Last Tuesday, Federal Communications Commission acting chairman Mignon Clyburn delivered remarks at the Competitive Carriers Association annual convention in Las Vegas, Nevada. Ms. Clyburn laid out some social policy goals for mobile communications for the commission post the 700 MHz interoperability solution committed to by AT&T over a week ago. Among the goals are:
1. Promoting competition
2. Empowering consumers
3. Unleashing spectrum
4. Spurring investment
Ms. Clyburn took the mantle from her predecessor, Julius Genachowski, crediting the FCC with market powers the FCC simply does not have and shouldn’t admit to having even if it did. I made reference to this in a tweet a couple nights ago: the Genachowski Syndrome. Let’s take, for example, the FCC’s promotion of competition in mobile services.
The type of competition the FCC refers to is the layman’s version of competition where each firm in the market is concerned about what the other one is doing. Sure in the real world T-Mobile is aware that Verizon and AT&T are the big dogs in the wireless market, but T-Mobile’s primary concern, as it is with any firm in a competitive market, is with the desires and demands of the consumer. If this were not the case then T-Mobile would not have successfully carved out a niche in the pre-paid wireless market. It would have paralyzed itself wondering what Verizon or AT&T’s next moves were, finding itself counting Euros instead of dollars. The FCC had nothing to do with T-Mobile carving out this niche. This had more to do with T-Mobile reading the demographics of the nation and where the economy was going.
In a competitive market, the market the FCC allegedly wants to promote, there would be free mobility of the resources wireless carriers need in order to produce their services. For mobile carriers that includes spectrum, access to towers, and public rights-of-way. Guess who provides bottlenecks that restrict access to these resources. To steal a phrase, it’s not that complicated. Local governments seek to extract tribute from carriers via franchise fees, rights-of-way permits, and zoning delays for towers. Meanwhile, the FCC and the U.S. Department of Justice scare investors with proposals to cap access to spectrum auctions.
And can we really say that the FCC’s 2011 rules mandating data roaming helped promote a competitive market? Roamers aren’t looking for new services or new service providers when trying to make a call outside of their carrier’s network. The expect their carrier to connect their calls no matter where they are. The FCC’s roaming rules only made it okay for a consumer to stay with a regional carrier when instead the consumer should have been exposed to the consequences of being with a lower tier carrier.
The lower tier carrier shouldn’t take all the blame. Some of the blame falls on larger carriers for not marketing a brand of service customers of smaller tier services would want to switch to. In addition, if competition drives innovation and infrastructure development as Ms. Clyburn alludes to, then why promote roaming, a policy that disincentivizes carriers from building national networks?
Bottom line, mandating roaming is not a public policy that promotes competition and the FCC should stop confusing being around during innovation with actually influencing competition.