma-splice.

  • cynical||

    Even if there is some sort of call for antitrust meddling, surely that ball belongs in the court of the FTC, not the censors/frequency peddlers in the FCC.

  • TP||

    It's ironic that AT&T's biggest competitor is a former Baby Bell. For those who don't live in the NE, Verizon used to be Bell Atlantic.

  • IceTrey||

    The stupid FCC is the reason we don't all have gigabit wireless internet, because they won't license high power Ultra-Wide Band radio.

  • Hobie Hanson||

    This is just the beginning of finally catching up to the rest of the modern industrialized world in communications regulation. My FCC connections tell me this product is next on the list of unregulated telephony products that will be subject to rational oversight. It's incredible that big corporations have been marketing these devices to children for all these years, when they are not capable of accessing emergency 911 services, and can't be monitored by law enforcement to catch sex predators who attempt to call children who own them.

  • ||

    Tucked down here in Canada I work for one of the established Wireless carriers. For the past 10 years all we have done is roll out new equipment, expand our backbones and plan for the next upgrade. In between we try to squeeze our noise levels and reduce drop calls, down to 0.1% increments. The Marketing has folks expecting wireline performance but RF aint magic. Ever creep forward at a light to get the radio station back? The Market drives my company to be always better. Maybe the monthly cost is too high, but we are spending that cash on the network...

  • ||

    OH no, please no more red tape. no no no

    Lou
    www.web-anonymity.cz.tc

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