Telecommunications: Enhanced Data Collection Could Help FCC Better Monitor Competition in the Wireless Industry Page: 2 of 57
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Accountability Integrity* Reliability
Highlights of GAO-10-779, a report to
Why GAO Did This Study
Americans increasingly rely on
wireless phones, with nearly 40
percent of households now using
them primarily or solely. Under
federal law, the Federal
(FCC) is responsible for fostering a
competitive wireless marketplace
while ensuring that consumers are
protected from harmful practices.
As requested, this report discusses
changes in the wireless industry
since 2000, stakeholders'
perceptions of regulatory policies
and industry practices, and the
strategies FCC uses to monitor
competition. To conduct this work,
GAO collected and analyzed data
and documents from a variety of
government and private sources;
conducted case studies in both
rural and urban areas of four
states; and interviewed
consumers, local and state
agencies and officials, and various
segments of the industry.
FCC should assess whether
expanding original data collection
of wireless industry inputs and
outputs-such as prices, special
access rates, capital expenditures,
and equipment costs-would help
the Commission better satisfy its
requirement to review competitive
market conditions with respect to
commercial mobile services. FCC
took no position on GAO's
recommendation, but provided
technical changes to this report
that were incorporated as
View GAO-10-779 or key components.
For more information, contact Mark Goldstein
at (202) 512-2834 or email@example.com.
Enhanced Data Collection Could Help FCC Better
Monitor Competition in the Wireless Industry
What GAO Found
The biggest changes in the wireless industry since 2000 have been
consolidation among wireless carriers and increased use of wireless services
by consumers. Industry consolidation has made it more difficult for small and
regional carriers to be competitive. Difficulties for these carriers include
securing subscribers, making network investments, and offering the latest
wireless phones necessary to compete in this dynamic industry. Nevertheless,
consumers have also seen benefits, such as generally lower prices, which are
approximately 50 percent less than 1999 prices, and better coverage.
While views differed among stakeholders, some carriers and consumer groups
perceive certain FCC wireless policies as having prevented the entry and
growth of small and regional carriers, though it is difficult to assess some of
these issues without better data. In particular, many stakeholders outside of
the top national carriers who we spoke with noted that policies for making
spectrum available for commercial use, as well as policies governing some
essential elements of wireless networks, favor large national carriers,
potentially jeopardizing the competitiveness of the wireless industry. One
such essential element is special access to infrastructure that connects cell
phone towers to wireline phone networks. Better data on rates governing
those elements would clarify the extent to which competition is hindered.
Additional data are also necessary to determine whether consumers are
hindered from moving between wireless carriers by particular industry
practices. Many small carriers and consumer groups perceive early
termination fees associated with wireless service contracts and exclusive
handset arrangements as creating switching costs that serve as barriers to
FCC uses three strategies to oversee and monitor competition in the wireless
phone industry: reviews of proposed mergers, investigations of competitive
challenges, and its annual wireless competition report to Congress. In
assessing mergers, FCC balances potential public interest benefits and harms.
FCC has also undertaken a variety of investigations and inquiries related to
competitive challenges, generally in response to complaints. The primary tool
that FCC uses is the annual wireless competition report. While FCC recently
undertook steps that significantly improved this report, it still does not fully
assess some key industry inputs and outputs. FCC generally has not collected
data on many industry investments or consumer switching costs because of
the complexity and burden associated with gathering these data. However,
FCC has recently undertaken ad hoc inquiries to collect such data and, despite
challenges and costs, this information could help FCC better fulfill its
statutory reporting requirement. In particular, additional data could help
assess the competitiveness of small and regional carriers, as well as shed light
on the impact of switching costs for consumers.
United States Government Accountability Office
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United States. Government Accountability Office. Telecommunications: Enhanced Data Collection Could Help FCC Better Monitor Competition in the Wireless Industry, report, July 27, 2010; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc300859/m1/2/: accessed September 21, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.