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Highlights

Americans increasingly rely on wireless phones, with nearly 40 percent of households now using them primarily or solely. Under federal law, the Federal Communications Commission (FCC) is responsible for fostering a competitive wireless marketplace while ensuring that consumers are protected from harmful practices. As requested, this report discusses changes in the wireless industry since 2000, stakeholders' perceptions of regulatory policies and industry practices, and the strategies FCC uses to monitor competition. To conduct this work, GAO collected and analyzed data and documents from a variety of government and private sources; conducted case studies in both rural and urban areas of four states; and interviewed stakeholders representing consumers, local and state agencies and officials, and various segments of the industry.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Federal Communications Commission FCC should assess whether expanding its original data collection of wireless industry inputs and outputs--such as prices, special access rates, capital expenditures, and equipment costs--would help it better satisfy its requirement to review competitive market conditions with respect to commercial mobile services.
Closed - Implemented
The Federal Communications Commission (FCC) is responsible for fostering a competitive wireless marketplace while ensuring that consumers are protected from harmful practices. The Omnibus Budget Reconciliation Act of 1993 required FCC to submit an annual report that analyzes competitive conditions in the wireless industry. This report is a key basis on which federal wireless policies and regulations are developed and the primary tool used by FCC to monitor competition in the wireless industry. We found that FCC collects little original data on some industry inputs and consumer switching costs, generally using third-party data to report on industry wide trends. In particular, FCC lacks original data collection on prices, special access, capital expenditures, and devices and equipment. This hinders FCC's ability to examine the extent of competition in specific markets and sections of the industry. Therefore, we recommended that FCC assess whether expanding its original data collection of wireless industry inputs and outputs--such as prices, special access rates, capital expenditures, and equipment costs--would help it better satisfy its requirement to review competitive market conditions with respect to commercial mobile services. According to FCC staff, the Commission is taking appropriate steps to improve and streamline its data practices. First, on June 29, 2010, FCC established a pleading cycle for comments on its review of the Wireless Telecommunications Bureau's data practices. In particular, the Bureau sought comment on (1) the utility and rationale for each of its existing data collections, (2) additional data it needs to inform FCC policymaking activities, (3) how it can improve collection and analysis processes for existing collections, and (4) how it can improve dissemination of reports and analysis it produces. Second, on February 8, 2011, FCC sought comment on improving its broadband data collections, which included wireless data. FCC sought comment on several categories of data, including price, deployment, and service quality and customer satisfaction. Finally, on February 15, 2012, FCC proposed to reduce and remove several reporting requirements associated with licensing of cellular service. FCC proposed to streamline the application requirements for site-based Unserved Area applications and to delete obsolete and outdated provisions, such as those requiring certifications associated with cessation of analog service; FCC noted that these proposals were consistent with its regulatory reform agenda and its Data Innovation Initiative. Efforts to improve its data practices will help ensure that FCC and the Congress have sufficient information to make policy decisions concerning the wireless industry

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