5 Reasons the FCC Should Regulate the Looming Wireless Duopoly

In an ideal free market system competition is fierce, which keeps consumer costs low and innovation high. As each company strives to earn your business, they offer deals, create new and better products, and the entire economy benefits. In a healthy market too much regulation is bad. It slows down the innovation process, which costs the companies money (costs that they pass on to the consumer).
However, in an unhealthy market, such as the current wireless carrier duopoly, new regulation would not only be helpful, it might be necessary. Here are five reasons why the FCC should regulate the Verizon/AT&T duopoly.

Wireless Service is Getting More Expensive

In 2011, 5 million people signed up for a mobile phone each quarter. In 2012 that number dropped to 3 million, and 2013 saw it drop to under 2 million new subscribers per quarter. This means that less and less wireless company revenue is coming from new contracts. Instead, the enormous profits in telecommunications are reaped by squeezing existing customers.
Wireless companies (or rather, Verizon and AT&T) are only able to do this because they control more than 70 percent of the US smartphone market. When AT&T was the only carrier to offer the iPhone, there was at least some semblance of competition between these two behemoths, however, now their pricing systems are almost identical. When one changes a policy, the other changes it within weeks, and none of these changes are making anything any cheaper. For a consumer standpoint, they're basically the same company.

The System is Rigged Against Smaller Companies

"Fair enough," you might say, "If Verizon and AT&T are abusing their customers, why don't those customers simply go to one of the smaller companies that offer cheaper rates, like T-Mobile, Sprint, or a regional carrier?" Good question.
One reason is that once 2-4 people have signed up with Verizon or AT&T with a "family plan" it is prohibitively complex to switch everyone over to a new wireless carrier. For some families college age children aren't home most of the time, making it difficult to switch, or the upgrade system gives different family members access to new phones at different times (each requiring a contract renewal). The duopoly does anything and everything in their power to make it difficult for you to leave.
Another reason is that, as CEO Michael Prior put it, "Telecom is an infrastructure business." Essentially, that means it is too expensive for new competitors to enter the market - essentially ensuring Verizon and AT&T maintain control by default.
Fortunately, according to BGR, it looks like Sprint may acquire T-Mobile, which might add a third player powerful enough to create real competition with AT&T and Verizon. Without such a merger, however, FCC regulation would be the only way to make the market competitive again.

The Current System Impedes the Rest of the Economy

According to Steve Berry, a columnist for Light Reading, "History shows that preserving and enhancing wireless competition is a vital means of driving economic growth and job creation, maintaining our nation's global competitiveness, promoting continued innovation, and enhancing consumer welfare."
While this might seem like a bold claim, it actually makes perfect sense. Businesses often give cell phones to their employees (usually smartphones). If the wireless duopoly is gouging them they way the are with the rest of their consumers, then the business will have less money to spend on other things (like their own infrastructure, or payroll).

Light Regulation Now Could Prevent Heavy Regulation Later

This might seem paradoxical - creating regulation to prevent regulation. However, if the FCC can create some light regulation now, like ensuring that all carriers have access to 4G LTE (which they don't at the moment), the market will become more competitive. If the market becomes more competitive, then it will, once again begin to (more or less) regulate itself and more draconian regulation won't be necessary.
So, if you're tired of expensive and complex phone contracts, of rate hikes and hidden conditions, write to the FCC and tell them that you're in favor of regulating the Verizon/AT&T duopoly.