_Consumer groups urge FCC to collect their own data on wireless competition…_

By Karl Bode, DSL Reports

You won’t find a telecom executive or lobbyist who won’t insist the sector they do business in is the most competitive sector to ever grace the planet Earth. It’s a job requirement. In the broadband industry, most consumers know better — as many have the choice of only one or two carriers. Duopoly competition isn’t really competition, as it allows carriers to engage in non-price competition, keeping prices high as part of an unspoken gentleman’s agreement.

In the wireless sector it’s easier for the industry to successfully convince consumers they exist in a mobile competitive nirvana, given there’s at least four major carriers (Sprint, T-Mobile, AT&T and Verizon) on top of a number of pesky smaller upstarts with limited footprints and creative pricing (Cricket, MetroPCS). But more carriers doesn’t naturally mean there’s robust competition.

AT&T has the lowest churn rate in the industry despite all of the problems they’ve had with their network, because exclusive handset deals, long term contracts and early termination fees constrict consumer choice and reward carriers who don’t perform. Steep roaming costs, high overage fees, and the mysterious ability for carriers to collectively raise SMS prices some 200% in concert for a fixed-cost service all suggest competitive problems.

As recently noted, the FCC has begun investigating just how competitive the wireless sector really is. Carriers have come running, farmed think tank data in hand, proving they operate in a competitive wonderland. As you might imagine, consumer advocates disagree, a coalition of them arguing in a filing (pdf) with the agency that real data shows an ever consolidating industry with major competitive shortcomings. The firms also argue that while revenues soar, this lack of competition is keeping carriers from investing that money back into the network:
Proper application of the traditional framework for assessing competition in the mobile wireless space shows a lack of real competition in that market. Readily apparent competitive failings stem from fundamental flaws in the market structure of an ever-more-concentrated industry, and are a direct result of the incomplete information that carriers make available to customers and regulators alike about their prices and terms of service.

Skewed market results and performance are an easily detectable symptom of these ills, which the Commission will need to address and resolve if it is to solve underlying problems that lead to higher prices and fewer options for consumers – all while carrier revenues increase, marginal costs fall, profits rise, and relative investment levels dip.

If you’d like to see this theory at play you need only look at AT&T. AT&T posts record data revenues each quarter, yet executives dropped their wireless investment CAPEX, ignoring engineer warnings about how an influx of data-hungry iPhone users would strain their HSDPA networks. Only after the company’s brand image started taking a vicious beating in the national press did AT&T engage in damage control, and now tells anyone who’ll listen about their renewed plans for 850 MHz migration, added cellular backhaul and new towers.

Consumer groups urge the agency to start collecting its own data on wireless competition, instead of using wireless carrier farmed think tank data. Independent science has traditionally been a weak-area for the well-lobbied FCC, which has a long, proud history of taking carrier claims (and junk science) at face value, while never seeing a merger they don’t absolutely adore.