Telecommunications: Concerns About Competition in the Cellular Telephone Service Industry
RCED-92-220
Published: Jul 01, 1992. Publicly Released: Jul 21, 1992.
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Highlights
Pursuant to a congressional request, GAO provided information on the competitive structure of the cellular telephone service industry, focusing on: (1) the Federal Communications Commission's (FCC) oversight of the industry; and (2) prospects for additional or enhanced competition.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Federal Communications Commission | The Chairman, FCC, should, in allocating the spectrum and granting licenses for the new personal communications services, consider establishing a policy that gives first preference to firms that are not current cellular telephone service providers in a given market area, particularly if only one new license is granted in each market. However, if in individual cases FCC determines that a cellular telephone service provider is the most appropriate new personal communications service licensee in a market that it already serves, FCC should ensure that other considerations outweigh the benefits of enhanced competition. |
FCC has adopted rules to conduct auctions for the award of more than 2,000 licenses to provide personal communications services (PCS). It will provide a variety of mobile services that will compete with existing cellular services. Between 2 and 4 licenses will be auctioned for each geographic area. FCC has established rules to disseminate licenses among a wide variety of applicants which includes a limitation on common ownership of cellular and PCS interest.
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| Federal Communications Commission | If obstacles, including the difficulty of reallocating the radio spectrum, delay the introduction of new personal communications services beyond the time frames that FCC currently envisions, the Chairman, FCC, should begin evaluating the status and development of competition in the cellular service industry. As a first step, FCC could obtain revenue, cost, and other financial data needed to assess the profitability of the cellular telephone service licensees operating in the 30 largest markets. FCC could use these data in determining whether further actions may be needed to protect consumers' interests. |
Agency officials generally agreed with the facts presented. FCC has established personal communications services (PCS). Because this recommendation only applies until PCS is established, it negates the need for ths recommendation.
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Cellular telephonesCompetitionstate relationsIndependent regulatory commissionsLicensesMonopoliesRadio frequency allocationRestrictive trade practicesTelecommunications industrySpectrum