Finding Effective Competition: A Look at the Wireless Telecommunications Market

The FCC will soon be releasing its annual report on wireless competition.  One key question, of course, is whether the market is competitive.  Proponents of regulation seem to believe that consumers are automatically endangered when there are only a few competitors.  But accepted economic literature and empirical research finds no evidence that market concentration, by itself, answers questions about market performance.  The issue of market structure and the impact on consumer welfare is far more complex than that.  A reflexive look at market structure, such as the number of competitors, is not an indicator of market failure.  Indeed, if the market performs well – exhibits high growth, low prices and a never ending expansion into new technologies and devices – then a focus on market structure is irrelevant.  This appears to be the case for the wireless services market ….

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