Telecommunications:

Competition in the Mobile Communications Industry

T-RCED-96-20, Oct 12, 1995

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GAO discussed some of the key changes occurring in the cellular telephone industry and their impact on competition. GAO noted that: (1) Congress and the Federal Communications Commission (FCC) have increased the amount of radio spectrum available for mobile telecommunications and have allowed new companies to provide these services; (2) the use of digital technology will result in greater utilization of the radio spectrum and is one of the most important factors affecting the cellular telephone industry; (3) new cellular providers are expected to enter the cellular market, increase competition, and lower consumer prices within the next 2 years; (4) cellular resellers are proposing to expand their role in delivering cellular service, so that they can create more competition and benefit consumers; and (5) this proposal is unlikely to provide lower prices for consumers, since resellers will not be competing at the wholesale level.