Is Mobile Service Competitive? With a Possible Big Merger, FCC Commissioners Disagree

Ajit Pai Free Speech

WASHINGTON — The FCC has concluded that there is a competitive market for mobile wireless service, a finding that could have implications on how the Republican-controlled agency makes future decisions.

The finding was made in an annual report to Congress on the wireless marketplace, and the FCC staff made its conclusions by citing falling prices, network investment and improved quality. The study looked at the marketplace in 2016 and early 2017.

But FCC Commissioner Jessica Rosenworcel, a Democrat, challenged the findings and cited the reports that T-Mobile and Sprint are talking about a merger. That could reduce the number of major mobile providers from four to three.

“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,'” she said at Tuesday’s meeting. “For my part, any transaction before us will require someone to explain how consumers will benefit, how prices will not rise and how innovation will not dissipate in the face of so much more industry concentration.”

She was joined in her criticism of the report by Commissioner Mignon Clyburn, who cited the dearth of service in some rural areas.

“Not a week passes in Washington, and various parts of our nation, where the buzz about the promise of 5G is not heard,” Clyburn said. “The reality, however, is that far too many in this country do not have reliable and affordable 3G service.”

She said that the report took a “myopic view” of the mobile wireless ecosystem.

FCC Chairman Ajit Pai, however, defended the conclusion. When asked what impact that rumors of potential future mergers had on the conclusion, he said, “The key word is ‘rumored.’ Congress has tasked us with the state of ‘effective competition,’ and that does not include rumors of mergers that may or may not happen.”

“Looking at the bigger picture, most reasonable people see a fiercely competitive marketplace,” he said.

Commissioner Michael O’Rielly said that “providers are actively improving their products to meet consumer expectations.” He said that what the report showed was that “we are entering an era of tremendous investment.”

“As the report details, wireless prices are falling.  Speeds are increasing.  Network coverage and capacity are expanding,” said FCC Commissioner Brendan Carr, at his first open commission meeting since being confirmed.

Another pending flashpoint between the commission’s Republican and Democratic appointees is over how the FCC sets the benchmark for high-speed Internet service.

Pai has put up for public comment a proposal that would count mobile service at speeds of at least 10 Mbps as a sufficient standard in determining whether consumers are getting sufficient access to broadband service. That is lower than the 25 Mbps for broadband set by the FCC under Pai’s predecessor, Tom Wheeler, a Democrat.

Rosenworcel blasted the proposal on Twitter last week. “FCC proposing to lower US #broadband standard from 25 to 10 Mbps. This is crazy. Lowering standards doesn’t solve our broadband problems.”