CMRS Competition Flourishing—FCC Annual Report
Competition is flourishing in the CMRS (commercial wireless) marketplace, the FCC said Thurs. in its annual CMRS competition report. In a development that was a surprise to carriers, FCC revealed that for the first time it’s doing an HHI analysis of competitiveness in individual regions, which is the analysis instrument the Justice Dept. uses.
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The FCC didn’t provide more details on its HHI analysis. Among the numbers released, FCC said 97% of the U.S. population lives in a county with access to 3 or more competing carriers, compared to 95% the previous year and 88% in 2000. The FCC said subscribership increased from 141.8 million to 160.6 million during a 12-month period through the end of 2003. The nationwide penetration rate stands at 54%. The report, which wasn’t available Thurs. -- only summary details were provided -- provides a more complete report on competition than the 8 previous annual reports, the Commission said. The report is being watched especially carefully this year given the Cingular-AT&T Wireless merger and other expected wireless carrier consolidation.
Comr. Copps, a critic of past reports, said the FCC had made substantial progress in the sophistication of how it examined competition, particularly with the HHI analysis. He said the report “still contains arguments and omissions that trouble me,” particularly on how the FCC classifies “effective competition… Yet again this year the report does not provide a useful definition of this term. Without a well-articulated ‘effective competition’ standard, the report will always have trouble providing an analytically solid foundation for Commission or Congressional action.”
Comr. Adelstein said the report shows that some markets, like his hometown of Rapid City, S.D., still don’t have adequate competition: “Spectrum is out there. We just need to get it in the right hands and in the right form… We have obviously more to do but we do have some success as witnessed by this report.”
“This is becoming an annual occasion of recognition for the wireless industry, where regulators praise us for ensuring healthy market competition,” said CTIA Pres. Steve Largent. “The industry will continue to operate successfully in this competitive market in order to serve consumers well, as long as regulators continue to recognize our success is based on market forces, not costly government regulation.”