Issuing its eighteenth annual report to Congress on the state of competition in the U.S. wireless sector, the FCC again refused to conclude whether the market is competitive. The Commission instead emphasized the need for additional spectrum resources, particularly from the upcoming incentive auction, which “will be used for the provision of mobile wireless service, with flexible use service rules.”

Adopted and released last Wednesday by the chief of the FCC’s Wireless Telecommunications Bureau (WTB), the 140-page report is the seventh in a row that draws no conclusion about the competitive state of the national wireless market. Although the report examines “market concentration, the conduct and rivalry of service providers and competition in other segments of the mobile wireless ecosystem,” the WTB cited the “complexity of the various interrelated segments and services within the mobile wireless ecosystem” in explaining that “any single  conclusion  regarding the effectiveness of  competition would be incomplete and possibly misleading in the light of the complexities we observe.” As it focuses instead on “key market segments such as spectrum and infrastructure,” the report spotlights current attitudes toward wireless telecommunications in which “consumers view various mobile voice, messaging and data services as interchangeable with one another.” Accordingly, the report emphasizes: “it is important to consider potential substitutes when analyzing the competitive landscape for these services and to evaluate the mobile wireless industry as a whole, rather than just focusing on the provision of services.”

The report also illustrates the effects of consolidation within the U.S. wireless industry, in which the top four national carriers accounted for 98% of the market’s total revenues during the first half of 2015 as opposed to 91.5% during the same period three years ago. At the same time, the rate of quarterly subscriber churn among the top four carriers fell, due mainly to the success of T-Mobile US in attracting new customers and retaining existing subscribers through aggressive marketing. Terming the ongoing consolidation trend as “alarming,” a spokesman for the Competitive Carriers Association (CCA) urged the FCC to “do everything possible to ensure a successful [incentive] auction outcome that puts low-band spectrum into the hands of competitive carriers as soon as possible which will promote lasting competition.” Nevertheless, industry association Mobile Future, whose members include Verizon and AT&T, faulted the FCC for choosing “not to recognize” that “our nation’s ever- changing  wireless  sector, fueled by $32  billion  in  annual  investment,  and endless choice of services, plans, carriers and devices, is the global standard of competition.”