Federal regulators on Thursday depicted the wireless telecommunications market as more strenuous, possibly laying the groundwork for new regulations that could aid smaller cell phone carriers such as Sprint Nextel Corp. and T-Mobile USA.
In its annual report on competition in the wireless industry, the Federal Communications Commission on Thursday reversed years of findings that the market is “effectively competitive.” The report falls short of declaring the market uncompetitive, but the agency says industry concentration has increased by nearly a third since 2003.
It said the nation’s two largest providers, AT&T Inc. and Verizon Wireless, a unit of Verizon Communications Inc., have 60% of subscribers and revenue, and continue to gain share from rivals. The smallest two, Sprint and T-Mobile, lost 1.7 million subscribers combined in 2008 and added just 827,000 last year.
“The U. S. has the most intensely competitive wireless market on the planet, and it’s becoming more competitive by the day,” Verizon said in a statement disagreeing with the report. “The facts and the record establish conclusively that the wireless marketplace is ‘effectively competitive,’ as the FCC has found in the previous six wireless competition reports.”
Wireless carriers are sensitive about whether the FCC thinks national or local markets are competitive because the agency will soon free up more airwaves for wireless broadband services. If the agency doesn’t think a local market is competitive, it could restrict which wireless companies are allowed to bid at auction.