CCA urges FCC to form task force focusing on wireless competition

The Competitive Carriers Association urged the FCC to form a special wireless competition task force to explore several key issues it argues are interrelated, such as spectrum aggregation and spectrum auctions. The issues the CCA wants the task force to look at are ones the group, which represents the interests of small carriers, has argued for in the past, but the CCA now says the FCC needs to look how the issues are connected.

In a white paper, the CCA said that "policymakers routinely affirm that ensuring effective competition in the wireless industry is of paramount importance. But translating words into action will require a comprehensive and concerted vision and an urgency of purpose involving personnel throughout the Commission--a project particularly well suited to an agency-wide Task Force."

The white paper, called "A Framework for Sustainable Competition in the Digital Age: Fostering Connectivity, Innovation and Consumer Choice," argues that the task force should focus on analyzing, developing, and implementing proposals for promoting wireless competition in six distinct areas. Many of the areas are ones in which the FCC already has open proceedings or is pushing for rule changes.

The six areas are:

  • "Overhauling the Commission's 'spectrum screen' to assess market concentration more accurately and to strengthen the Commission's competitive review of wireless transactions." 
  • "Conducting fair and procompetitive spectrum auctions." 
  • "Ensuring commercially reasonable access to data roaming arrangements."
  • "Maintaining essential access to wireline facilities and interconnection as the telecommunications industry transitions to Internet Protocol technology." 
  • "Promoting unfettered access to wireless devices," which FCC Chairman Tom Wheeler has touched on with his support for rule changes to unlocking devices.
  • "Reestablishing competitive neutrality in the Commission's high-cost universal service support mechanisms."

FCC representatives did not immediately respond to requests for comment.

In the white paper, the CCA argues that during the past decade, Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) have gobbled up subscribers, especially via acquisitions of smaller carriers, and spectrum, to the detriment of wireless competition. CCA notes that at the end of 2002, Verizon, AT&T Wireless and Cingular (which merged into what is now AT&T Mobility) had around 53 percent of all U.S. wireless subscribers, and that at the end of 2012 the two carriers had more than 68 percent of subscribers.

"It is no wonder that today as the Commission's own competition reports show, the wireless industry has become increasingly consolidated," the CCA wrote. "The inevitable result has been a decline in the competitive benefits flowing to consumers. As the industry edges ever closer to a duopoly, with AT&T and Verizon dominating the marketplace and foreclosing opportunities for smaller rivals--while simultaneously upending the promise of wireless substitution for wireline services and the concomitant benefits of such intermodal competition, the Commission must reexamine whether its rules and policies are promoting competition effectively."

In an interview with FierceWireless, CCA President Steve Berry acknowledged that the CCA is asking the FCC to formally investigate what is largely CCA's existing policy agenda, but that the commission needs to do so because in the past it has looked at all of the issues as separate, when he argues they are interrelated. "The FCC, under the last three chairmen, has been unwilling to connect the dots," he said.

Berry said Wheeler has made no secret of his desire to maintain competition. "Let's see if we can get the FCC to look at this from a concept of what helps support an enduring, competitive policy," he said.

For example, Berry said that "spectrum aggregation is directly related to the competitive marketplace. Spectrum aggregation rules will be directly related to the spectrum auction itself," he said, referring to the forthcoming incentive auctions of 600 MHz broadcast spectrum. Berry said if the FCC decides to license spectrum in only major markets as part of the auction, it will effectively shut out smaller carriers from bidding.

Even in the aftermath of that auction and others coming up in the year ahead, there will be secondary market transactions to swap spectrum, Berry said, meaning that the FCC needs rules in place to promote competition and prevent spectrum consolidation.

Berry also acknowledged that if the FCC does form a task force and focus on the issues the CCA has outlined, there might not be much of a need for the CCA. "Our purpose here is not to guarantee that we'll be around next year," he said. "Our purpose is to win on these issues and to provide relief for every one of our carrier members. They hire me to put together an agenda that would put us out of business." Still, he said, even if all the issues were resolved to the CCA's satisfaction, there "will be another issue that crops up."

For more:
- see this report (PDF)

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