Initial comments in this proceeding and investigations conducted by the House and Senate demonstrate numerous problems with the wireless market. Prices are rising, consumer choice is artificially limited, and valuable innovations are being delayed or kept from the market altogether; and smaller competitors cannot get the spectrum, the backhaul, the roaming, or the handsets they need. Meanwhile, the major carriers arguments in this proceeding emphasize the existence of growth and innovation in the wireless market, which they contend indicates effective competition. These arguments are incorrect. A closer examination of the data in the Commissions Thirteenth Report and other sources indicates that insufficient competition has led to reductions and delays in investment, innovation, and growth. For example, the Thirteenth Report indicated a reduction in capital expenditures by 20% from 2005 to 2007, although revenue increased 20% during the same time period. Little surprise, then, that the two largest carriers that together hold over 60% of the national market reported profits of 40% or more in the first quarter of 2009.

Even as revenues and profits rise, investment continues to decline, growth continues to disappoint, and wireless carriers persist in constructing artificial and anti-consumer obstacles to innovation all telltale signs of insufficient competition.

The Commission should not be fooled by the superficial analytical metrics proffered by industry, metrics that paint the false picture of a flourishing market. The major wireless operators, enjoying immense profits thanks to market power, seek to have the Commission maintain an empty analysis, to ensure that they continue to enjoy the favorable regulatory environment that has allowed them to amass spectrum and market share without consequences.

As with our initial comments, we ask the Commission to follow the examples of the House, the Senate, and the Department of Justice to look more deeply into the wireless market structure and to examine all of the evidence and all of the barriers impeding growth and competition in the wireless market. In a world in which only AT&T and Verizon believe there is adequate competition because the lack of meaningful competition is adequate for them the Commissions public interest duties demand a closer examination.

To read the full comments, download the PDF below.