CTIA And Public Knowledge Respond To GAO’s Report On The Wireless Industry

Yesterday, we covered an in-depth report issued by the Government Accountability Office (GAO) regarding consumer choice in the wireless industry.  It wasn’t long before other industry groups responded to the report, including the CTIA and Public Knowledge, a D.C.-based public interest group working to “defend citizens’ rights in the emerging digital culture.”

First off, here’s what the CTIA had to say: “In finding that wireless consumers are seeing ‘lower prices and better coverage,’ today’s GAO report confirms what we’ve been saying for a long time – that the U.S. wireless industry is extremely competitive and continues to respond to increasing consumer demand by delivering real benefits for American consumers,” said CTIA President and CEO Steve Largent.  “It is significant that the GAO reports that the cost of wireless service in 2009, adjusted for inflation, is about 50 percent less than in 1999.  According to the GAO, that ‘illustrates consumers are getting more wireless service for lower costs than ten years ago.’  We agree with the GAO’s assessment that the price of voice, text and data are indicators of competition in today’s U.S. wireless industry.”

“The report also notes that rising penetration rates and a substantial increase in the number of wireless-only households means that ‘carriers are now mainly competing for existing subscribers.’  With more than 91 percent of Americans being able to choose from four or more carriers, competition for subscribers is fierce.  Consumers have a number of choices in calling plans offered by a variety of carriers, ranging from prepaid to postpaid.  If a consumer doesn’t like something about one provider, he or she has many others from which to choose. In fact, about 66 million Americans, or nearly 25 percent of all wireless consumers, took advantage of these competitive choices and changed carriers last year so they could get the newest innovative products and services and competitive rate plans.

“Wireless products and services are the future.  But as the GAO noted, spectrum is ‘an essential input for wireless services.’ In order for the industry to continue to grow, innovate and deliver the cutting-edge technology consumers demand, all carriers must have access to additional spectrum.  For this reason, it is imperative that Congress, the Administration and the Federal Communications Commission follow through on the National Broadband Plan’s recommendation to allocate an additional 500 megahertz of spectrum for commercial use within the next 10 years.”

Here’s what Gigi B. Sohn, president and co-founder of Public Knowledge had to say: “Today’s GAO report adds more evidence to the argument that any rules governing an open Internet should apply to the wireless sector as well as to the wired.  The report paints a disturbing picture of an industry in which the top four carriers control 90 percent of the market, and industry consolidation is strangling smaller, regional carriers.

“The report shows the large companies continue to pile up advantages in gaining more spectrum, in exclusive deals for handsets and in locking in consumers with high termination fees.  At the same time, there is the equally disturbing trend that the investments larger carriers are making in their networks are a smaller proportion of their service revenue than the expenses of smaller carriers.  High special access rates imposed by the wireline affiliates of the larger carriers also hamper competition.

“These trends do not bode well for consumers, despite any benefits of the moment.  The report shows the Federal Communications Commission (FCC) should act soon on a wide range of pending pro-consumer items, ranging from handset exclusivity to text messaging, in addition to making certain any policy on an open Internet includes  wireless access as well.”