Government Report Measures U.S. Wireless Market

Just how fair is the competition in the wireless market? If you are a smaller player, you may find it to be extremely skewed.

According to a recent government report – featured in an  article – the consolidation in this space over the last 20 years has allowed dominance in 90 percent of the market. The study was completed by the Government Accountability Office, an investigative arm of Congress.

There are some who believe the results could help strengthen the Federal Communications Commission’s argument for enhanced oversight of the wireless industry.One of the rules the FCC  is currently considering includes requiring wireless phone companies to alert consumers before they actually reach roaming or data usage limits on a wireless plan. The agency has also been examining common industry practices that may or may not be unfair to consumers.

One thing under closer examination is termination fees that occur when contracts are terminated before expiration. Although the smaller provider may find the industry more challenging, consumers are enjoying the benefits of better wireless coverage and prices that are proving to be roughly half of what they were in 1999.

The GOA report found that at the end of 2009, there were 285 million cell phone subscribers in the United States. In 1989, there were 3.5 million users. In addition, nearly 40 percent of U.S. households rely on a cell phone as their primary phone. As for why the market tends to favor larger providers, there are a number of factors referred to in the report, including early termination fees and handset exclusivity.

It doesn’t help that AT&T is the only provider that can offer the iPhone.

Although this could be challenged in the future as Android is rapidly gaining ground. Special access regulations also garnered some complaints as this element grants access to the vital back-haul lines that connect wireless towers to broader telecommunications networks.

Smaller carriers claim they pay excessive prices for such access due to the fact that most of this infrastructure is owned by companies such as  and Verizon Communications. As to what the FCC might do with the results of this report, time will tell. As to strengthening oversight of the wireless industry, this has proven to be a slow and rocky road. Will it improve in the future? Given the size of this market and the players involved, don’t look for drastic changes anytime soon.

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