Markey, Boucher, Waxman Release GAO Report on Competition in the Wireless Industry

Press Release

Rep. Edward J. Markey, Rep. Rick Boucher, and Rep. Henry A. Waxman released a report by the Government Accountability Office (GAO), which examines changes in the wireless industry over the past decade, consumer and stakeholder perspectives of regulatory policies and industry practices, and Federal Communications Commission (FCC) strategies to monitor industry competition. GAO recommends that the FCC expand its data collection on such metrics as special access rates, prices, and capital expenditures in order to improve its monitoring and annual reporting on competition in the wireless market.

"Today's report offers important insights into the wireless industry and the FCC's efforts to assess industry competition and consumer protection," said Rep. Markey. "The GAO has noted that the FCC has made progress to improve its data collection and assessment activities with more work to be done. Over the past decade, consumers have benefited from significantly lower prices for wireless services and better coverage. Still, issues such as early termination fees charged by carriers -- which raise concerns both from a consumer protection and a competition standpoint -- handset exclusivity arrangements, acquisition of spectrum and industry consolidation all should be closely examined."

"The GAO's report holds good news for consumers -- they generally benefit from lower prices for wireless phone service and better coverage," said Rep. Boucher, Chairman of the Subcommittee on Communications, Technology, and the Internet. "But the report also indicates that the Commission should improve its data collection with respect to the effects that some industry practices may have on consumers. I urge the Commission to consider the GAO's analysis and to continue to work with stakeholders to ensure that all Americans continue to benefit from widely available and reasonably priced wireless communications services."

"Today's report underscores the need for the FCC to expand its collection and review of data to monitor wireless competition and its impact on consumers," said Rep. Waxman, Chairman of the Committee on Energy and Commerce. "It is time for the FCC to complete its evaluation of special access pricing. Pro-competitive policies in the special access market are essential to maximize choice, affordability, and technological innovation in the wireless market. "

The GAO report, "Enhanced Data Collection Could Help FCC Better Monitor Competition in the Wireless Industry," reviews the changes in the wireless industry since 2000, noting an increase in consumer usage of wireless services and the consolidation among wireless carriers during this period. These changes have benefited consumers through lower prices and better coverage. However, industry consolidation has also reduced the ability of small and regional carriers to be competitive, raising concerns that a lack of competition in the market could result in higher fees and deteriorating service for consumers.

GAO recommends that the FCC more closely monitor industry practices that may jeopardize wireless competition as part of its statutory reporting and monitoring of wireless competition. It also recommends that the FCC collect original data on pricing, capital expenditures by wireless carriers, and other metrics, and continue to examine the impact of early termination fees and exclusive handset arrangements.

GAO conducted the report in response to a request by Rep. Markey when he was chair of the Subcommittee on Telecommunications and the Internet.

Read the full report here: http://energycommerce.house.gov/documents/20100826/GAO-10-779.Report.July.2010.pdf

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