FCC Should Include Call Quality in Its Annual Report on Competition in Mobile Phone Services

GAO-03-501: Published: Apr 28, 2003. Publicly Released: May 5, 2003.

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Mark L. Goldstein
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Over the past decade, Americans have come to rely increasingly on mobile phones to meet their business and personal needs. However, because of the nature of radio transmission and other constraints, consumers are not always able to complete calls or to hear their calls clearly. As reliance on mobile phones has increased, state officials, consumer groups, the media, and others have raised concerns about the extent of call quality problems. With regard to call quality, GAO agreed to describe the regulatory framework; determine the extent to which consumers are experiencing problems; and discuss actions for improving call quality suggested by interested parties.

In establishing a regulatory framework for mobile phone services, the Congress directed the Federal Communications Commission (FCC) to encourage competition among carriers. FCC believes that competition enables consumers to choose carriers that offer a desired level of call quality and that regulatory action establishing a minimum level of call quality would not be beneficial in a competitive environment. The Congress requires FCC to report annually on whether or not there is effective competition in mobile phone services. While call quality has been identified as a factor that affects consumers' choices of a carrier, FCC does not discuss call quality in this report. To assess the extent to which consumers are experiencing call quality problems--such as blocked or dropped calls, insufficient capacity, dead spots, or lack of coverage--we included questions on a national survey of adult consumers, conducted in November 2002. Our survey indicated that about four-fifths of adult mobile phone users were satisfied with their service, about one-tenth were dissatisfied, and the remainder indifferent. However, we also found that consumers are experiencing some call quality problems. For example, we estimate that about one-fifth of users were unable to successfully complete 10 percent or more of their calls, because their mobile phone network dropped the calls. Only limited information on call quality problems is available to the public or FCC. Interested parties have proposed actions that could provide consumers with better information to help them choose a carrier that matches their needs or would set industry-wide call quality standards for all consumers. However, some of the suggested actions could drive up the price of service, limit the entry of new carriers, or lead to a reduction of service in regions that are technically difficult or costly to serve. The carriers themselves say that they are taking actions to improve call quality and further regulation is not needed.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: FCC's most recent report on competition in mobile telephone services (10th report, September 2005) contains a substantive discussion of call quality, including overviews of the results of several consumer surveys on this issue, as well as a discussion/analysis of how market competition is driving improvements in call quality. In its public notice of January 2006 soliciting data and information for its next annual report on mobile phone competition (Fall 2006), FCC explicitly includes call quality as an area where it is seeking comment.

    Recommendation: To assist FCC in determining whether further regulatory action concerning mobile phone call quality is necessary, FCC should include call quality in its congressionally mandated annual report on competitive market conditions in the mobile phone industry. This report should incorporate an analysis of whether market competition is effective in ensuring that carriers are meeting consumers' expectations and desires regarding call quality.

    Agency Affected: Federal Communications Commission


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