Questionable Research On "Decreasing" Competition In Mobile Industry

According to a new report from the Phoenix Center for Advanced Legal and Economic Public Policy Studies the Cingular purchase of ATTWS will cause a reduction in competition such that cellular “prices could rise as much as 8 percent”. We say that’s bunk. Although the report throws around a lot of big words (which put my BA in Econ to the test), the Center seem to be unaware that the US market has been characterized by over-competition for most of its history, thus customers have been forced to pay for multiple, redundant infrastructures for each of the operators. Furthermore, recent WLNP legislation has increased competition such that the carriers responded with lower rate plans. The center also seems unaware of the entry of MVNOs and the high number of those competitors that are looming in the wings. The center also seems oblivious to the vast number of foreign nations that have as few as three carriers yet still have rabid competition, and often lower prices than the US. The empirical evidence is also against them: every carrier in the US has seen ARPU drop over the last six months. I’m not sure what the motives of this Center are, but I have serious doubts about their conclusions.

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