The prices subscribers pay for wireless services fell in half over the past decade but smaller carriers are struggling to compete against top-tier operators, the Government Accountability Office (GAO) reported yesterday.
The GAO said the prices consumers pay for wireless services are about 50 percent less now than they were in 1999, despite industry consolidation that has made it difficult for small and regional carriers to be competitive.
“Over the past decade, consumers have benefited from significantly lower prices for wireless services and better coverage,” said Rep. Ed Markey (D-Mass.), Rep. Rick Boucher (D-Va.) and Rep. Henry Waxman (D-Calif.), the lawmakers who released the report, in a statement. “Still, issues such as early termination fees charged by carriers – which raise concerns both from a consumer protection and a competition standpoint – handset exclusivity arrangements, acquisition of spectrum and industry consolidation all should be closely examined.”
The office recommended the FCC examine whether it needed to expand its review of the wireless industry in its annual wireless competition report. The Rural Cellular Association, many regional carriers and some consumer groups believe the FCC’s policies, particularly around spectrum, have jeopardized the competitiveness of the wireless industry.
The GAO also said more information was needed on fees for special access to wireless infrastructure, an issue hotly contested by small carriers, and that further data was needed on the competitive impact of early termination fees and handset exclusivity deals.
CTIA said the report indicated the U.S. wireless industry was “extremely competitive,” citing the fact that wireless subscribers now pay lower prices for better coverage.
Free Press, a nonprofit group dedicated to media reform, disagreed with CTIA’s assessment, saying the report indicated that the FCC’s policies had “fostered an environment where companies cannot compete on a level playing field.”
The report examined changes in the wireless industry since 2000, stakeholders’ perceptions of regulatory policies and industry practices and the strategies the FCC uses to monitor competition. The GAO used data from government and private sources; conducted case studies in rural and urban areas in four states; and interviewed stakeholders representing consumers, local and state agencies and officials, and various segments of the industry.