05.09.2017Policy

Back to reality: the wireless market is hyper-competitive

By: Leora Hochstein, Verizon Federal Regulatory Affairs

I’m hopeful that the new leadership at the Federal Communications Commission (FCC) will get back to reality and acknowledge what we all know to be true – that the U.S. wireless market is hyper-competitive.

For the past seven years, the prior administration failed to reach this conclusion.  That’s astounding. With falling prices, exploding demand, significant investment, boundless consumer choice and innovation, all signs point to a competitive market, and yet the FCC could not find competition. 

It’s as though we have been living in an episode of “Stranger Things.” We’re in the upside down world and can’t seem to find our way back to reality. In the upside down world of recent years, facts and data about the wireless market have stumped FCC leaders who could not decide whether there was competition.

There is no confusion in today’s marketplace. Consumers routinely receive advertisements for wireless broadband service from competing carriers that seek to attract and retain customers. And working for Verizon, I know firsthand the lengths we go to keep our customers happy and win new ones. Hello – unlimited data!

Let’s look at the numbers:

  • Consumer choice. Nearly 96% of consumers can choose from 3 or more facilities-based mobile broadband providers, and roughly 90% of consumers have access to 4 or more such providers.
  • Falling prices. The wireless Consumer Price Index (CPI) fell 11.4% between March 2016 and March 2017, even as the U.S. CPI for all items rose 2.4%.
  • Robust investment. U.S. providers invested more than $32 billion in their networks in 2015 and cumulatively invested over $300 billion over the last ten years. It is expected that 25% of North American mobile connections will be 5G by 2022.
  • Exploding demand. U.S. mobile data traffic grew 44% from 2015 to 2016 and is expected to grow five-fold by 2021.

This competition is pushing carriers to innovate. The race is on to 5G, the next generation of wireless technology. 5G will power the Internet of Things and support a diverse set of new applications and uses that will enrich the lives of American consumers and enhance U.S. productivity. Verizon is leading that charge.

Unfortunately, the last FCC turned a blind eye to the vibrancy and dynamism of the wireless market. That led to poor policy choices, such as the spectrum set-aside for T-Mobile in the incentive auction, an auction in which Verizon didn’t bid and AT&T barely bid.

Yesterday, Verizon filed comments describing the competitive mobile market.

Putting aside my personal anticipation for a second season of “Stranger Things,” I am confident that this FCC will see the world right side up, return to an objective analysis of the facts, and conclude that U.S. wireless market is effectively competitive.