I’ve previously written about the FCC’s intent to use (or misuse) its mobile wireless competition report to impose additional regulation on the mobile wireless industry. I’ve noted that the FCC’s 14th mobile wireless competition report lacked the necessary technical data to support its hypothesis that access to low frequency spectrum provides a competitive advantage. And I’ve written about the FCC’s refusal to define “effective competition” in accordance with the guidance Congress has already provided in the cable television context. I haven’t addressed in detail the deficiencies in the FCC’s economic analysis in the 14th report. But, in a blog post published by the Harvard Business Review, professors Gerald R. Faulhaber and Hal J. Singer have.
They note that the FCC’s analysis eschews direct evidence of the state of competition based on consumer behavior in favor of reliance on indirect evidence. The FCC ignored the direct evidence it collected in favor of market share measures, even though the FCC itself admitted that measures of market share are not synonymous with market power. Messrs. Faulhaber and Singer generally reached the same conclusion I did in my previous posts: the FCC intends to rely its mobile wireless competition reports to further regulate the wireless industry.
They take particular issue with the FCC’s implied intent to limit the ability of larger mobile wireless service providers to acquire spectrum via auction. They then note that, in this circumstance, the only viable solution for larger service providers is to acquire additional spectrum in the secondary markets. If the FCC wants to have a competitive mobile wireless industry, it can’t have its cake and eat it too. The FCC needs to release more spectrum immediately and allow larger mobile service providers to access it, or the FCC needs to speed its review of secondary markets transactions. If the FCC instead does neither, the mobile wireless industry and consumers both will suffer.