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TR Daily: FCC Takes in Varied Viewpoints on Wireless Competition 

July 30, 2018

Wireless companies and groups presented varying evaluations of the state of wireless competition that the FCC will have to sift through as it compiles a report called for by the RAY BAUM’S Act of 2018.

President Trump in March signed a fiscal year 2018 omnibus appropriations bill that included the act, which requires the FCC in the last quarter of every even-numbered year to publish a communications marketplace report (TR Daily, March 23). The FCC requested input for the portion of the report addressing the mobile wireless sector in a public notice released last month (TR Daily, June 26).

In its comments filed in WT docket 18-203, AT&T, Inc., said that since the FCC’s wireless competition report last year, the wireless marketplace has “become even more competitive by virtually every measure.”

Of particular importance, the company said, wireless carriers continue to “compete fiercely” on unlimited pricing plans and the four national carriers are investing billions of dollars to upgrade their networks to improve network quality, as well as enhance 4G LTE networks and prepare broad 5G rollouts.

“The intensity of this back-and-forth [unlimited plan pricing] competition has produced aggregate pricing data that are astonishing,” AT&T said, adding: “The result of this intense rivalry is that consumers are getting more service and more features for prices that are, by multiple measures, the lowest ever.”

In addition to better prices, consumers are also benefiting through the rollout of included new features, such as access to streaming video and music services and cloud storage, AT&T said.

Further, the company said, “[E]ven as prices for service plans plummet, consumers are using more data, resulting in dramatic reductions to the per-megabyte costs of data.”

Wireless providers spent $25.6 billion on capital improvements last year, AT&T said.

“Looking to the future, the four national carriers are poised to continue their race to upgrade their LTE networks to more advanced technologies offering greater speed and reliability,” it said.

Verizon Communications, Inc., agreed in its comments that there is “intense competition” among mobile players and that consumers are benefiting from a “robustly competitive” marketplace.

“The evidence of a robustly competitive and innovative mobile wireless marketplace remains overwhelming and is only growing stronger,” Verizon said.

Mobile usage has increased and prices have fallen, the company said.

“[T]he mobile wireless value proposition continues to grow, and consumers are capturing even greater value for each dollar spent,” Verizon said.

Carriers are increasing competing by offering “innovative” data plans and bundles with other services, and also are competing on network performance and coverage, the company said.

“Wireless providers have collectively spent hundreds of billions of dollars improving and expanding their networks to compete for customers–$226 billion over the last 8 years, and $25.6 billion in 2017 alone,” Verizon said. “In the first quarter of 2018, AT&T and Verizon together spent over $10 billion to enhance their networks. As providers continue to aggressively deploy 4G and race to deploy 5G, these numbers will only continue to rise.”

The Wireless Infrastructure Association said the level of mobile wireless competition and demand for wireless service means the infrastructure needed to support it is “growing exponentially,” particularly for coming 5G wireless networks.

“The wireless industry is stepping up to meet the challenge, investing significantly in new or modified wireless deployments to compete for customers and satisfy growing demand,” WIA said, adding: “[A]dditional barriers to infrastructure deployment must be eliminated to ensure that the necessary wireless infrastructure can be deployed to satisfy exploding customer demand for wireless services.”

The FCC should take action to minimize tower citing delays, declare that all fees charged by localities be non-discriminatory, and that state and local regulations subjecting wireless deployments to longer or more onerous siting processes than non-wireless deployments violate Sections 253 and 332,” WIA said.

CTIA told the FCC it sees that “by any metric” the wireless industry is “vibrant, innovative, and highly competitive.”

Adoption of services, usage, investment, and deployment have all increased, CTIA said.

“There is no question that consumers benefit the most from this competitive landscape,” it said. “Competition is driving innovation and pushing wireless providers to deliver greater value to a broad range of consumers in both urban and rural areas, creating flexible options and dramatically improving consumers’ lifestyles.”

CTIA suggested that in order to further increase competition, the FCC should “reduce regulatory barriers,” such as modernizing rules governing tower sitings, and making more low-, mid-, and high-band spectrum available.

The Competitive Carriers Association lamented that as the industry begins its transition to 5G, “the fact remains that much of the country still lacks access to reliable mobile wireless service including 3G and 4G. … While much work has been done, more remains to ensure that all Americans have access to ubiquitous mobile wireless service. To advance next-generation technology and services throughout the country, the Commission must focus on existing barriers to mobile wireless competition and deployment.”

The group contended that “increasing concentration” of wireless markets between Verizon and AT&T, as well as regulatory barriers, “negatively impact competitive entry and competitive expansion, particularly in rural and remote areas.”

Mobilitie LLC said there continue to be “regulatory barriers that can distort competition,” and asked the FCC to grant the company’s 2016 petition for a declaratory ruling that would “support cost-based fees necessary to process small cell applications and prohibiting excessive siting fees that frustrate competition.”

The company complained that many cities are creating a “regulatory ‘drag’” on competition through “high fees, unreasonable restrictions, and long delays.”

The Free State Foundation argued the FCC should affirm the market is “effectively competitive” for mobile competition.

“Given the strong evidence of competition, consumer choice, declining prices, and technological dynamism, the [FCC previously] found, correctly, that the commercial mobile services market is effectively competitive,” the think tank said. “Recent trends certainly support reaffirmation of that finding in the Commission’s forthcoming competition report.”

FSF also submitted evidence it says should prompt the FCC to recognize that mobile wireless services are a “substitute or potential substitute” for wireline services.

In particular, FSF said, the availability of “unlimited” and “free data” wireless service plans have increased in the past year.

“The developments with regard to postpaid plans have blurred even further the line between the postpaid and prepaid services as providers of both postpaid and prepaid plans increasingly interweave elements that formerly characterized one segment or the other into their 3 various offerings,” the Free State Foundation said.

NTCH, Inc., argued the “state of competition in this industry is bad and getting worse all the time.”

NTCH pointed to “scores” of large, medium, and small carriers that have carriers that have gone out of business in the past 20 years as a sign of a decrease in competition.

“This dramatic reduction in competitive players has necessarily changed the landscape,” NTCH said. “A consumer is far less likely today to find an innovative or personalized service offering or one targeted to the needs of a niche market. National advertising and service offerings require standardization that cannot adjust to local needs.”

In addition, it said, “incentive for reasonable roaming rates between carriers has vanished” because of the lower number of carriers.

“This single hurdle has been a major factor in the surrender of numerous carriers to the majors,” NTCH said.

At the same time, the FCC has “largely failed” in its attempt to foster ownership of wireless licenses to small companies through auctions, it said.

“The Commission now grants a maximum of a 25% discount off the auction bid amount, which, it turns out, is not nearly significant enough a discount to really help small businesses,” NTCH said.

Mobile Future argued the Commission should declare the mobile market competitive because consumers continue to “enjoy an ample choice” of wireless carriers, devices, and pricing plans.

But the FCC should also “continue to take actions to promote investment in next generation networks, eliminate barriers to deployment and avoid counterproductive regulation,” the group said.

Among other things, Mobile Future said, the FCC should “move aggressively towards finalizing rules and auctioning new spectrum” and “eliminate harmful barriers to deployment at the state and local level.”

Replies are due Aug. 16.

—Jeff Williams