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Federal Communications Commission
445 12th Street, S.W.
Washington, D.C. 20554
News media information 202 / 418-0500
Fax-On-Demand 202 / 418-2830
Internet: http://www.fcc.gov
TTY: 202/418-2555

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

August 3, 2000

News Media Contact:
Meribeth McCarrick at (202) 418-0654
e-mail: mmccarri@fcc.gov


Washington, DC - The Federal Communications Commission has adopted its Fifth Annual Report on the state of competition in the commercial mobile radio services (CMRS) marketplace. The Fifth Report concludes that during the past year consumers have continued to benefit from the effects of increased competition in the wireless industry. Increased competition has resulted in lower prices and a wider array of wireless service offerings.

Specifics of the Fifth Report:

The Fifth Report evaluates competition using a consumer-oriented view of wireless services by focusing on specific product categories, without regard to their regulatory classification. The report focuses on three categories of wireless services: mobile telephony, mobile data, and dispatch. The Fifth Report makes the following observations about these categories:

Mobile Telephony: The mobile telephony sector has experienced another year of strong growth and competitive development. In the twelve months ending December 1999, the mobile telephony sector generated over $40 billion in revenues, increased subscribership from 69.2 million to 86.0 million, and produced a nationwide penetration rate of roughly 32 percent. Mobile telephony carriers continue to deploy their networks. To date, 222 million people, or 88 percent of the total U.S. population, have three or more different operators offering mobile telephone service in the counties in which they live. Over 172 million people, or 69 percent of the U.S. population, live in areas with five or more mobile telephone operators competing to offer service.

The rapid rise of digital technology in the mobile telephone sector continues. The combined effect of increasing digital and declining analog customers has been that, at the end of 1999, digital subscribers made up 51 percent of the industry total, up from 30 percent at the end of 1998. Finally, in part because of growing competition in the marketplace, it appears that the average price of mobile telephone service has fallen substantially during the year since the FCC's Fourth Report on CMRS Competition, continuing the trend of the last several years. For example, according to the U.S. Department of Labor's Bureau of Labor Statistics, the price of mobile telephone service declined by 11.3 percent between the end of January 1999 and the end of January 2000. Other analyses estimate that mobile telephone prices fell as much as 20 percent between 1998 and 1999.

Mobile Data: Many analysts believe that the mobile data sector is beginning to bring the long-promised growth to mobile telephone and other wireless operators. The development of a number of new technologies has contributed to this turn of events. One of the most discussed technological transitions for the industry is the future migration of mobile telephone networks to third generation (or 3G) technologies with service offerings such as high speed Internet and video conferencing. In addition, new protocols and technologies are being developed that allow mobile telephones, mobile computers and other handheld devices to access the Internet. Virtually all wireless providers, from existing mobile telephone operators to numerous entrepreneurs, have announced plans to offer consumers an impressive variety of these new mobile data services.

Dispatch: Some dispatch operators are beginning to offer services that cater to the needs of the mobile voice sector. In addition, some mobile telephone operators are beginning to offer services that cater to the needs of the dispatch sector. These trends create the potential for increased inter-service competition. In addition, 220 MHz licensees are beginning to deploy their networks. Finally, the relocation process for the upper 200 channels in the 800 MHz band, under which geographic licensees are relocating holders of site-specific licenses, is ongoing and the FCC will soon conduct two auctions of 800 MHz licenses.

Action by the Commission on August 3, 2000 by Fifth Report (FCC 00-289). Chairman Kennard Commissioners Ness, Furchtgott-Roth, Powell and Tristani.

Wireless Bureau Contacts: Cindi Schieber at (202) 418-7530, e-mail: cschieber@fcc.gov; or Chelsea Haga at (202) 418-7991, e-mail:chaga@fcc.gov or TTY at (202) 418-7233.