FCC Divides Sharply on Wireless Competition Report

“The facts are what they are,” said Chairman Ajit Pai. Objections to finding the industry competitive are based on ideology, he said. “To those who want to impose more regulation upon the wireless marketplace, the reality of effective competition is an inconvenient truth that must be discounted or ignored,” he said. “The commission begins with the facts, not the conclusion.”

The report offers data from 2016 and early ’17 “and conducts an analysis of those data based on various generally accepted metrics of competition,” said a news release. “Consumer demand and output continue to increase, average prices have been falling, and service providers have enhanced the performance, coverage, and capacity of their networks.”

Everyone hypes the coming of 5G, Clyburn said. “The reality” is “far too many in this country do not have reliable and affordable 3G service,” she said. Based on some reports, more than 20.5 million Americans don’t have access to all four national carriers. She said that “how then can this commission conclude that the mobile wireless market is effectively competitive?”

The report fails to define “effective competition,” Rosenworcel said. “Instead of a definition of this essential threshold, we have all manner of apologies and admissions,” she said. “We are told there is no single definition used by economists or policy authorities. We are told that upstream and downstream market segments involving network equipment, operating systems, and applications are outside the scope, and yet the core of what is effective competition remains undefined.”

Rosenworcel said consolidation is a further threat to competition. “While this report celebrates the presence of four nationwide wireless providers, let’s be mindful that a transaction may soon be announced that seeks to combine two of these four,” she said. Pai said during a news conference the report can’t possibly take into account potential deals.

Commissioner Mike O’Rielly said in finding the industry to be effectively competitive, the agency is drawing the right conclusion for the first time in eight years and following the law as it sends to Congress the required annual report. The FCC has work to do, he said. “We will leave this meeting and continue our mission to create an environment that promotes innovation and investment, so that consumers will benefit not only from network improvements, next-generation technologies and new service offerings, but hopefully future new entrants.”

Wireless prices are falling, speeds are increasing and networks are expanding, and for the first time a majority of U.S. households are wireless-only, said Commissioner Brendan Carr. “The facts make it abundantly clear that this is a competitive market and that consumers are the beneficiaries.”

“The FCC’s 3-2 vote finding effective competition is purely a political one aimed at reinforcing the rationale for reclassification away from Title II in the net neutrality proceeding and, possibly, an attempt to lay the groundwork to approve a merger between T-Mobile and Sprint,” said Michael Calabrese, director of the Wireless Future Program at New America. But CTIA, the Wireless Infrastructure Association and other industry commenters said the agency was back on track. “After an eight-year hiatus -- during a period when competition in the wireless industry has been red hot -- we are pleased that the FCC has again concluded that mobile wireless service is effectively competitive,” blogged AT&T Senior Vice President Joan Marsh.

FCC Meeting Notebook

The FCC agreed 5-0 Tuesday to seek comment on a proposal to reduce the “regulatory burden” on smaller carriers of complying with hearing-aid compatibility (HAC) rules. The proposal would cut a requirement that small, rural and regional carriers file an annual report on the number and models of HAC handsets they offer. It asks whether the FCC could rely on informal complaints and other sources of information to identify instances of noncompliance by small providers instead of annual reporting requirements, said a news release. The NPRM also seeks data for a cost-benefit analysis of the proposed reporting exemption. Pai said the FCC doesn’t intend to reduce the number of handsets available for the hearing impaired. Instead, the NPRM is part of a larger program of cutting red tape, he said: “All we would be doing by simplifying our HAC compliance reporting efforts is helping small providers shift resources from unnecessary reporting to better services for their customers.” Clyburn is "particularly interested in understanding exactly how onerous these reporting requirements are for non-Tier 1 providers, whether the information collected by the commission in these reports is available elsewhere, and what impact any further commission action would have on consumers with hearing disabilities." And Rosenworcel said that “what does not change is that hearing loss is a big deal” and more than 30 million Americans experience problems.

Commissioners unanimously approved an NPRM on eliminating a rule requiring some broadcasters and MVPDs to keep a hard copy of FCC rules in their offices, as expected (see 1709060073). Licensees still will have the option to keep a hard copy, and still will be required to know the rules, the item said. Keeping a hard copy is no longer necessary, with the rules easily available online, Pai said. The item was the first example of a planned monthly effort to do away with outdated commission rules. Clyburn is “skeptical” future deregulation under the monthly plan would benefit customers, but she supported this proposal. Rosenworcel and O’Rielly said they would skip making statements because of the item’s extreme brevity. Carr said the rule had long “outlived its usefulness.”

Pai said the FCC is focused on improving its Form 477 collection of industry broadband and voice data and how it's used, particularly for USF subsidy support. The commission also is working on ways to bring digital opportunities to tribal communities "desperate for broadband," he said, at Tuesday's post-meeting news conference responding to a reporter's question about a tribal complaint regarding CenturyLink's use of USF support. Meanwhile, the California Public Utilities Commission backed a possible FCC move to annual collection of Form 477 data, from the current collection every six months. The CPUC supported "requiring collection of broadband deployment (availability) data" and "mobile broadband and voice subscription data" at a more granular geographic levels, it commented in docket 11-10 Monday, the comment deadline on an NPRM (see 1708030026) before the FCC extended it to Oct. 10. The state agency backed "field testing of mobile broadband speeds for much higher accuracy," and "more detailed reporting requirements for satellite services." The National Digital Inclusion Alliance called certain 477 subscription and deployment data "uniquely valuable for community research and analysis aimed at digital inclusion." It said the current system requiring fixed service providers to report, for each technology used in a census block, only the maximum advertised download and upload speeds available to a single residential customer in the block "has the effect of exaggerating the speeds available." It called a possible FCC solution "an unduly complicated approach to a simple problem," and suggested the agency require providers to list speed tiers offered by their technologies in each block and the number of households with the maximum tier available.

O'Rielly suggested the FCC still had no concrete plan for a USF Remote Access Fund and said the agency will "probably have no money left for the RAF." He was responding to a reporter's question, after the commissioners' meeting, about fiber deployments and technological neutrality. He said fiber is important, but there isn't enough USF money to bring fiber to all homes. Meanwhile, Kansas providers told Pai a USF budget "shortfall" is hurting their efforts "to deploy broadband infrastructure and close the digital divide." They asked Pai to direct the commission "to perform a full review of the high-cost budget before the end of the year" and to provide more details about the agency's plan to move USF money to the U.S. Treasury from an account controlled by Universal Service Administrative Co, said a filing posted Tuesday in docket 10-90 on a meeting dozens of executives had after the chairman's speech at a Kansas broadband conference (see 1709210066). Kansas Fiber Network's president asked Pai for help in addressing long-distance carrier refusal to pay KFN's tariffed rates for tandem switched transport access service.

Pai declined to say when the FCC would move forward with next steps on the 3.5 GHz and 5.9 GHz bands, both key to Wi-Fi and unlicensed spectrum. On 3.5 GHz, Pai noted only that he has asked O’Rielly to examine potential rule changes. O’Rielly said an NPRM is likely in the fall on revised rules, but there has been no official word from the FCC (see 1707250049). Pai considers 5 GHz spectrum important to the future of unlicensed: “It presents the opportunity for the next generation of Wi-Fi.” Not offering any time frame, Pai said "if you know anything about this commission, you know that we're pretty active, we'll always try to take action as quickly as we can."