The U.S. mobile broadband market is competitve, says FCC

by Steve Blum • , , , ,

The Federal Communications Commission has made a case for declaring that the mobile broadband market in the U.S. is broadly competitive, in a qualitative, preponderance of the evidence sort of way. Looking at a number of different metrics, including usage (see chart above), pricing, advertising, investment coverage, the FCC decided that when it was all added up, the result was “there is effective competition in the marketplace for mobile wireless services”.

One key indicator – half statistical, half anecdote – was the way the four major nationwide carriers responded to each other when unlimited data plans were reintroduced…

One significant trend that has developed recently is the return of “unlimited” data plans. In January 2016, AT&T introduced the AT&T Unlimited Plan for DIRECTV (or U-Verse). While that plan was made available only to DIRECTV subscribers, it signaled a shift towards service providers again offering unlimited data plans. In August 2016, T-Mobile launched the T-Mobile ONE Plan offering unlimited voice, text and high-speed 4G LTE smartphone data. The next day, Sprint introduced its Unlimited Freedom plan, which offered two lines of unlimited talk, text and data for $100 a month. In February 2017, Verizon launched its Unlimited Data Plan offering unlimited data on smartphones and tablets for $80 a month. AT&T then introduced the Unlimited Choice plan, which offered unlimited data for $60 per month for a single line ($155 for four lines). In late February 2017, U.S. Cellular introduced its own unlimited data offering.

Three caveats should be kept in mind, though. For the past eight years, the FCC used a wide definition of the mobile marketplace, including sectors such as consumer devices and industry infrastructure. This latest finding focuses much more narrowly on consumer services.

Then there’s the question of rural versus urban. Although 98% of people living in suburban and urban areas have access to at least four mobile service providers, only 71% of those in rural areas do. A competitive mobile marketplace might exist for the U.S. as a whole, but it’s not evenly distributed.

Finally, there’s the question of defining what “effective competition” means. In this report, which was approved by commissioners on a party line vote, the question is largely sidestepped, relying instead, as commissioner Jessica Rosenworcel wrote in her dissent, on an “I know it when I see it” standard.