Last year’s FCC wireless competition report raised a furor when, for the first time, it did not conclude that the U.S. wireless industry was “effectively competitive” — and this year’s report, issued yesterday, is equally inconclusive.
”It would be overly simplistic to apply a binary conclusion or blanket label to this complex and multi-dimensional industry,” the FCC wrote in the report.
One of the metrics the FCC focused on last year was the Herfindahl-Hirschman Index, an arcane measurement of industry consolidation. In last year’s report, which was actually based on 2008 data, the Herfindahl-Hirschman measurement for the U.S. wireless industry was 2842, which was deemed “highly concentrated”—as opposed to “moderately concentrated” or “unconcentrated.” The Herfindahl-Hirschman measurement in this year’s report is slightly improved, measuring 2811. But it’s important to recognize that the numbers upon which this year’s measurements were based is from 2009. Considering the wireless industry consolidation that has occurred since then, the measurement likely would be higher for 2010 or 2011.
As of year-end 2009, four service providers had over 90% of the U.S. wireless market share, with AT&T and Verizon’s combined market share measuring 62%, the report notes.
The report also includes some stark reminders of the difference in wireless service availability and competition between rural and urban areas. It found, for example, that 500,000 rural Americans had no wireless service available to them as of July 2010 and 3.8 million rural Americans had no mobile broadband availability.
While 82% of the U.S. population has three or more mobile broadband providers, only 38% of rural Americans can make the same claim.
Despite its inconclusive nature and its reliance on somewhat old data, some readers may find the new competition report to be a useful reference tool. Among its 300 pages, you can find anything from the number of cellsites nationwide (about 247,000, according to the CTIA) to the number of handsets offered by manufacturer.