The FCC Investigates Wireless - The UpStream

The FCC Investigates Wireless

posted Saturday Aug 29, 2009 by Scott Ertz

The FCC Investigates Wireless

The FCC believes that there might be a problem in the wireless industry. There are 4 wireless companies (Verizon Wireless, AT&T Mobility, Sprint Nextel and T-Mobile) that own over 90% of the market. Handset manufacturers setup exclusive deals with those carriers (such as the Palm Pre with Sprint or the iPhone with AT&T). The FCC feels that these setups might be inhibiting both innovation and consumer choice.

There are two sides to every story. The Media Access Project believes,

This investigation is long overdue... The country's four major wireless providers have enjoyed the fruits of market power for too many years, at the expense of the public's ability to gain widespread access to low-cost mobile broadband services.

On the other hand, the wireless trade group, CTIA, believes,

{The U.S.} has the least concentrated wireless market on the planet... The wireless ecosystem -- from carriers to handset manufacturers, to network providers, to operating system providers, to application developers -- is evolving before our eyes, and this is not the same market that it was even three years ago.

Knowing the innerworkings of the wireless industry personally, having been involved with all 4 of the major carriers at one point or another, I know that nothing will come of this investigation. The carriers are all very careful to not overstep their legal bounds, because they all remember the breakup of the Bell Corporation many years ago (AT&T is what is left of those days). The FCC won't do anything about contracts, because without them phone prices skyrocket (your free phone would cost you around $200), and even with early termination fees, it is still cheaper to sign the contract.

I look forward to the commission's report, but expect I know the results. What do you guys think? Will this be the end of the current wireless setup, or will the FCC rule fair-play?

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