Wireless

by Karl Bode


Filed Under:
ajit pai, competition, fcc, mergers, wireless

Companies:
at&t, sprint, t-mobile, verizon



Mission Accomplished: Ajit Pai's FCC Declares Wireless Competition Issues Fixed

from the ignore-a-problem-and-it-goes-away,-right? dept

The FCC is required by law to offer an annual report on the state of competition in the broadband industry. Depending on who's in power, and how eager they are to downplay the lack of said competition to the benefit of industry, these reports often provide comical insight into how the regulator fiddles with data to justify policy apathy. Under George W. Bush's presidency, the FCC declared the wireless industry perfectly competitive. Under the Obama administration, the FCC refused to state one way or the other whether the sector is competitive. Neither party has what you'd call courage when it comes to calling a spade a spade.

Fast forward to this year, and you likely won't be surprised to learn that the Ajit Pai led agency has declared the wireless sector perfectly competitive -- for the first time since 2009. In a press statement, Pai declared (pdf) that the re-introduction of unlimited data plans, prompted in turn by a resurgent T-Mobile, is proof positive that the sector is perfectly healthy and "fiercely competitive":

"The 20th Report reviews many factors indicating that the wireless marketplace is, indeed, effectively competitive. I won’t repeat them here; that’s why we have the report. But looking at the bigger picture, most reasonable people see a fiercely competitive marketplace. For example, since the FCC’s last report in 2016, all four national carriers have rolled out new or improved unlimited plans. This is strong, incontrovertible evidence.

And looking at the wireless industry from a superficial level, many would likely agree. But look under the hood and things aren't quite as rosy as Pai would lead you to believe. For one, even with T-Mobile disrupting AT&T and Verizon, these companies still largely engage in theatrical non-price competition, resulting in Americans paying more money for slower speeds than most developed nations. There's also the fact that AT&T and Verizon have a duopoly stranglehold over the special access and tower backhaul market, allowing them to drive up operational costs for competitors like T-Mobile and Sprint.

Pai also just floats right over the other major elephant in the room: the looming merger between Sprint and T-Mobile, which is expected to be formally unveiled in a few weeks. Every analyst in telecom worth their salt expects Pai to rubber stamp the deal, despite the obvious, major competitive impact of reducing the number of major carriers in the space from four to three. Pai's fellow Commissioner Jessica Rosenworcel, who voted down the cocksure declaration of industry health, was quick to highlight this problem in her own statement (pdf) on the decision:

"Like everyone else, I read reports of mergers waiting in the wings. So 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. While the Commission should not prejudge what is not yet before us, I think this agency sticks its collective head in the sand by issuing this report and implying move along, there is nothing to see here."

Oddly, news outlets like Reuters were quick to somehow insist that declaring the industry perfectly competitive (when under the surface it still really isn't) will somehow "help Sprint and T-Mobile to merge":

"A divided Federal Communications Commission on Tuesday approved a report that found for the first time since 2009 there is “effective competition” in the wireless market, a finding that could help Sprint Corp and T-Mobile US Inc to merge."

But on what planet does a partisan, arbitrary declaration of industry health make it OK to dramatically reduce sector competition further? That's the kind of flimsy logic and mindless megamerger cheer leading you're going to see a lot of the next few months as the industry -- and the policy folk and politicians paid to love them -- tries to convince the public that reducing wireless competition even further in the States is a really wonderful idea.


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  • icon
    Anonymous Anonymous Coward (profile), 27 Sep 2017 @ 11:57am

    Wireless Competition Issues Fixed

    What a relief. I am so glad that issue is no longer a bother. Now I get to choose between 4 (soon to be 3) wireless carriers, if they: exist in my area, have a plan that satisfies my needs, have a decent customer service department, charge reasonable prices, and don't charge too much when I have to use someone else's network because they don't cover everywhere.

    I am more glad I don't have a phone.

    reply to this | link to this | view in chronology ]

  • identicon
    Baron von Robber, 27 Sep 2017 @ 12:06pm

    I guess the allowable number of companies to be merged to equals the maximum numbers Trump and Pai can count to: 3.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 27 Sep 2017 @ 12:26pm

      Re:

      DANGER - DANGER - ONE-LINER OVERLOAD Venting one-liners ... "That explains the appointment of Betsy DeVos as Secretary of Education." "That's one better than Valve." (Alternately: "HL3 confirmed.") "That's not true! We've heard him count to 7-Eleven!" "That certainly explains how he can think, despite all evidence, that he had both a historic victory and the biggest inauguration crowds ever." "I'm surprised he can even count that high, with fingers that small." "If that's true, we're lucky: he should leave the White House voluntarily a year before his term is up!"

      PRESSURE EQUALIZED. VENTING COMPLETE.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 27 Sep 2017 @ 12:50pm

      Re:

      Whoa, when did they get past one?

      reply to this | link to this | view in chronology ]

  • identicon
    Michael, 27 Sep 2017 @ 12:10pm

    "For example, since the FCC’s last report in 2016, all four national carriers have rolled out new or improved unlimited plans. This is strong, incontrovertible evidence."

    Unless you want to discuss the meaning of the words "unlimited", "new", and "improved".

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 27 Sep 2017 @ 12:14pm

    I wish we could force them to have phones on all the various carriers, who don't know who they are.
    I'd love them to stare at the bills shocked with how us little people are treated.

    They live in a bubble where they assume everyone gets the same treatment they get, I'd love to see them struggle with 20 mystery fees & unlimited* service.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 27 Sep 2017 @ 12:28pm

    How come I still have 0 options then? I'm still stuck on a grandfathered plan from several years ago because every current plan is worse by comparison.

    reply to this | link to this | view in chronology ]

  • icon
    TechDescartes (profile), 27 Sep 2017 @ 12:28pm

    Easy as Pai

    Having fixed competition America's wireless industry with the stroke of a pen, Ajit Pal soon will be transferred to the Department of Defense, where he will topple the North Korean military with a press release. From there, Pai anticipates writing an op-ed that will bring peace to the Middle East by the end of the day. Finally, Pai plans to improve instantly the world economy through the deft use of a Hallmark card.

    reply to this | link to this | view in chronology ]

  • icon
    TechDescartes (profile), 27 Sep 2017 @ 12:32pm

    Ajit Pai Always Keeps His Promises

    Competition in the wireless industry has been fixed.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 27 Sep 2017 @ 12:45pm

      Re: Ajit Pai Always Keeps His Promises

      "Fixed", here, takes on at least 2 meanings. None of them close to "putting things right".

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 27 Sep 2017 @ 12:39pm

    Fixed wireless competition for the first time in 9 years in only 9 months?

    Ajit Pai: Legendary regulator.

    /sarcasm

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 27 Sep 2017 @ 12:56pm

    Redefine Success

    If at first you don't succeed...

    Seriously though, are we just going to ignore the state actor status of these monopolies and pretends that everything is fine, time to fix the internet of congress.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 27 Sep 2017 @ 1:18pm

      Re: Redefine Success

      "Seriously though, are we just going to ignore the state actor status of these monopolies and pretends that everything is fine,"

      Yes!

      Regulation for the win!!!
      Politicians can't be corrupted, they are saving us from monopolies!

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 27 Sep 2017 @ 3:12pm

    I think this merger will happen just for the purpose of cutting down government paperwork. Who wants to sit in a cavern in an underground tavern.. while watching WWIII on CCTV and be bothered by a bunch of meaningless paperwork?

    reply to this | link to this | view in chronology ]

  • identicon
    SirWired, 27 Sep 2017 @ 3:15pm

    Yes, the FCC's opinion is relevant

    "But on what planet does a partisan, arbitrary declaration of industry health make it OK to dramatically reduce sector competition further?"

    Since the FCC is the primary regulator for the wireless industry, it's opinion is considered very important when the FTC and DoJ is evaluating a merger proposal. In fact, we'd be pretty surprised if they ignored the FCC's input entirely.

    Just because the FCC is talking out of it's a$$ here does not mean that the other agencies involved can just decide to ignore the opinion of the ostensible experts on the industry. Similarly, we might expect the DOT to defer to the EPA for questions on vehicle emissions, and DHS to ask the DoJ legal questions.

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 27 Sep 2017 @ 7:22pm

    In related news...

    I've seen multiple people eating in the past few days so starvation has clearly been solved, those same people were healthy so all illness has been eliminated, and a majority of the adults among that group had jobs, and all had houses, meaning joblessness and homelessness has also been addressed.

    It truly is amazing how many problems simply disappear once you set the bar low enough and redefine a few words.

    reply to this | link to this | view in chronology ]

  • identicon
    rasz_pl, 27 Sep 2017 @ 10:32pm

    Congratulation US, you made it.


    In other news in UE due to actual competition its common for prepaid cards to offer 30 minutes of FREE talk time + 300-500MB FREE data per month. Checking paid offers first random provider offers $7 per month unlimited talk and 3GB, additional 10GB is ~$3. Another one ~$6 unlimited data LTE plan, etc etc.

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 28 Sep 2017 @ 4:33am

    In other news Pai declares wars have ended and there's peace in the world. Everybody rejoices and enjoys world peace!

    reply to this | link to this | view in chronology ]

    • identicon
      Baron von Robber, 28 Sep 2017 @ 6:47am

      Re:

      Naw that's Jared's job. Here's Trump's list of things for Jared to do.
      "Middle East peace, who knew they didn't like each other!?
      Government reform, where we shake things up, starting with the White House, till it falls apart.
      Opioid crisis management, getting more drugs for us at this dump of a White House. Rush Limbah, Opioid Czar.
      Criminal justice reform. Where judges must take a loyalty oath to me.
      Liaison to Mexico. He speaks fluent spanish, the best.
      Liaison to China. He speaks fluent panda.
      Liaison to the Muslim community. He speaks Muslim like you wouldn't believe.
      Reforming the Veteran's Administration, I love veterans, except those I don't."

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Sep 2017 @ 7:40am

    Just a thought, isn't the Reuters article actually fairly accurate? The FCC claiming that the market is sufficiently competitive means that they've pretty much guaranteed their blessing on the Sprint+T-Mobile merger.

    reply to this | link to this | view in chronology ]


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