Wireless Report Data Undermine the FCC’s Rationale for Regulation

Amidst the 2015 holiday season, the Federal Communications Commission released its Eighteenth Wireless Competition Report. Considering the FCC’s less than stellar track record in timely producing some of its statutorily required reports, perhaps the Commission simply hoped to release the report before year’s end. Then again, the December 23 release of Eighteenth Reportall but guaranteed reduced public attention.

What the Commission might prefer the public overlook is this: The Eighteenth Report contains evidence that undermines the Commission’s rationale for imposing public utility style regulation on mobile broadband services as it did in its recent Open Internet Order (2015). One obvious line of evidence is supplied by the large scale of competing wireless broadband provider coverage. Another line of evidence consists of market trends toward no contract wireless services and elimination of early Termination Fees (ETFs), thereby reducing consumer switching costs. A highly dubious premise of the Open Internet Order was that “broadband providers have both the incentive and the ability to act as gatekeepers standing between edge providers and consumers.” The Order claimed that broadband providers – including mobile broadband providers – can “block access altogether,” “target competitors, including competitors to their own video services,” and “extract unfair tolls.” Of course, effective market competition provides a strong check against any such incentives or the ability to engage in such anti-consumer behavior. Service providers in competitive markets risk losing subscribers to rival providers.

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