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Regulators Open Enquiry Into Wireless Competition

Ever notice that there are now just four main facilities-based nationwide carriers? The FCC has come to that realization, and on Thursday launched an official enquiry into the state of competition in the wireless industry.

At issue is whether the control that Verizon Wireless, AT&T Inc., Sprint Nextel Corp. and T-Mobile USA is consolidated enough to negatively impact consumer choice and fair pricing. Senator Herb Kohl, chairman of the Senate Judiciary subcommittee on antitrust, says together they own 90 percent of the market.

The enquiry will look into a variety of areas including spectrum, networks, devices, applications and business models. Meanwhile, a separate report will also determine the ease of entry for new players into the market.

One issue the FCC will be plumbing is handset exclusivity. In the past few weeks, rural carriers and associations have argued that the Big 4 have locked up access to high-end devices through exclusive deals, like AT&T with the iPhone, Sprint with the Palm Pre, T-Mobile with the G1 and myTouch Android handsets, and Verizon with the BlackBerry Storm. Often the big carriers don’t offer service in remote areas, leaving consumers there high and dry when it comes to the latest productivity tools.

Another issue under scrutiny is whether the big carriers are essentially price-fixing when it comes to services like texting, which has increased 100 percent in price within three years, to 20 cents per SMS message across the board.

“I hope the new wireless competition report will help set a standard for fact-based, analytically deep analysis of the mobile industry,” said FCC Chairman Julius Genachowski on Thursday.

The public comment period for both the competition and new entrant initiatives is 30 days.


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