Research: Mobily Competitive
Looking for Trouble: The FCC’s Mobile Competition Report
The Information Technology & Innovation Foundation
June 2, 2010
In Bennett’s latest work he investigates the FCC’s Mobile Competition Report. Bennett believes that the U.S. cellular market appears healthy. He points out that Americans pay the lowest price for minutes in the world and have access to the latest and greatest phones that cost less than European alternatives that are not quite as stellar. But he points out that the FCC’s latest report paints a dire picture of the marketplace that is in need of regulation.
Bennett analyzes three key issues relevant in the report:
- Market Concentration – This looks at the size of companies compared to the industry they reside in to determine the competition among those companies and is based on the Hefindahl-Hirschman Index.
- Decreased Investment – This section reviews the FCC’s claim that investment is decreasing in the mobile industry.
- Excess Profitability – Finally, an examination of the FCC’s suggestion that two particular players in the mobile industry are seeing record profits while others are showing decreasing profits.
Bennett concludes that the FCC is reluctant to indicate that the mobile marketplace is a competitive marketplace and feels that the report in inconclusive and leaves out key analysis of the subject matter.
You can find the paper here.