09/09/2014

FCC deserves credit for preserving competition among wireless providers

   It’s time to give the regulators who oversee the wireless industry a big cheer — and urge them to keep up the good work.

    Prices for smartphone service are coming down. The terms of wireless contracts are becoming less onerous and more transparent. Consumers unhappy with their carrier generally have three other big carriers to choose from. And the weakest of the Big Four wireless providers have been steadily improving their networks.

    You can give a good deal of credit for these positive developments to the Federal Communications Commission. Over the past three years, opposition from the FCC has helped quash two potential megamergers involving the Big Four, inspiring those companies to compete ever harder for your business.

    I’ve not always been a fan of the FCC. Too often in the past, the agency has rubber-stamped mergers that have stymiedcompetition. And the regulator’s recent proposal on net neutrality threatens the Internet as we know it and could stifle innovation.

    But let’s give credit where it’s due. When it comes to the wireless industry, the FCC’s two biggest moves in recent yearshave promoted competition and benefited customers.

    “The agency and the (Obama) administration deserve credit” for blocking these deals, said Craig Aaron, CEO of Free Press, a consumer-advocacy group. “When companies don’t merge, consumers win.”

    The FCC’s latest action came early last month. Chairman Tom Wheeler proposed barring the largest carriers from teaming up to bid in an upcoming spectrum auction. It doesn’t sound like much, but it had big implications.

    Wheeler’s proposal, which likely would have passed the FCC, came as T-Mobile and Sprint were reportedly in talks to jointly bid in the auction. That proposed combination was something of a dry run for a long-discussed merger of the two companies.

    By basically announcing his opposition to such a partnership, Wheeler not only scuttled the joint-bid plan, but also helped derail the whole merger idea. His proposal reportedly convinced the companies that the agency’s private warnings of opposition to their contemplated merger were more than just bluster. The two companies ceased their merger talks days after Wheeler’s proposal.

    That marked the second time in three years the FCC had helped throttle a potential merger involving T-Mobile. Three years ago, the FCC joined forces with the Department of Justice to stop AT&T’s proposed acquisition of its smaller rival.

    Consumers have benefited greatly from both actions.

    In the wake of the scuttled AT&T/T-Mobile deal, T-Mobile became reinvigorated. Using billions of dollars AT&T gave it as a breakup fee, T-Mobile invested heavily in upgrading its network and improving its coverage. It also has led the industry in developing and marketing more consumer-friendly cellphone plans.

    “While the wireless market isn’t perfectly competitive, at least having competition is producing measurable results for consumers,” said John Berg-mayer, a senior staff attorney for the consumer-advocacy group Public Knowledge.

    As Bergmayer says, the industry isn’t perfect. Thanks to bad decisions by the FCC in the past, there are fewer competitors than there could be.

    And there are reasons to worry about the broader telecommunications sector. The FCC is weighing a pair of big merger proposals right now — between Comcast and Time Warner Cable and between AT&T and DirecTV — that threaten innovation and would restrict competition.

    But let’s take this moment to praise the regulators for what’s happening in the wireless industry. Thanks to a couple of wise moves on their part, it has become a pretty good market for consumers.

   Troy Wolverton is a technology columnist for the San Jose (Calif.) Mercury News.