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Federal Communications Commission FCC 01-192 Before the Federal Federal Communications Commission FCC 01-192 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Implementation of Section 6002(b) of the Omnibus ) Budget Reconciliation Act of 1993 ) ) Annual Report and Analysis of Competitive ) Market Conditions With Respect to Commercial ) Mobile Services ) ) SIXTH REPORT Adopted: June 20, 2001 Released: July 17, 2001 By the Commission: Table of Contents Page I. INTRODUCTION.......................................................................................................................3 A. Overview.........................................................................................................................3 B. Status of Competition......................................................................................................4 C. Industry Development......................................................................................................5 II. THE CMRS INDUSTRY............................................................................................................9 A. Mobile Telephony............................................................................................................9 1. Mobile Telephone Overview and Analysis ...........................................................9 a.Market Structure..............................................................................................9 b.Market Performance.......................................................................................21 c.Continued Rise of Digital ...............................................................................25 d.Pricing Data and Trends.................................................................................27 e.Wireless/Wireline Competition .......................................................................32 2. Other Competitors: Resellers and Satellite Operators .........................................34 a.Resellers ........................................................................................................34 b.Satellite Operators .........................................................................................35 3. International Developments ...............................................................................39 a.Foreign Investment in U.S. Mobile Operators .................................................39 b.U.S. Investment in Foreign Mobile Operators .................................................39 c.International Comparisons..............................................................................41 B. Mobile Data ..................................................................................................................46 Federal Communications Commission FCC 01-192 1. Introduction ......................................................................................................46 a.Domestic Developments .................................................................................46 b.International Developments ............................................................................47 c.3G Developments...........................................................................................48 2. Current Offerings..............................................................................................53 a.Paging/Messaging ..........................................................................................53 b.Mobile Telephone Operator Offerings ............................................................59 c.Handheld Devices...........................................................................................64 d.Dedicated Data Networks...............................................................................69 3. Developing Mobile Data Services......................................................................71 a.WAP .............................................................................................................71 b.M-Commerce.................................................................................................73 c.Location-Based Services.................................................................................74 d.Short Range Data Transmissions....................................................................77 4. Telemetry and Telematics..................................................................................80 III. CONCLUSION.........................................................................................................................82 IV. ADMINISTRATIVE MATTERS ..............................................................................................83 APPENDIX A: Fixed Wireless Voice and Data Services APPENDIX B: Spectrum Auctions Tables APPENDIX C: Mobile Telephony Tables APPENDIX D: Mobile Data Tables APPENDIX E: Maps 2 Federal Communications Commission FCC 01-192 I. INTRODUCTION A. Overview In 1993, Congress created the statutory classification of Commercial Mobile Services1 to promote the consistent regulation of mobile radio services that are similar in nature.2 At the same time, Congress established the promotion of competition as a fundamental goal for CMRS policy formation and regulation. To measure progress toward this goal, Congress required the Federal Communications Commission (“Commission”) to submit annual reports that analyze competitive conditions in the industry.3 This report is the sixth of the Commission’s annual reports on the state of CMRS competition.4 CMRS includes a large number of terrestrial services and also includes mobile satellite services involving the provision of such service.5 As in the past, this report bases its analysis on a consumer-oriented view of wireless services by focusing on specific product categories, regardless of their regulatory classification. In some cases, this includes an analysis of offerings outside the umbrella of “services” specifically designated by the Commission as CMRS.6 However, because licensees of these other spectrum-based services often compete with CMRS providers, as well as with other providers of telecommunications services, the Commission believes that it is important to consider them in the analysis. The structure of this report differs from the structure of the Fifth Report7 because it focuses on two categories of wireless services: mobile telephony8 and mobile data.9 This is a departure from the report’s 1 Commercial Mobile Services came to be known by the Commission as the Commercial Mobile Radio Services, or “CMRS.” 2 The Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-66, Title VI, § 6002(b), amending the Communications Act of 1934 and codified at 47 U.S.C. § 332(c). 3 Id. codified at 47 U.S.C. § 332(c)(1)(C). 4 This report, like the others before it, discusses CMRS as a whole because Congress called on the Commission to report on “competitive market conditions with respect to commercial mobile services.” 47 U.S.C. § 332 (c)(1)(C). Any individual proceeding in which the Commission defines relevant product and geographic markets, such as an application for approval of a license transfer, may present facts pointing to narrower or broader product markets than any used, suggested, or implied in this report. 5 47 CFR §20.9. 6 See, e.g., Section II.A.2.b, Satellite Operators, infra, which includes a discussion of satellite services that are regulated as commercial mobile radio services as well as satellite services that may compete with CMRS, even though they are not subject to the CMRS rules. 7 Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report and Analysis of Competitive Market Conditions with Respect to Commercial Mobile Services, Fifth Report, 15 FCC Rcd 17660 (2000) (“Fifth Report”). A copy of the Fifth Report that includes color versions of the maps may be found on the Commission’s Internet site at <http://www.fcc.gov/wtb/reports/fc000289.pdf>. 8 This report defines the mobile telephone segment to include the provision of mobile telephony services by cellular, broadband Personal Communications Services (“broadband PCS”), and digital Specialized Mobile Radio (“SMR”) operators. 3 Federal Communications Commission FCC 01-192 previous editions, in which there was also a separate section for dispatch services. While traditional dispatch service continues to be provided,10 there has been an increasing convergence of services provided by dispatch and other mobile telephony providers.11 Moreover, public information regarding dispatch services, as distinct from mobile telephony services, has become more limited. In the Fifth Report, public information was available regarding four providers of dispatch services. Two of these providers, Nextel Communications, Inc. (“Nextel”) and Southern LINC, a unit of energy concern Southern Company, offer dual, mobile telephony-dispatch services that straddle the mobile telephony and dispatch sectors. Of the other two major providers of dispatch services discussed in the Fifth Report, Chadmoore Wireless Group, Inc. (“Chadmoore”) and Mobex Communications, Inc. (“Mobex”), Nextel has announced plans to acquire Chadmoore and buy Mobex’s SMR licenses.12 Therefore, for purposes of this report, it is more appropriate to analyze these services as part of the mobile telephony sector. In addition, we no longer analyze the broadband PCS and cellular sectors separately within the mobile telephony section. As noted above, this report bases its analysis on a consumer-oriented view of wireless
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