The key takeaway from the press reports about the release of the Federal Communications Commission's annual report on mobile wireless competition is that the two main structures upon which the overall business is structured are moving in opposite directions.
The report focuses on the carriers. It finds, according to CIO.com, that the segment is consolidating:
The two largest mobile operators, AT&T and Verizon Wireless, have 60 percent of the country's mobile subscribers and of revenue, the FCC found. In addition, the biggest continued to grow, together gaining 14.1 million subscribers in 2009, while the smaller T-Mobile USA and Sprint Nextel lost a net 1.7 million subscribers in 2008 and gained only 827,000 in 2009. Industry consolidation has grown by 32 percent since 2003 according to one measure, the agency said in the 237-page report.
InformationWeek said that the report identified several trends, all of which certainly would be validated by industry observers. The report says the voice segment has matured; there is a need for more spectrum; data is hot; capital investment is "robust," but declining in relationship to the size of the industry; and there are more devices and applications available.
The reports offer some insight on the proliferation of devices, but the exact numbers aren't relevant because the report covers only 2008 and 2009. The crux of the report's view of the status of carriers is diametrically opposed to the device and application segments. The hardware sector, led by Apple's iPad and the ever-broader array of Android-based devices, is expanding faster than cosmologists say the universe is. On the software side, applications stores, software development initiatives and related creative undertakings are proliferating.
The National Journal story on the report has predictable quotes: CTIA President Steve Largent was quoted as being "disappointed and confused" that the FCC didn't rate the industry as competitive. Chris Riley, Policy Counsel to the Free Press-an organization on the left side of the political spectrum-called for a rulemaking to promote competition.
The dichotomy of an increasingly competitive hardware/software segment versus a consolidating carrier world is significant. A greater level of control naturally will flow to big carriers as they get bigger and the number of attractive handsets vying for exposure grows.
Everything in the regulatory world is connected, and it's worthy of note that this is the first report of its kind since 2002 that didn't rate the industry as competitive. The finding will almost certainly have a direct impact on the developing battle over the National Broadband Plan and at least a tangential impact on the FCC's reaction to the Comcast decision.