With cell-phone use skyrocketing in the United States, consumers enjoy prices that are 50 percent lower than a decade ago, but smaller carriers face severe obstacles to gaining a foothold in the market, says a government report made public on Thursday.
The General Accounting Office study of the wireless industry for the House and Senate commerce committees looked at changes in the wireless industry since 2000, the perception of stakeholders about regulatory policies and industry practices, and how the Federal Communications Commission can better carry out its mandate to foster a more competitive market.
Forty Percent Have Cell Phones
There were 285 million cell subscribers in the U.S. in 2009, up from only 3.5 million in 2000. Forty percent of Americans now use wireless phones as their primary home telephone.
Meanwhile, four top wireless carriers control 90 percent of the industry due to consolidation, news that should boost those in Congress who argue that the FCC should crack down on that dominance to avoid higher prices and worse service.
The report’s authors analyzed data from a commercial database as well as from the Bureau of Labor Statistics, UBS Investment Research’s March 2010 Wireless 411 report, and the year-end 2009 CTIA semiannual survey of wireless carriers. To assess the impact of industry changes on consumers and competition, they interviewed FCC Wireless Telecommunications, Wireline Competition, and Enforcement Bureau officials, device manufacturers, tower companies, industry associations, consumer groups, and academic and industry experts. Interviews were also conducted with smaller carriers.
The conclusion is that smaller carriers face obstacles gaining subscribers, investing in their networks, and offering the latest handsets to compete with the industry leaders.
The Big Four
“Members of Congress and public-interest groups have raised concerns about the competitiveness of the wireless industry in recent years,” the report says. “Consolidation through mergers and acquisitions has created a market…