The FCC’s 16th Wireless Competition Report is out and, as has been widely reported, the good news is abundant. This year’s report achieves new analytical depth and breadth, and marshals an impressive picture of the U.S. wireless industry.
Virtually everyone in the U.S. now has access to mobile voice and broadband service (99.9% and 99.5%, respectively), and 82% of Americans can choose from between at least four facilities-based mobile broadband providers. Investment in U.S. wireless networks is growing at a rate that is the envy of other countries, with total 2011 investment topping $25 billion and LTE deployments expanding rapidly.
And U.S. consumers are reaping the competitive benefits. Americans are embracing smartphones in record numbers (67% chose smartphones in 2012), mobile data traffic continues its exponential growth, and unit prices, for both minutes and megabytes, are falling. In fact, the Report’s CPI analysis shows that U.S. wireless services are a bargain – since December 1997, the CPI for wireless services has declined by 40% while the overall CPI increased by nearly 40%.
At bottom, the FCC’s own data decisively rebuts the argument that the U.S. is somehow falling behind other countries. That Big Lie has been peddled and pushed by some in order to justify more government control over the wireless industry – a goal rooted more in ideology than in any competitive concern or consumer outcry. It is also an argument pushed by some businesses that would rather compete through regulatory fiat than with investment and innovation. No longer can either argument withstand the overwhelming facts to the contrary.
Yet the question remains: why does the FCC refuse to draw the conclusion its own report makes factually irresistible – that the U.S. wireless market is effectively competitive? Is it worried about offending voices who will be unsatisfied with anything short of government control? Frankly, I think not. My own worry is that the Commission continues to refuse to draw the obvious conclusion because it fears that, by deeming the wireless market competitive, it will limit its own rationale for regulatory intervention. Indeed, if the FCC acknowledged the reality of the wireless market – that consumers have the best wireless services and the widest range of competitive choices on the planet – the Commission would be compelled to defer to the decisions made by consumers in that marketplace rather than push its own preferences.
More pointedly, I worry that the intent is to use the current spectrum screen proceeding to control participation in the incentive auction – contrary to Congress’ stated intent. If true, then one might begin to discern why the agency will not admit what its own facts dictate.
These concerns may be wholly unfounded – and I truly hope they are misplaced. I won’t pretend to understand the motivation behind the “no conclusion” approach. But I’m not the only one puzzled by the FCC’s repeated refusal to do what Congress directed them by law to do, and to admit what their own report seems to compel. I also wonder why the FCC would bolster its “expert agency” reputation with a genuinely commanding report, only to then undermine its credibility by a continuing refusal to conclude the obvious.
It’s been said that facts are stubborn things. One can deny them for a while, but eventually reality intrudes. That will happen here too. I just hope that it occurs before any misguided regulatory agenda turns today’s good news wireless story of competition, investment and innovation into a story of failed auctions, un-built public safety networks, and lost opportunity.