Little Common Ground Seen in Fight on State of Wireless Competition

The FCC should ensure rural Americans are able to “receive the same high-quality wireless service as their non-rural counterparts,” said the National Telecommunications Cooperative Association. The agency should prohibit exclusive handset agreements between wireless providers and manufacturers, the NTCA said. The agency should require automatic data roaming between carriers, increase spectrum availability based on smaller geographic areas and require large carriers to part with unused spectrum after a reasonable build-out period, the group said. Failure to reform these policies would foster a competitive disadvantage among small and rural wireless service providers, it said.

Representatives from rural telecom and wireless groups called for the FCC to prohibit handset exclusivity agreements, which the Rural Telecom Group and the Rural Cellular Association deemed “anticompetitive.” The FCC needs to extend automatic roaming obligations to data services, the rural groups said. It needs to revamp spectrum auction policies and impose a spectrum cap to encourage more competition and better service in rural markets, they said. These changes are necessary to prevent the further consolidation of service providers into a duopoly, they said.

MetroPCS said the FCC needed to do more to increase access to wireless data roaming services, spectrum and the latest handset technologies. The “wholesale market for roaming services and special access is broken and the market for wireless equipment is becoming broken,” the company said. Primary carriers were applying prohibitively expensive rates to wireless data roaming services and using exclusive handset arrangements to hamper the ability of small, rural and mid-tier carriers to compete, it said. The FCC needs to revise auction rules to encourage competitive entry in spectrum auctions and seriously consider MetroPCS’s proposed Broadband Incentive Discount, it said.

The competition report shouldn’t serve as a basis for future reports, CTIA said.

Next year’s report “must return to making a finding of effective competition” based on statutory mandate, among other things. This report contains significant, material, factual and “methodological” errors that must not be perpetuated in future reports, the trade group said. Free Press praised the more comprehensive approach in this report and urged the commission to focus even more attention on mobile wireless broadband and to recognize the persistent lack of effective competition for all mobile wireless services.

Non-profit groups and the carriers disagreed on wireless investment trends. Data used by the FCC’s competition report doesn’t capture all relevant investment, including new greenfield projects and spectrum acquisition, CTIA said. The report overstated the relevance of the capital expense/revenue ratio and understated investment by the largest providers, Verizon said. Profitability isn’t a reliable indicator of competition, it said. Mobile Future highlighted “the recession-proof investment in next-generation networks.” Free Press said various data show a decline in investment as a percentage of revenue. That’s indicative of an insufficiently competitive market, it said.

The report failed to make an effective finding and placed undue emphasis on “continued industry concentration,” Verizon said. It claimed the report’s spectrum analysis is flawed, saying the 1 GHz line as a measure of competition is unsupportable. Exclusion of mobile satellite services and wireless communication service spectrum suitable for mobile wireless services is wrong, Verizon said. The report also failed to attribute Clearwire Spectrum to Sprint, it said.

Sprint urged the FCC to address the critical inputs that AT&T and Verizon control over the wireless industry, saying the agency should resolve a special access backhaul investigation and revamp intercarrier compensation regime. Sprint applauded the report because the FCC for the first time in its annual reports analyzed competition across the entire mobile ecosystem, it said.

Competitive wireless infrastructure facilitates competition in the wireless industry, said PCIA. Collocation continues to be the most economic means to deploy wireless networks, reducing capital expenses and speeding time to market, it said. PCIA emphasized barriers to deployment at the local level, citing jurisdictions and other elements of local zoning review. It urged the FCC to examine its preemptive authority over “burdensome” local regulations, particularly for efficient infrastructure deployments like collocations. Congress should step in if the FCC determines it doesn’t have the authority to remove the barriers, PCIA said.

Recent progress by mobile satellite services/ancillary terrestrial component companies validates the FCC’s decision to authorize ATC licenses, the MSS/ATC Coalition said. The substantial investment in deploying terrestrial services will likely result in more-efficient spectrum use and competition, said the group, which includes DBSD, Globalstar, Inmarsat, LightSquared and TerreStar. Increased flexibility for MSS/ATC operators would likely boost investment in the future, they said. The agency recently began a proceeding aimed at increasing the use of ATC spectrum for terrestrial broadband (CD July 16 p1). MSS companies are uniquely suited to provide communications services to rural areas and regions hit by disasters, said the Satellite Industry Association. Because of inherent challenges in using satellite services in more urban areas, mobile satellite companies focus on different market segments than terrestrial mobile wireless providers, said the SIA.