AT&T, Verizon dominate wireless… Is it time to regulate?

Posted on May 24th, 2010 by bile
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Well… of course not but some seem to think so.

The government’s latest annual report on the state of mobile wireless competition is out, and its conclusions are not what the wireless sector wanted to hear. Over the last half-decade, concentration in the industry has gone up—way up, in fact. The Federal Communications Commission says that the two dominant providers, AT&T and Verizon, now enjoy a 60 percent chunk of revenue and subscribers, “and continue to gain share.”

Their nearest rivals, T-Mobile and Sprint, serve most of that remaining 40 percent. T-Mobile enjoyed some growth over the last two years. Sprint lost subscribers.

As a consequence, the antitrust measurement gauge that the FCC uses, the Herfindahl-Hirschman Index, has jumped by almost 700 points since the agency first began using it in 2003. That’s a 32 percent increase. Some of this newer concentration is a consequence of mergers over the last few years: AT&T/Aloha, T-Mobile/Suncom, Verizon Wireless/Rural Cellular, and Verizon Wireless/Alltel.

So the wireless sector HHI is now at 2848, the agency says, which doesn’t mean diddly until you know that the Department of Justice regards a market to be “highly concentrated” if, following a merger, the HHI in a given industry throttles past 1800. The FCC typically starts to eyeball the situation after a post-merger calculation of 2880.


The cell phone industry is quite heavily regulated as are most ‘utilities.’ There are some issues that can’t really be dealt with such as the momentum of the old AT&T monopoly (which was created by the federal government). Those entities which came from it continue to hold huge amounts of capital and I don’t see any reasonable way to deal with that. It could be argued that they should be broken up I believe simply removing the existing intervention would cut them down to size should they be unable to compete with new comers.

How can we get some improved competition and therefore truly fulfill the customers desires?

  • Scrap the FCC. They increase the barrier to entry to entering the field within the current technological structure, stifle technological advancement and time to market by requiring devices to undergo special testing and limiting the frequencies that can be used. The limiting of frequencies reduces the supply and therefore increases costs. It limits the reasons to research in new technologies with different frequencies since they can’t be used without great lobbying. They in effect create a cartel which normalizes service not only from a technological perspective but also their general service.
  • Stop any intellectual property abuse. Don’t allow the government to proactively go after individuals on behalf of the hardware and software providers. Only enforce those terms that are clearly agreed to in the contract. This is not any different from game consoles. The owners of the console have the right to modify the hardware and it’s software as they see fit just as the service provider has the right to attempt to discover such changes and stop servicing that individual.
  • Remove any service requirements, taxes, etc. that rise the barrier to entry and normalize service. If the customer is fine without the ability to make emergency calls, for example, that’s between them and the provider.

I’m sure there are other issues that could be addressed but as far as I can see the first one, the FCC, is the biggest. Removing restrictions on all forms of wireless technologies would go a long way in opening up the floor to new technologies and entrepreneur wishing to exploit those technologies to provide a better service for the customer.

FCC to probe exclusive handset deals, enhance diversity in the radio business

Posted on June 22nd, 2009 by bile
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Likely Federal Communications Commission chair Julius Genachowski has promised Senator John Kerry (D-MA) that he’ll give due attention to a petition asking the FCC to investigate exclusivity arrangements between handset manufacturers and wireless carriers. The most famous of these is AT&T’s deal with Apple for the iPhone. The White House’s pick to run the Commission also pledged to take action if the agency concludes that these arrangements hurt consumers.

The long standing request for action on this issue came from the Rural Cellular Association (RCA), which charges that they shortchange rural areas. “Yes, if confirmed, I will ensure that the full record on the RCA petition is reviewed, and act accordingly to promote competition and consumer choice,” Genachowski declared in a set of formal responses to questions posed by Kerry.

Genachowski also responded to four other questions posed by Kerry, albeit with circumspect answers that probably stem from a desire not to commit to too much, too soon. To a query about addressing the “shocking lack of minority voices in media markets today,” he promised to develop (take a deep breath here) “constitutionally permissible strategies to ensure that there is a wide dissemination of licenses so that women-owned, minority-owned, and small businesses have ample opportunity to compete, innovate, and contribute their voices to the national and local media marketplace.”

The nominee did agree with Kerry that the agency should, as part of its National Broadband Plan, conduct a comprehensive inventory of all available spectrum and the ways that it is currently being used. Kerry has introduced a bill that would make a survey of spectrum use between 200MHz and 3.5GHz a requirement of the Communications Act. And, while Genachowski didn’t sign on to Kerry’s proposal to extend the Universal Service Fund’s “Lifeline” program to broadband, he called it “an idea that I am very interested in learning more about.” At present the fund only subsidizes telephone service.

Kerry’s Lifeline question acknowledged that there is “considerable disagreement” about how the White House’s $7.2 billion in broadband stimulus money should be spent, specifically whether it should allocated to broadband rollout in rural areas, or to “demand side” programs (such as Lifeline) that encourage more consumers to buy high speed Internet.

“My concern is that we are funding projects that are sustainable beyond the 2 year window of funding availability—” Kerry told Genachowski, “the worst thing we could do is pour this money into projects that 2 years from now will not be viable.”

Putting the unanswered questions aside, no one should be surprised that RCA is quite happy about Genachowski and Copps’ comments regarding exclusive handsets.

“It is RCA’s expectation that the FCC will find that there are significant consumer and competitive harms caused by such deals,” Todd Lantor, the group’s attorney told us. “It is RCA’s hope that the Commission will move promptly on this item and ultimately decide that banning exclusive handset agreements is what the public interest dictates.”

Iterfering with contract, monopolizing the radio spectrum, treating people differently due to their class, being successfully lobbyed by small companies looking to interfere with volunary actions of other companies, advocating wealth redistribution. Can they stop pussyfooting around and just roll out the socio fascist red carpet? This bloodletting of anything resembling freedom is painful.

Obama Administration defends warrantless wiretapping

Posted on April 7th, 2009 by bile
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“The San Francisco Chronicle reports that the Obama administration has stepped in to defend AT&T in the case over their participation in the warrantless wiretapping program started by Bush. The Obama administration argues that that continuation of the case will lead to the disclosure of important ‘state secrets.’ The Electronic Frontier Foundation has described the action as an ‘embrace’ of the Bush policy.” Update: 04/07 15:18 GMT by T : Glenn Greenwald of Salon has up an analysis of this move, including excerpts from the actual brief filed. Excerpt: “This brief and this case are exclusively the Obama DOJ’s, and the ample time that elapsed — almost three full months — makes clear that it was fully considered by Obama officials.”

I’m really getting tired of all this ‘change.’

Senators Rabble-Rousing for Mobile Bill of Rights

Posted on October 19th, 2007 by bile
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It looks like Verizon and AT&T’s recent “Hey, we’re not total assholes” moves might’ve been to preempt such “fairness” from getting some legal teeth, as a bunch of rowdy Senators are looking to make the mobile industry play just a bit nicer with a mobile bill of rights for consumers.

The Cell Phone Consumer Empowerment Act intro’d last month, for example, would force carriers to prorate termination fees, prevent them from calling their own fees government taxes, and keep their coverage maps up-to-date and easily available to customers. Also at issue are termination fees for military personnel shipped overseas and automatic extensions forced on customers seeking small changes in their contract.

It’s not the business of the government to babysit people who are too lazy or stupid to read or understand a phone service contract. No one is coerced… they simply don’t read the contract. The cell phone industry has done pretty well on it’s own… it needs no interference. If people don’t want to worry about termination fees and more up-to-date coverage maps they can demand it and take their business elsewhere if it’s not supplied.