Before the

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					                                    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                             )        WT Docket No. 08-27
                                        )
Annual Report and Analysis of           )
Competitive Market Conditions With      )
Respect to Commercial Mobile Services   )




            COMMENTS OF CTIA-THE WIRELESS ASSOCIATION®




                                                                     Michael Altschul
                                            Senior Vice President and General Counsel

                                                        Christopher Guttman-McCabe
                                                    Vice President, Regulatory Affairs

                                                              Robert F. Roche, Ph.D.
                                                             Vice President, Research

                                                                         Marlo A. Go
                                                                        Staff Counsel


                                        CTIA-THE WIRELESS ASSOCIATION®
                                                    1400 Sixteenth Street, N.W.
                                                                      Suite 600
                                                      Washington, D.C. 20036
                                                                (202) 785-0081



Dated: March 26, 2007
                                       SUMMARY


       By these comments, CTIA-The Wireless Association® (“CTIA”) responds to the

Commission’s request for information regarding the state of competition in the wireless

industry for incorporation into the Thirteen Annual CMRS Competition Report.

       Competition is flourishing among facilities-based CMRS carriers and against

other providers. In the remarkably competitive wireless market, carriers differentiate

themselves through network reliability and coverage as well as through new service

offerings, pricing plans and enhanced handset options. Output and investment remains

strong even in the face of an economic downturn and high subscriber penetration.

Players in the wireless industry strive to attract new customers while keeping current

subscribers satisfied by offering quality service at affordable prices as well as meeting

consumer demand for advanced wireless services.

        Thanks to intense competition, as well as a relatively light-handed regulatory

environment, wireless carriers in the U.S. are free to market services in increasingly large

bundles and through more attractive and innovative service offerings. CTIA suggests the

FCC can do more to further Congress’ directive to ensure competition continues to thrive.

As CTIA remarked in its comments in the preceding CMRS Competition dockets,

“Commission action, or at times inaction, is needed on a number of issues in order to

continue to promote the benefits of the competitive wireless industry for consumers and

the U.S. economy.” Specifically, the wireless industry is asking the Commission to

dismiss the pending Vuze and Free Press Petitions, which seek one-size-fits-all

regulations that would undermine the ability of broadband providers – especially

spectrum-based wireless broadband providers – to uniquely manage their networks in the



                                             ii
yet nascent and rapidly evolving broadband market; to recognize the benefits that term

contracts can deliver to consumers and make the determination that Early Termination

Fees are part of carriers’ rate and rate structure; to dismiss the pending Skype Petition

seeking imposition of Carterfone-type regulations on CMRS providers; to decline to

impose net neutrality regulations with respect to content, application, or device access

obligations on wireless broadband providers or to adopt a new nondiscrimination

principle; to ensure that the mobile wireless industry has access to additional licensed

spectrum in order to facilitate further deployment of bandwidth intensive next generation

voice, data, and video services; and to recognize the benefits that the U.S. wireless

industry now brings to wireless consumers specifically, and to the American economy in

general.




                                             iii
                                                TABLE OF CONTENTS

I.   WIRELESS SERVICES PLAY AN INCREASINGLY SIGNIFICANT ROLE IN THE
     LIVES OF AMERICAN CONSUMERS .............................................................................. 3
     A.          CONSUMER BEHAVIOR ............................................................................................... 4
     B.          COMPETITION IN VOICE SERVICES ........................................................................... 5
     C.          COMPETITION IN BROADBAND SERVICES................................................................. 7
II. CMRS INDUSTRY SUSTAINS INVESTMENT IN INFRASTRUCTURE AND
    DEVELOPMENT OF NEW SERVICES AND TECHNOLOGIES ................................ 10
III. CONSUMERS BENEFIT FROM THE THRIVING COMPETITION AMONG
     TERRESTRIAL FACILITIES-BASED CMRS PROVIDERS AND AGAINST OTHER
     MOBILE PROVIDERS........................................................................................................ 13
IV. CARRIERS DISTINGUISH THEMSELVES THROUGH SERVICE OFFERINGS,
    PRICING PLANS AND EXCLUSIVE HANDSET OFFERINGS................................... 16
     A.          PRICING PLAN INNOVATIONS .................................................................................. 17
     B.          HANDSET INNOVATIONS & COMPETITION ............................................................. 18
     C.          SOURCES OF INFORMATION ..................................................................................... 21
CONCLUSION............................................................................................................................ 22

ATTACHMENT A: CTIA Ex Parte Communication, State of the Global Marketplace
(January 8, 2008)

ATTACHMENT B: CTIA Ex Parte Communication, Major Accomplishments of the U.S.
Wireless Industry (January 23, 2008)

ATTACHMENT C: CTIA Ex Parte Communication, Handset Market in the United States
is Extremely Robust (March 20, 2008)
                                     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                                   )       WT Docket No. 08-27
                                              )
Annual Report and Analysis of                 )
Competitive Market Conditions With            )
Respect to Commercial Mobile Services         )


            COMMENTS OF CTIA-THE WIRELESS ASSOCIATION®

       CTIA-The Wireless Association® (“CTIA”) 1 hereby submits the following

comments in response to the Federal Communications Commission’s (“Commission” or

“FCC”) February 25, 2008 Public Notice requesting data and information regarding the

state of competition in the Commercial Mobile Radio Service (“CMRS”) industry. 2 The

Commission has long recognized that there is effective competition in the United States

wireless marketplace. 3 U.S. wireless consumers continue to reap the benefits of low




1
  CTIA – The Wireless Association® is the international organization of the wireless
communications industry for both wireless carriers and manufacturers. Membership in the
organization covers Commercial Mobile Radio Service (“CMRS”) providers and manufacturers,
including cellular, Advanced Wireless Service, broadband PCS, and ESMR, as well as providers
and manufacturers of wireless data services and products.
2
 WTB Seeks Comment on CMRS Market Competition, Public Notice, WT Docket No. 08-27,
DA 08-453 (Feb. 25, 2008) (hereinafter, “Notice”).
3
  See 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, Twelfth Report, WT Docket No. 07-71, FCC 08-28, ¶1 (rel. Feb. 4, 2008)
(“Twelfth Report”); In re 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, Eleventh Report, WT Docket No. 06-17, FCC 06-142,
¶¶ 2-5 (Sept. 29, 2006) (“Eleventh Report”).

                                              1
prices, new technologies and devices, improved service quality, and choice among

providers.

          The success of the CMRS marketplace is due in part to the FCC’s winning

approach of free and open auctions, flexible license rules and deregulation. The

Commission’s light regulatory touch of allowing licensees to manage the efficiency of

their networks and to maximize technology and service advances has produced a wireless

market that is the envy of markets worldwide. The U.S. wireless industry consistently

demonstrates year after year that competition from multiple providers, not government

intervention, is the best driver of innovation to meet the needs of consumers. 4 CTIA

urges the Commission to maintain its posture of limited regulatory intervention and tread

cautiously when considering proposals for regulation. 5 For the public interest, it is

imperative that the Commission refrain from over-regulating an industry that continues to

prove to be one of the most vibrant and dynamically competitive sectors of the U.S.

economy.

          Even with the promising state of the CMRS industry, there is more the FCC can

do to further Congress’s directive to promote competition. As existing and prospective

mobile wireless providers must continually introduce new technologies and new service

applications (such as mobile broadband Internet access, mobile TV, and other advanced

services) in order to survive in the highly competitive, consumer-oriented marketplace,

the Commission should commit to addressing issues that threaten to impede the sustained

evolution of the wireless industry. 6


4
    See Twelfth Report at ¶ 2.
5
    See id .at Statements of Commissioners Tate and McDowell.
6
  See, for example, In re Vuze, Inc. Petition to Establish Rules Governing Network Management
Practices by Broadband Network Operators, Free Press, et. al., Petition for Declaratory Ruling
                                               2
          The following Comments respond to the FCC’s Notice and request for data and

information to help the Commission and Congress evaluate the state of competition in the

CMRS industry in 2007 for its Thirteenth Annual Report and Analysis of Competitive

Market Conditions with Respect to Commercial Mobile Services (“Thirteenth Report”).

These Comments also note where the Commission must act in order to continue to

promote the benefits of competitive wireless services for consumers and the U.S.

economy. 7

I.        WIRELESS SERVICES PLAY AN INCREASINGLY SIGNIFICANT
          ROLE IN THE LIVES OF AMERICAN CONSUMERS

          As CTIA has advocated in the past, the Commission should develop its current

docket based upon the FCC’s historical record, consisting of twelve consecutive dockets,

which repeatedly conclude that the mobile wireless industry is robustly competitive in

both rural and urban markets. 8 CTIA appreciates this opportunity to share with the

Commission its observations regarding the wireless marketplace as whole. Although

CTIA does not itself possess non-public provider-specific or granular market-level

information (e.g., provider-specific marketing and build-out information, or non-

aggregated penetration and usage data), 9 the following Comments offer the proper

context in which to analyze the wireless industry’s competitive performance and


Regarding Broadband Industry Practices, Comments of CTIA-The Wireless Association®, WC
Docket No. 07-52 (filed Feb. 13. 2008) (“CTIA Comments to Vuze and Free Press Petitions”); In
re Policy and Rules Concerning the Interstate, Interexchange Marketplace, Implementation of
Section 254(g) of the Communications Act as Amended, Opposition of CTIA-The Wireless
Association® to Petition for Rulemaking, RM No. 11415 (filed Feb. 21, 2008); In re Broadband
Industry Practices, Comments of CTIA-The Wireless Association®, WC Docket No. 07-52 (filed
June 15, 2007).
7
    Id.
8
  See Twelfth Report, COMMENTS OF CTIA-THE WIRELESS ASSOCIATION®, WT Docket No. 07-
71at 3-4 (May 7, 2007) (“CTIA 2007 Competition Report Comments”).
9
    Carriers publish coverage maps on their websites.

                                                  3
references sources of information that will help both the Commission and Congress

understand the wireless industry’s current state of competition.

           A.      Consumer Behavior

       In the last year, Americans across all demographics and incomes continue to

subscribe to and rely on wireless service. Americans generated 1.012 trillion minutes of

use (“MOUs”) the first six months of 2007 (up from 857 billion minutes in the first six

months of 2006). 10 Wireless MOUs have consistently climbed by double-digits year

after year as the average wireless customer in the U.S. enjoys approximately 831 wireless

minutes of use per month. 11




10
  CTIA-The Wireless Association® Written Ex Parte Communication, PS Docket No. 06-229,
WT Docket Nos. 96-86, 05-194, 06-150, 06-169, 07-71 (Jan. 23, 2008), available at
http://files.ctia.org/pdf/080123_Ex_Parte_Wireless_2007_Facts.pdf (“Attachment B”).
11
   Glenn Cambell, et al., “Global Wireless Matrix 32Q07,” Merrill Lynch, Dec. 24, 2007, at 2
(“Merrill Lynch”). See CTIA Wireless Quick Facts, available at
http://www.ctia.rg/advocacy/research/index.cfm/AID/10323; See also,
http://files.ctia.org/pdf/CTIA_Survey_Mid_Year_2007.pdf.

                                               4
          As of June 2007, more than 150 wireless companies provided service to more

than 243 million subscribers nationwide, a figure that increased by almost 24 million

from just one year earlier. 12 While this level of growth is remarkable, CTIA’s current

estimates show that wireless subscribership has now surpassed 256 million. 13 With

approximately 303 million persons residing in the U.S., 14 wireless penetration in the U.S.

now stands at 84 percent, representing an increase from 80 percent as of mid-year 2007.




              B.     Competition in Voice Services

          Wireless is increasingly considered to be a complete substitute for wireline

services as more consumers “cut the cord,” demonstrating trust and the dependability in

their wireless provider. The National Center for Health Statistics (“NCHS”) has been

12
     See Attachment B.
13
     See Estimated Current US Wireless Subscribers, available at www.ctia.org.
14
   See U.S. Census Bureau, U.S. and World Population Clocks – PopClocks, available at
http://www.census.gov/main/www/popclock.html (accessed March 22, 2008).

                                                5
tracking the steady growth of wireless-only households over the past four years,

including year-to-year trends and the different distribution of such households across the

country. An early release of the January – June 2007 survey results found that one out of

every eight American homes lacks a traditional landline telephone (13.6%) and uses only

mobile phones for communications. 15 Among the subgroups examined, adults living with

unrelated roommates have the highest prevalence rate of living in a wireless-only

household (55.3%). 16 As the following graphic provided by NCHS illustrates, 12.6% of

adults and 11.9% of children lived in households with only wireless phone service in

January – June 2007 by contrast with 4.4% and 3.7%, respectively, as of January – June

2004.




15
   Center for Disease Control, Wireless Substitution: Early Release of Estimates from the
National Health Interview Survey, January-June 2007 (rel. Dec. 10, 2007), available at
http://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless200712.pdf. See also Associated Press,
Survey tracks nation’s shift from landlines to cell phones, CNN.com/technology (Dec. 10, 2007);
Kelly Hill, Survey: 13.6% of American homes have only cellphones, RCR Wireless News (Dec.
11, 2007).
16
     Id.

                                               6
A recent MyWireless.Org® National Consumer Study of 2008 found that if forced to

choose, a majority of consumers would keep their wireless phone service instead of their

landline phone service. 17 Further, wireless substitution could reach almost one-third of

households by 2012 according to Morgan Stanley: “This phenomenon is driven by

improved wireless coverage and better pricing and will be supported by new handsets and

new wireless technologies.” 18

             C.     Competition in Broadband Services

         In the broadband marketplace, CTIA is proud of the success of mobile wireless

service providers. The availability and subscription to wireless broadband Internet access

is progressing at a blistering pace. While consumers today have the option of choosing

from a number of broadband access providers that include not only wireless but also

cable, traditional telephone, Broadband over Power Line (“BPL”) and other providers,

mobile wireless broadband Internet access remains the fastest growing segment of the

U.S. broadband market. Notably, the Commission’s most recent study shows mobile

broadband additions driving the growth of high-speed lines overall. 19 The following

graph demonstrates how wireless broadband additions from June 2006 to June 2007

outpaced the additions for cable companies and traditional telephone companies

combined both in total numbers and as a percentage of all broadband additions.




17
     MyWireless.org® National Consumer Survey (conducted March 17-19, 2008).
18
   See Simon Flannery, et. al., Cutting the Cord: Wireless Substitution Accelerating, Morgan
Stanley Telecom Services (Sept. 27, 2007).
19
  See High-Speed Services for Internet Access: Status as of June 20, 2007 (Mar. 2008) (“2007
High-Speed Services Report”).

                                               7
Collectively, wireless companies are providing wireless broadband coverage to roughly

250 million Americans in communities across the country. 20 The FCC’s 2007 High-

Speed Services Report found an increase of 13 million new mobile wireless high-speed

lines in just six months resulting in a total mobile wireless count of 35.3 million high-

speed lines in June 2007, up from an adjusted 22.3 million as of year-end 2006. 21 The

Report also notes the number of mobile wireless residential high-speed and advanced

lines was 5.5 million as of June 2007. 22

           Wireless consumers have a number of options for mobile Internet access.

Consumers requiring less data can choose to subscribe to metered broadband, paying for

either a bucket of bits – similar to voice plan pricing – or simply paying for the bits




20
     See supra notes 12-13.
21
     2007 High-Speed Services Report at Tables 1, 6.
22
     Id. at Tables 3, 4.

                                                 8
used. 23 This option enables consumers to tailor their wireless service plans to their

broadband needs. Like wireline broadband offerings, wireless broadband customers also

have the choice of subscribing to “all-you-can-eat” broadband offerings either on a

month-to-month basis or under longer term contracts providing discounted recurring and

non-recurring fees. Through innovative service features and plans, wireless carriers are

bringing additional competition to the broadband marketplace and offering American

consumers unique new ways to stay connected to information.

        Despite wireless broadband service offerings, some posit the lack of a third pipe

to the home and ignore the many American communities that have three, four, five, or

more additional choices in the form of mobile wireless broadband competitors to the

person. In these communities, residents have the option of using wireless broadband as a

complement to, or complete substitute for, traditional wireline broadband. As the record

demonstrates, consumers have shown significant interest in adopting wireless broadband

as a viable competitive alternative to traditional wireline Internet access options. Unlike

traditional wireline Internet access, wireless broadband untethers users by offering the

unique benefit of mobility. Wireless is not a third pipe into the home, but rather a third

pipe to the person, wherever they are, whenever they want access to information. For

some areas, mobile wireless broadband may be the only broadband option available.

Certainly, rural and high-cost areas benefit from the availability of broadband mobile

wireless technologies.




23
  See, e.g., “Mobile Broadband Connection Plans,” Sprint/Nextel, available at
http://nextelonline.nextel.com/NASApp/onlinestore/en/Action/SubmitRegionAction (last
accessed June 13, 2007); see also “Data Cell Phone Plans,” AT&T, available at
http://www.wireless.att.com/cell-phone-service/cell-phone-plans/data-cell-phone-plans.jsp (last
accessed June 13, 2007).

                                                9
            Today, broadband providers face unique challenges in continuing to bring

consumers the high quality, high-speed, innovative services they demand. Wireless

providers face particularly high hurdles to delivering broadband service because of the

shared and scarce nature of spectrum and the challenge of providing time-sensitive voice

communications over the same interface as high-speed data. In the nascent and rapidly

evolving mobile wireless broadband market, carriers need to retain the ability to manage

their networks to provide consumers not only with a positive broadband experience, but

also with the security of an “always with you” mobile voice network. For these reasons,

the Commission should take steps to preserve the ability of broadband carriers to manage

their unique networks for the benefit of their customers. 24

      II.      CMRS INDUSTRY SUSTAINS INVESTMENT IN INFRASTRUCTURE
               AND DEVELOPMENT OF NEW SERVICES AND TECHNOLOGIES

            At a time when the U.S. economy heads toward a potential recession, the wireless

industry continues to commit substantial resources to meet evolving consumer demands.

The wireless industry’s astounding growth and improved quality of service would not be

possible without such sizeable investment in innovative technology and infrastructure.

Since network reliability and reach are pivotal to the ability to compete, wireless carriers

invest billions of dollars each year to improve the coverage and capacity of their

networks. For the first half of 2007, the wireless industry’s six-month incremental capital

expenditures in operational systems was $9.71 billion, resulting in a total cumulative

capital expenditure in operational systems of more than $233 billion (not including

billions paid to the federal treasury for spectrum). 25



24
     See CTIA Comments to Vuze and Free Press Petitions.
25
     See Attachment B.

                                               10
         The growth of wireless high-speed Internet access and broadband offerings is

explosive. Many wireless providers are actively preparing to buildout spectrum acquired

from recent major auctions, including the 700 MHz and Advanced Wireless Service

(“AWS”) auctions. Licensees are eager to deploy the next generation of broadband-

capable services that can support the latest applications and instantly transmit large

music, image and video files. The results from the recent 700 MHz auction illustrate that

wireless providers are committed to improving and expanding their networks and have

pledged billions of dollars to acquire valuable “beachfront” spectrum that promises the

capability to deploy higher-performance mobile broadband services over greater

distances than the services offered today. 26 These auctions also demonstrate the real and

immediate need for additional licensed spectrum to facilitate deployment of mobile

wireless voice; data, and video services. To that end, the Commission should assign more

spectrum, via auctions, for these uses.

         Carriers across the country, including those in rural markets continually deploy

mobile data and broadband to bring new technologies at faster speeds to consumers. The

following is a snapshot of some of CTIA’s members’ high-speed wireless data service

offerings and plans for investment in next-generation wireless infrastructure:

     •   Alltel: AxcessSM Broadband service (EVDO) offers speeds of 400-700 kilobits
         per second (Kbps) with maximum speeds of up to 2.4 Mbps. 27
     •   AT&T: BroadbandConnect (HSDPA) service offers speeds of 400-700 Kbps. By
         the end of 2008, AT&T plans to expand its U.S. wireless 3G network to more
         than 80 additional cities to serve nearly 350 leading U.S. markets, including the

26
   See Auction of 700 MHz Licenses Closes, Winning Bidders Announced for Auction 73, Public
Notice, DA 08-595 (Mar. 20, 2008). Auction 73 raised a total of $18,957,582,150 in net winning
bids with the lion’s share committed by Verizon Wireless, spending $9.63 billion for all of the
open-access, C-block licenses covering the continental U.S. and AT&T, pledging $6.64 billion
for 227 B-Block licenses.
27
  Alltel Is The First Carrier To Offer Wireless Broadband In South Dakota, Press Release (Jan.
10, 2008).

                                              11
         100 largest cities. AT&T’s 4G initiative is underway including plans to rollout its
         High Speed Uplink Packet Access (HSUPA) network by midyear. 28
     •   Sprint Nextel: The Sprint Mobile Broadband Network reaches more than 234
         million people, 13,453 cities and 1,321 airports, with the majority upgraded to the
         faster EV-DO Rev. A technology which supports average download speeds of 600
         Kbps - 1.4 Mbps and average upload speeds of 350-500 Kbps. 29
     •   T-Mobile USA: Offers mobile Internet access through General Packet Radio
         Service (GPRS), Enhanced Data for GSM Evolution (EDGE), and Wi-Fi Internet
         connectivity. T-Mobile HotSpots feature broadband-speed wireless data service at
         up to 1.5 Mbps. 30
     •   Verizon Wireless: BroadbandAccess EV-DO network has been enhanced with
         EV-DO Rev. A and reaches more than 240 million people in 248 major
         metropolitan areas and 232 primary U.S. airports. Subscribers can expect average
         download speeds of 600 Kbps - 1.4 Mbps and upload speeds of 500-800 Kbps. 31

Further, wireless providers are increasingly sharing facilities, deploying stealth towers

and seeking alternative siting options, such as pole attachments, buildings, and rooftops,

to upgrade their networks while minimizing the impact on the environment. 32 As of June

2007, the industry deployed 12,784 new cell sites. Consider the following graph, which




28
   See AT&T Expanding Wireless Broadband Coverage in Mississippi; Plans to Invest $66
Million in Network Upgrades in 2008, Press Release, available at http://www.att.com/gen/press-
room?pid=4800&cdvn=news&newsarticleid=25357 (Mar. 19, 2008); AT&T Plans Major
Expansion of 3G Wireless Broadband Service in 2008, Press Release (Feb. 6, 2008).
29
  See Sprint Delivers First EV-DO Rev. A-Capable Handset with Enhancements for the MogulTM
by HTC, News Release, available at
http://newsreleases.sprint.com/phoenix.zhtml?c=127149&p=irol-
newsArticle_newsroom&ID=1117016&highlight= (Mar. 10, 2008).
30
  See T-Mobile Frequently Asked Questions, What is the T-Mobile Total Internet Plan?,
available at http://www.t-
mobile.com/templates/faq.aspx?PAsset=Int_Pop_FAQ&CAsset=devicecomp (accessed Mar. 24,
2008).
31
   See Verizon Wireless Broadband Coverage & Speeds, available at
http://b2b.vzw.com/broadband/coveragearea.html (accessed Mar. 24, 2008).
32
  See generally, In re Implementation of Section 224 of the Act; Amendment of the
Commission’s Rules and Policies Governing Pole Attachments, Comments of CTIA-The
Wireless Association®, WC Docket No. 07-245, RM-11293, RM-11303 (Mar. 7, 2008).

                                              12
shows the yearly increase in cell sites necessary to support wireless subscribers:




These considerable on-going investments will allow carriers to expand and enhance

reliability of their networks to support new and better services for American consumers.

   III.      CONSUMERS BENEFIT FROM THE THRIVING COMPETITION
             AMONG TERRESTRIAL FACILITIES-BASED CMRS PROVIDERS
             AND AGAINST OTHER MOBILE PROVIDERS

          The rapid adoption of wireless telephony by Americans is one of the most

remarkable trends in communications as so many consumers have flocked to the vast

array of choices and fierce competition that marks the U.S. wireless industry. There is no

disputing the record in wireless competition and the level of choice of carriers and

handsets is astounding. There are ten facilities-based carriers that serve more than one

million subscribers in the U.S. More than 98 percent of Americans have a choice of three

or more wireless carriers; 94 percent have a choice of four or more; and 51 percent have a




                                             13
choice of five or more wireless carriers. 33 With more than 150 national and regional

wireless carriers that serve Americans, the U.S. market boasts broad competition.




           Value continues to be the driver of wireless growth. Consumers have options to

choose from multiple carriers who vie head-to-head to provide the best service at the

lowest price. Currently, there are four national facilities-based carriers, ten Tier 2 carriers

operating regionally and 138 Tier 3 carriers that compete in smaller markets.

Importantly, no one carrier holds a dominant share of the wireless market. As of the third

quarter of 2007, the five largest wireless providers claimed a combined 89 percent market

share, 34 as follows:

       •   AT&T Mobility – 65.27 million (26 percent)
       •   Verizon Wireless – 63.65 million (25 percent)


33
     See Attachment B.
34
     Id.

                                              14
      •   Sprint Nextel – 54.05 million (22 percent)
      •   T-Mobile USA – 27.67 million (11 percent)
      •   Alltel – 12.45 million (5 percent)

The competitiveness of the wireless marketplace is further underscored by the over 1,200

exhibitors at CTIA WIRELESS 2008® that will showcase devices, infrastructure,

enabling technologies, and entertainment and business applications. 35 Additional

evidence of the intense competitive nature of the wireless industry is the media saturated

with advertisements for the wireless industry.

          Even with the current number of contenders in the wireless space, there is plenty

of opportunity for entry to the market as exemplified by the recent 700 MHz, AWS-1 and

Broadband PCS auctions. Contrary to allegations that the big companies block spectrum

access, or buy up the available spectrum, three new nationwide providers were created in

the AWS auction in 2006. T-Mobile USA was the top bidder, a new entrant (the cable

providers) was third, Metro PCS was fourth and Leap Wireless (Cricket) was sixth. 36

New entrants from the 700 MHz auction include EchoStar, Chevron, Cox

Communications, and Vulcan Ventures, owned by Microsoft co-founder Paul Allen. 37

New entrants have unprecedented access to the spectrum they need both through the

auction process and through spectrum leasing arrangements with existing facilities-based

carriers.

          Beyond the facilities-based carriers, a flourishing resale market has emerged with

the proliferation of Mobile Virtual Network Operators (“MVNOs”). More than 40


35
  See CTIA WIRELESS 2008® Showcases Mobile Lifestyle Innovations, available at
http://www.wirelessdevnet.com/news/2008/mar/19/news2.html (Mar. 18, 2008).
36
   See FCC Report, Advanced Wireless Services Auction No. 66 ***Final***, available at
http://wireless.fcc.gov/auctions/66/charts/66press_3.pdf.
37
     Auction of 700 MHz Band Licenses Closes, Public Notice, Attachment A (Mar. 20, 2008).

                                               15
MVNOs compete to serve consumers, offering personalized and differentiated products

and services, including tailored handsets and applications. 38 These MVNOs target

specific demographic and specialized interest groups by appealing to various lifestyles,

including the young, the elderly, differing ethnicities, the hip and trendy to user-friendly

and affordable. 39 For example, Boost Mobile and Helio appeal to young urbanites and

the upwardly mobile twenty-somethings. While Kajeet is focused on tweens, Jitterbug by

Greatcall, Inc. serves the needs of senior citizens. Two additional nationwide MVNOs,

TracFone and Virgin Mobile serve roughly 14.5 million subscribers offering their

customers affordable handsets and prepaid plans. 40

     IV.      CARRIERS DISTINGUISH THEMSELVES THROUGH SERVICE
              OFFERINGS, PRICING PLANS AND EXCLUSIVE HANDSET
              OFFERINGS

           The U.S. wireless industry is vibrantly competitive, as carriers must keep

customers happy and satisfied by offering the best and lowest prices while staying at the

forefront of innovation. Today’s wireless consumers have a multitude of facilities- and

non-facilities-based carriers to choose from, with each provider offering a broad selection

calling plans, service options and unique handsets. In the exceedingly competitive

wireless industry, players must act and react with the latest and greatest data offerings,

the must-have handsets and more minutes for less cost.




38
 See generally, Thomas Winter Aabo, US Mobile Virtual Network Operators 2007, Telecome
LLC (Mar. 2007).
39
  See CNET’s Quick Guide to MVNO Carriers, Nationwide MVNOs, available at
http://reviews.cnet.com/4520-3504_7-6780359-3.html?tag=lnav.
40
 See John C. Hodulik, Batya Levi, Gaurav Jaitly, and Lisa L. Friedman, “US Wireless 411,
Version 27.0,” UBS Global Equity Research, at 4, Table 1 (Mar. 18, 2008).

                                               16
           A.      Pricing Plan Innovations

       Competition has motivated carriers to develop a variety of calling plans to satisfy

all levels of subscriber usage, including friends and family plans, free long distance plans,

national and local plans and even unlimited calling and data services. Since the release of

the Twelfth Report, all four national carriers have launched unlimited, flat-rate calling

plans. This all-you-can-eat pricing innovation has been deemed the next revolutionary

tool after the Digital One Rate plan that was introduced in the 1990s. 41 Each of the

carriers offers unlimited voice services for calls to anyone in the U.S. at any time of the

day for the flat price of $99.99. 42 Showing their competitive spirit, T-Mobile’s

Individual Unlimited plan includes text messaging; while Sprint’s Simply EverythingSM

plan goes one step further offering text, picture and video messaging and GPS navigation

services. 43 Regional providers, such as Cellular South, Leap’s Cricket Wireless, and

MetroPCS, also offer unlimited calling for their customers. 44 For heavy data users within

Cricket’s footprint, the service provider is offering unlimited EVDO Rev. 0 data for only




41
  See Joe Brancatelli, Phone Home with All-You-Can-Eat Mobile Service, MSNBC.com (Mar. 6,
2008).
42
  See Finally, a Plan with Truly Unlimited Calling, available at
http://estore.vzwshop.com/unlimited/; AT&T Talk Unlimited, available at
http://www.wireless.att.com/cell-phone-service/cell-phone-plan-
details/?q_sku=sku1210020&q_planCategory=cat1370011.
43
  See http://www.t-mobile.com/shop/plans/detail.aspx?tp=tb1&id=dabdf217-d1f3-44ce-a5d2-
322198f7a692 and http://www.sprintspecialoffers.com/everything/.
44
  See Reuters, Other Wireless Carriers Follow Cellular South’s Lead on Unlimited Calling Plans,
at http://www.reuters.com/article/pressRelease/idUS164353+20-Feb-2008+PRN20080220 (Feb.
20, 2008); Business Wire.com, Leap’s Cricket Service Now Offers Free, Unlimited Messaging in
All Plans, available at
http://www.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=200
70403005453&newsLang=en (Apr. 3, 2007); Cricket Plans, available at
http://www.mycricket.com/cricketplans/; Cellular Plans from MetroPCS, available at
http://www.metropcs.com/ZipCode.

                                              17
$35 per month. 45 These unlimited voice and data plans can be particularly attractive to

consumers looking to reduce expenses by eliminating their traditional home phone

service.

           B.      Handset Innovations & Competition

       U.S. consumers have an abundance of choice in the wireless handset market. The

variety and sheer number of handsets available to consumers in the U.S. puts the lie to the

false claims regarding the lack of competition, consumer choice and features available to

wireless consumers. Competition is robust among the more than 35 handset

manufacturers that design devices to include the latest technological capabilities while

remaining aesthetically appealing. 46 This intense level of competition has produced a

multitude of features – such as digital cameras, GPS-enabled handsets, personal health

features and touch screen devices − as well as a range of “form factors.”

       The fact that there are more than 620 unique wireless devices for sale in the U.S.

is nothing short of amazing. Although this number of devices itself is impressive, the

variety of offerings shows the true breadth and scope of the wireless handset marketplace.

American consumers can choose from a variety of devices ranging from simple, voice-

only handsets like those offered by Jitterbug, Firefly and others, to multi-function devices

like those offered by Apple, RIM, LG and others, and everything in between.




45
  See engadget immobile, Cricket Wireless Offers Unlimited Data for $35 a Month, Look Ma,
No Cap, available at http://www.engadgetmobile.com/2008/03/23/cricket-wireless-offers-
unlimited-data-for-35-a-month-look-ma/ (Mar. 23, 2008).
46
  Manufacturers include Alcatel, Apple, Audiovox, Axxesstel, Bandrich, BenQ, Casio, Firefly,
HP, HTC, Huawei, Jitterbug, Kyocera, LG, Merlin, Motorola, Nokia, Novatel, Option GT, Palm,
Panasonic, Pantech, Research in Motion, Sagem, Samsung, Sanyo, Sharp, Siemens, Sierra
Wireless, SK Telecom, Sony Ericsson, Telular, UTStarcom, Waxess, and Withus; See e.g. Rob
Enderle, How to Beat iPhone and the Blackberry, RCR Wireless News (Mar. 24, 2008).

                                             18
       As handsets evolve into handheld computers, the services and capabilities

available wirelessly continue to gain in popularity. There is a plethora of handsets that

offer Internet access, including a growing number that have integrated Wi-Fi capability.

From surfing the net at Wi-Fi hotspots, to integrated Wi-Fi calling technologies, these

state-of-the-art handsets are bringing new services and ways to connect existing services

to U.S. consumers. Increasingly, more handsets are incorporating Bluetooth capability–

the short-range network service that connects wireless handsets to other wireless devices.

According to NPD Group, nearly three-quarters (72 percent) of handsets sold in the

fourth quarter of 2007 came with Bluetooth. 47 Smartphones, which incorporate PDA

capabilities and HTML browsers, are increasingly popular. By the end of 2007,

smartphones represented twelve percent of all handsets sold in the U.S.

      Smartphone Offerings of the Nationwide Wireless Carriers as of January 2008

                                   Verizon
                    AT&T                           Sprint Nextel   T-Mobile        Alltel
                                   Wireless

   Number of
 “Smartphones”        12              13                15           10              8
   Available



       Consumers have several avenues from which to purchase a handset, including

nationwide electronics super centers, independent retail outlets, manufacturer stores and

websites, online auction sites, as well as carrier retail stores and websites. 48 Consumers

have the option of purchasing discounted handsets from their carrier of choice, handsets

from other retail outlets, such as Best Buy who alone offers over 160 handset models –


47
  “Survey Sez: U.S. Handset Sales Topped $11B Last Year,” TelecomWeb, available at
http://www.telecomweb.com/tnd/259905.html (last accessed Feb. 19, 2008).
48
  See Handset Market is Extremely Robust, CTIA Written Ex Parte Communication, WT
Docket No. 08-274; RM-11361, at 5 (Mar. 20, 2008) (“Attachment C”).

                                              19
including unlocked devices. Consumers continue to choose deeply discounted handsets

from carriers is evidence of the competitive market at work. The carriers make the

handsets available at the retail stores and via the carriers’ websites and often provide

links to manufacturers’ websites enabling purchase directly from the manufacturer.

           While recent announcements by wireless providers to allow customers to bring

any compatible, non-harmful device to their networks 49 will certainly facilitate

introduction of new unlocked devices into the marketplace, unlocked handsets have been

available to consumers long before the new policies. For example, of the more than 620

wireless devices CTIA has identified, 54 unlocked handsets are currently available

through third-party and manufacturer websites. Verizon Wireless does not lock the

handsets of consumers in contracts. 50 AT&T unlocks phones when customers have

fulfilled their contract. 51 T-Mobile generally unlocks phones after a customer has held an

account for 90 days. 52 While carriers and manufacturers are making more unlocked

devices available, consumers generally do not keep their handsets long enough for it to


49
   See Press Release, Verizon Wireless, Verizon Wireless To Introduce “Any Apps, Any Device”
Option For Customers In 2008 (Nov. 27, 2007), available at
http://news.vzw.com/news/2007/11/pr2007-11-27.html (last accessed Nov. 30, 2007); see also,
Leslie Cauley, “AT&T flings cellphone network wide open,” USAToday.com, available at
http://www.usatoday.com/tech/wireless/phones/2007-12-05-att_N.htm (last accessed Feb. 15,
2008); Press Release, T-Mobile USA, Industry Leaders Announce Open Platform for Mobile
Devices (Nov. 5, 2007), available at http://www.t-
mobile.com/company/PressReleases_Article.aspx?assetName=Prs_Prs_20071105&title=Industry
%20Leaders%20Announce%20Open%20Platform%20for%20Mobile%20Devices (last accessed
Nov. 30, 2007); Press Release, Sprint Nextel Corporation, Sprint Joins Open Handset Alliance
(Nov. 5, 2007), available at http://newsreleases.sprint.com/phoenix.zhtml?c=127149&p=irol-
newsArticle_newsroom&ID=1072575&highlight=handset (last accessed Nov. 30, 2007).
50
  This policy is subject to approval by the handset manufacturer. See Mark Lowenstein,
Comparisons Between U.S. and European Markets for Wireless Services and Devices: Myth vs.
Reality, at 1 (March 2007).
51
     Id.
52
  See “Ask T-Mobile,” available at http://search.t-
mobile.com/inquiraapp/ui.jsp?ui_mode=question&question_box=unlock (last accessed Feb. 15,
2008).

                                             20
matter. According to J.D. Power and Associates, the average lifespan of a wireless

device is less than 18 months. 53 The dynamic nature of the wireless handset marketplace

characterized by the frequent rollout of affordable and attractive new devices and features

is the likely driver of handset churn. This in turn speeds the delivery of new and faster

services to consumers, by continually placing handsets optimized to work with the

constantly upgraded wireless networks into the hands of consumers.

           C.      Sources of Information

       With so many options to choose from, a multitude of resources are necessary to

help consumers determine their needs and weigh all the wireless options. Consumers

(and therefore the Commission) have access to a wealth of publicly available information

on carrier operations that both promote educated decision-making for consumers and

push wireless providers to stay at the frontline of innovation and reliability. At the carrier

retail stores and websites, consumers can perform personalized coverage checks, evaluate

and compare the myriad of pricing plans and handset options. Multiple independent

sources offer reviews and provide guidance on how to shop for a service provider and

choose a mobile phone. 54 With access to an unprecedented amount of information,

consumers can make informed decisions as to the carrier of choice, the adequate calling

plan and the all-in-one device to meet the consumer’s needs. Moreover, those who are

either unhappy with their carriers offerings or are intrigued by another carrier’s offerings

can, and do, switch carriers by porting their existing wireless number.




53
  Olga Kharif, A Quantum Leap for Cell Phones, BusinessWeek.com, available at
http://www.businessweek.com/technology/content/aug2006/tc20060821_810437.htm (last
accessed Feb. 15, 2008).
54
  See e.g. CNET and The New York Times, Cell Phones: CNET Editors’ Buying Guide,
available at http://cnet.nytimes.com/html/ex/nytimes/bg/7609/index.html.

                                             21
                                    CONCLUSION

       With multiple service providers serving the vast majority of Americans, the on-

going investment in and rollout of advanced wireless services, the continuing

introduction of innovative service options and enhanced mobile devices, declining prices,

and increasing usage by consumers, the wireless industry – and the wireless marketplace

– continues to deliver effective competition and competitive benefits to consumers.

Indeed, wireless competition provides tremendous benefits for consumers and the U.S.

economy. CTIA hopes that the information provided in these comments assists the

Commission in preparing its Thirteenth Annual CMRS Competition Report.



                                            Respectfully submitted,

                                            /s/ Marlo A. Go
                                            Staff Counsel

                                            Robert F. Roche, Ph.D.
                                            Vice President, Research

                                            Michael F. Altschul
                                            Senior Vice President and General Counsel

                                            Christopher Guttman-McCabe
                                            Vice President, Regulatory Affairs


                                            CTIA-THE WIRELESS ASSOCIATION®
                                            1400 Sixteenth Street, N.W.
                                            Suite 600
                                            Washington, D.C. 20036
                                            (202) 785-0081



Dated: March 26, 2008




                                           22
ATTACHMENT
     A
                                                  January 8, 2008

Electronic Filing

Ms. Marlene H. Dortch, Secretary
Federal Communications Commission
445 12th Street, SW
12th Street Lobby, TW-A325
Washington, D.C. 20554

            Re:       Written Ex Parte Communication
                      In re: Annual Report and Analysis of Competitive Market Conditions
                      With Respect to Commercial Mobile Service, WT Docket No. 07-71;
                      In re: CTIA Petition for Expedited Declaratory Ruling on Early
                      Termination Fees, WT Docket No. 05-194.

Dear Ms. Dortch:

        As the Commission begins the new year, CTIA-The Wireless Association®
(“CTIA”) takes this opportunity to update the Commission on the state of the global
wireless marketplace. CTIA is increasingly alarmed by the frequency of uninformed and
plainly inaccurate statements made by certain advocacy groups about the state of the
United States wireless market as compared with other countries. 1 Although CTIA is
confident that these uninformed and inaccurate statements will not form the basis for
Commission decision-making, in an abundance of caution, we provide the following
summary comparing the United States wireless market with the markets of the rest of the
Organisation for Economic Co-Operation and Development’s (“OECD’s”) top 10
countries ranked by Gross Domestic Product. 2 The United States leads every category
that we reviewed, except one, where the U.S. is second. Whether it is the low price
of service which results in a level of affordability that drives unprecedented minutes
of use, or the unbelievable breadth of choice, it is clear that American consumers
are enjoying the benefits of a vibrantly competitive wireless market that is second to
none.

        Utilizing the best publicly-available data, we compare six distinct statistics: (1)
number of subscribers; (2) average minutes of wireless use; (3) the amount of revenue
carriers derive from each minute of use; (4) the share of the market held by the two
largest carriers; (5) the number of facilities-based carriers in the market with more than
one million subscribers; and (6) the number of subscribers served per MHz of spectrum.
1
          See e.g., Open Internet Coalition Calls FCC Auction Rules Good News and Bad News for
Consumers, Press Release, July 31, 2007 (the Open Internet Coalition is comprised of, inter alia, Public
Knowledge, EDUCAUSE, Free Press, Media Access Project, and U.S. PIRG); see also Wireless Innovation
and Consumers Protection: Hearing Before the House Subcommittee on Telecommunications and the
Internet, 110th Cong. (2007) (statement of Chris Murray, Senior Counsel, Consumers Union).
2
          See Gross Domestic Product, Organisation for Economic Co-Operation and Development
available at http://www.oecd.org/dataoecd/48/4/37867909.pdf (last accessed Jan. 4, 2008).



    1400 16th Street, NW   Suite 600   Washington, DC 20036   Main 202.785.0081   Fax 202.785.0721   www.ctia.org
For comparison, we also provide the amount of spectrum allocated in each country for
commercial mobile use. For the Commission’s convenience, we have attached charts
providing head-to-head and summary comparisons referencing these data points.

        Subscribers: According to Merrill Lynch, the United States ranks first among
the top ten OECD countries in the number of wireless subscribers with 243 million as of
the second quarter of 2007. 3 That is more than twice the number in the next largest
market (Japan, 103 million) and more than 12 times the number of subscribers in the
smallest market (Canada, 19 million). CTIA estimates that the number of American
wireless subscribers now exceeds 250 million.

        Minutes of Use (“MOUs”): American consumers use – far and away – the most
minutes of use per month of any country, not just the OECD top ten. Americans use an
average of 823 minutes of wireless service per month. 4 That’s nearly five times the use
of the average wireless customer in an OECD top ten country and nearly twice as many
MOUs as consumers in any other country in the OECD top ten (Canada, 429 MOUs,
comes closest). Thanks to intense competition, as well as the minimal regulatory
environment of the United States, wireless carriers are free to market services in
increasingly large bundles and through more attractive and innovative service offerings.
This equation encourages American consumers to make wireless their primary method of
telecommunication, and creates a level of affordability that is the envy of consumers
outside the United States.

        Revenue Received by Carriers per Minute of Use: Competition in the United
States market produces a direct consumer benefit in the form of a much lower cost per
minute. As this statistic shows, American carriers receive the lowest revenue per minute
of use of all the OECD countries. On average, a U.S. wireless carrier derives just $0.04
of revenue for each minute used on its network. 5 By contrast, in other OECD countries,
carriers are paid up to six times as much for each minute of consumer use (Japan, $0.25
per minute), with the closest country being two-and-a-half times as much (Canada, $0.10
per minute).

        Top Two Carriers’ Share of the Wireless Market: Among OECD top ten
countries, only the United Kingdom can claim to have a smaller percentage of the
wireless market held by the top two carriers. In the United States, subscribers to the two
largest carriers (AT&T and Verizon Wireless) comprise just 51.7% of the total number of
subscribers. 6 With the exception of the U.S., the U.K. and Canada, the remaining OECD
top ten all have markets in which the top two carriers have more than 70% of the market.
France and Korea’s top two carriers have more than 80% of the market (82.5% and
82.4%, respectively) and Mexico’s top two carriers control 90.7% of the market. 7 When

3
         Glen Campbell, et al., “Global Wireless Matrix 2Q07,” Merrill Lynch, Oct. 4, 2007, at Table 1
(“Merrill Lynch”).
4
         Id.
5
         Merrill Lynch at Table 1.
6
         Id.
7
         Merrill Lynch at Table 1.


                                                    2
you look beyond just the first two carriers, the U.S. boasts a wireless market that is far
less concentrated than the rest of the OECD top ten.

        Specifically, the U.K.’s telecommunications regulator – Ofcom – notes in a 2006
report that the United States has a much less concentrated market when viewed through
the Herfindahl-Herschman Index, a commonly accepted measure of market
concentration. 8 This fact is illustrated when you move beyond the market share of the
first two carriers – in the United States, the six largest carriers combined have just over
90% of the market.

        Number of Facilities-Based Carriers with More than One Million
Subscribers: Americans value the ability to choose from a number of wireless carriers
and derive immense benefits from the intense competition between carriers. The United
States has 10 facilities-based carriers that serve more than 1 million subscribers. That is
double the number that any other country in the OECD top ten can claim, and triple the
number in some of the countries. That is not the end of the story. Throughout the United
States, there are numerous regional and local providers that offer service to consumers,
and that compete with other regional and national providers.

        Amount of Spectrum Allocated for Commercial Mobile Wireless: While the
United States leads the world in nearly every aspect of wireless service, spectrum
allocation is one area where our market is sorely lacking. In the United States, there is
294 MHz allocated for commercial wireless use – a number that includes the Advanced
Wireless Services and 700 MHz allocations. Of the OECD top ten markets, only our
neighbors to the north and south – Canada and Mexico – and South Korea have less
spectrum for commercial wireless use. Notably, all three countries serve a fraction of the
wireless subscribers that are in the U.S. market. As shown below, U.S. wireless carriers
have – out of necessity – become much more spectrally efficient in serving subscribers.
As wireless data services and applications become more prevalent, more spectrum will be
needed to provide the speeds and coverage that consumers increasingly demand.

        Subscribers Served per MHz of Spectrum: As described above, the United
States wireless market serves many more subscribers than those countries reviewed, and
more than nearly any country on the planet. As a result of the small amount of spectrum
allocated for commercial mobile use in the United States, domestic wireless carriers have
become more efficient users of the available spectrum. On average, nearly 828,000
American subscribers are served by each MHz of spectrum allocated for commercial use.
That estimate understates the United States wireless carriers level of efficiency because it
includes AWS and 700 MHz spectrum that is not yet operational. In the U.K., where
nearly 60 additional MHz of spectrum already is in the market, carriers are not nearly as
efficient, with only 202,000 subscribers served for each MHz. It is impressive that U.S.
wireless carriers are able to get so much more use out of the spectrum available.
However, as described above, as wireless subscribers demand more bandwidth and


8
         Ofcom, “The International Communications Market, 2006,” November 2006, available online at
http://www.ofcom.org.uk/research/cm/icmr06/icmr.pdf, at p.68 (last accessed Jan. 4, 2008).


                                                  3
increase use, the limited amount of spectrum allocated in the United States will continue
to be strained.

        While uninformed and inaccurate advocates may claim that the United States is
lagging behind other wireless markets, it is plainly clear from these statistics that
American consumers enjoy a wireless market that is second to none. Making more
happen with less spectrum, providing an affordable service that consumers of all
economic levels can enjoy, offering more choices and delivering more service to its
customers are the hallmarks of the United States wireless industry – and what makes it
the envy of wireless consumers worldwide. We are hopeful that the presentation of
this independent data will help to bring to an end the inaccurate statements being
made about the market in the United States.

       Pursuant to Section 1.1206 of the Commission’s rules, a copy of this letter and the
attachment are being filed via ECFS with your office. Should you have any questions,
please do not hesitate to contact the undersigned.

                                     Sincerely,

                                     /s/ Christopher Guttman-McCabe

                                     Christopher Guttman-McCabe
Attachment

cc:    Chairman Kevin Martin
       Commissioner Michael Copps
       Commissioner Jonathan Adelstein
       Commissioner Deborah Taylor Tate
       Commissioner Robert McDowell
       Aaron Goldberger
       Bruce Gottlieb
       Reneé Crittendon
       Wayne Leighton
       Angela Giancarlo
       Fred Campbell
       Dana Shaffer
       Julius Knapp




                                            4
ATTACHMENT
     B
                                            January 23, 2008

Electronic Filing

Ms. Marlene H. Dortch, Secretary
Federal Communications Commission
445 12th Street, SW
12th Street Lobby, TW-A325
Washington, DC 20554

         Re:       Ex Parte Communication; PS Docket No. 06-229; WT Docket Nos.
                   96-86, 05-194, 06-150, 06-169, 07-71

Dear Ms. Dortch:

        At a time when the United States’ economy is teetering on the brink of a
recession, the wireless industry continues to be a key driver of the economy, making
more than $14 billion in capital investments for the first three quarters of last year
(not including amounts paid to the federal treasury for spectrum licenses). With the
700 MHz auction scheduled to begin tomorrow, the wireless industry is poised to
continue these investments in 2008 and beyond, bringing new services to wireless
consumers, and benefits to the U.S. economy in general. As certain groups ask the
FCC to consider price or network regulation of the wireless industry, hopefully the
Commission will look at the consumer performance of those industries that are
regulated by agencies versus those – like the wireless industry – that are driven by
their customers and competition.

        This ex parte highlights some of what the U.S. wireless industry is delivering
to American wireless consumers and the American economy – lower prices, more
minutes of use, greater affordability, competition, extraordinary choice in carriers,
handsets and service plans, innovation, broadband access, job growth, capital
expenditures, buildout, and more. As these metrics demonstrate, consumers
recognize the value they get from their wireless service, and their increased usage of
wireless communications records their vote for the competitive model. We truly hope
that the Commission allows this success story to continue in 2008.

       This ex parte highlights the following major accomplishments of the U.S.
wireless industry:

    •    Consumers are paying less today than they did 10 years ago while enjoying
         almost seven times as many minutes of use per month;
    •    Wireless brings broadband to the person – more than 80 percent of handsets
         on wireless carriers’ networks can browse the web, including an increasing
         array of Wi-Fi-enabled handsets;
    •    98 percent of Americans have a choice of three or more wireless carriers, and
         94 percent have a choice of four or more carriers;


 1400 16th Street, NW   Suite 600   Washington, DC 20036   Main 202.785.0081   Fax 202.785.0721   www.ctia.org
Marlene H. Dortch
January 23, 2008
Page 2 of 13

   •   The wireless industry’s six-month incremental capital expenditure in
       operational systems was $9.71 billion as of June 2007, resulting in a total
       cumulative capital expenditure in operational systems of more than $233
       billion (not including billions more paid to the federal treasury for their
       spectrum licenses);
   •   Wireless carriers reported 12,784 more cell sites as of June 2007 compared to
       June 2006;
   •   U.S. wireless carriers directly employ over 257,000 people, with over 3.6
       million jobs directly or indirectly dependent on the U.S. wireless industry;
   •   More than 150 wireless companies provide service to more than 243 million
       customers in the U.S. as of June 2007;
   •   Americans generated 1.012 trillion minutes of use in the first six months of
       2007 (up from 857 billion minutes in the first six months of 2006);
   •   15 percent of wireless customers in the U.S. use prepaid or pay-as-you-go
       plans, without signing contracts;
   •   13.6 percent of American households are now wireless-only; and
   •   Wireless providers have deployed high-speed networks reaching more than
       210 million people and that expansion continues.
Marlene H. Dortch
January 23, 2008
Page 3 of 13


       U.S. Wireless Subscribership & Usage: American consumers’ attraction to
and use of wireless devices grew stronger in 2007. As service quality and coverage
have increased and innovation has continued to produce an amazing selection of
wireless devices, American consumers across all incomes and demographics are
subscribing to and relying on wireless service.
   •   Subscribership: More than 150 wireless companies provide service to more
       than 243 million customers in the U.S. as of June 2007, a figure that grew by
       almost 24 million subscribers from just one year earlier. Using these figures,
       wireless penetration now stands at 80 percent of the U.S. population,
       representing an increase from 73 percent as of mid-year 2006. While this
       level of growth is impressive, CTIA currently estimates that wireless
       subscribership exceeds 253 million.


                                                     Subscribership Growth Reflects Wireless’ Value


         300,000,000




                                                                                                                                                                                                                                                                                                             243,428,202
                                                                                                                                                                                                                                                                                               219,652,457
         250,000,000




                                                                                                                                                                                                                                                                                 194,479,364
                                                                                                                                                                                                                                                                   169,467,393
         200,000,000

                                                                                                                                                                                                                                                     148,065,824
                                                                                                                                                                                                                                       134,561,370
                                                                                                                                                                                                                         118,397,734




         150,000,000
                                                                                                                                                                                                            97,035,925
                                                                                                                                                                                               76,284,753
                                                                                                                                                                                  60,831,431




         100,000,000
                                                                                                                                                                     48,705,553
                                                                                                                                                        38,195,466
                                                                                                                                           28,154,414
                                                                                                                              19,283,306
                                                                                                                 13,067,318




          50,000,000
                                                                                                     8,892,535
                                                                                         6,380,053
                                                                             4,368,686
                                                                 2,691,793
                                                     1,608,697
                                 500,000

                                           883,778
                       203,600




                  0
                       Jun-85

                                 Jun-86

                                           Jun-87

                                                     Jun-88

                                                                 Jun-89

                                                                             Jun-90

                                                                                         Jun-91

                                                                                                     Jun-92

                                                                                                                 Jun-93

                                                                                                                              Jun-94

                                                                                                                                           Jun-95

                                                                                                                                                        Jun-96

                                                                                                                                                                     Jun-97

                                                                                                                                                                                  Jun-98

                                                                                                                                                                                               Jun-99

                                                                                                                                                                                                            Jun-00

                                                                                                                                                                                                                         Jun-01

                                                                                                                                                                                                                                       Jun-02

                                                                                                                                                                                                                                                     Jun-03

                                                                                                                                                                                                                                                                   Jun-04

                                                                                                                                                                                                                                                                                 Jun-05

                                                                                                                                                                                                                                                                                               Jun-06

                                                                                                                                                                                                                                                                                                             Jun-07




       Source: CTIA
Marlene H. Dortch
January 23, 2008
Page 4 of 13



    •      Wireless-Only Households: As wireless penetration continues to spread, more
           and more American households are becoming wireless-only. In fact, as of
           June 2007, wireless-only households stood at 13.6 percent – a figure that
           continues to rise.

                    o According to Morgan Stanley, wireless substitution is accelerating and
                      could reach almost one-third of households by 2012: “This
                      phenomenon is driven by improved wireless coverage and better
                      pricing and will be supported by new handsets and new wireless
                      technologies.” 1

                                               Wireless-Only Household Numbers Continue to Climb
        16.0%


        14.0%                                                                                                                         13.6%
                                                                                                                        12.8%

        12.0%
                                                                                                          10.5%

        10.0%
                                                                                                8.4%
        8.0%                                                            7.3%

                                                 6.1%
        6.0%
                          5.0%

        4.0%


        2.0%


        0.0%
                      Jan - June             July - Dec.            Jan - June             July - Dec.   Jan - June   July - Dec.   Jan - June
                        2004                    2004                  2005                    2005         2006          2006         2007
     Source: NCHS “Wireless Substitution: Early Release of Estimates from the National Health
     Interview Survey, Jan. – July 2007, released Dec. 10, 2007
                                                                                                                      Wireless-Only Households




1
 See Simon Flannery, et al., Cutting the Cord: Wireless Substitution Accelerating, Morgan Stanley
Telecom Services (Sept. 27, 2007).
Marlene H. Dortch
January 23, 2008
Page 5 of 13



   •   Price + Value = Increased Usage: A key factor in American consumers’
       affinity for wireless communications is their ability to get more for less. Ever
       the sophisticated consumers, Americans recognize the great value and
       flexibility of wireless. This is demonstrated by the fact that subscribers are
       talking more – and increasingly using data – while their monthly bills are
       dropping.

             o The average revenue per consumer, an indicator of what consumers
               pay in their monthly bills, is below the 1997 level, while minutes of
               use increased by a factor of seven – i.e., seven times more minutes of
               use for a lower price.
             o Americans generated 1.012 trillion billable minutes in the first six
               months of 2007 (up from 857 billion minutes in the first six months of
               2006):

                             Reported Wireless Minutes of Use Exceed 1 Trillion in First Half of 2007
               1,200,000,000,000




               1,000,000,000,000




                 800,000,000,000




                 600,000,000,000




                 400,000,000,000




                 200,000,000,000




                              0
                                   Jun-91



                                            Jun-92



                                                     Jun-93



                                                              Jun-94



                                                                       Jun-95



                                                                                Jun-96



                                                                                         Jun-97



                                                                                                  Jun-98



                                                                                                           Jun-99


                                                                                                                    Jun-00



                                                                                                                             Jun-01



                                                                                                                                      Jun-02



                                                                                                                                               Jun-03



                                                                                                                                                        Jun-04



                                                                                                                                                                 Jun-05



                                                                                                                                                                          Jun-06



                                                                                                                                                                                   Jun-07




       Source: CTIA
Marlene H. Dortch
January 23, 2008
Page 6 of 13



                                o Meanwhile, wireless carriers saw an average of 746 monthly minutes
                                  of use (“MOUs”) per subscriber while total monthly average revenue
                                  per user (“ARPU”) has remained constant:

                                         ARPU has Remained Relatively Stable, While Usage Has Soared
                                                                                                                                                800


                                                                                                                                       746
                                                                                                                          723                   700
                                                                                                              689




                                                                                                                                                       Monthly Average Minutes of Use per Subscriber
                                                                                                                                                600


                                                                                                   559
  Total Monthly ARPU




                                                                                                                                                500

                                                                                      474

                                                                                                                                                400
                                                                            403



                                                                  320                                                                           300



                                                       228                                                                                      200

                                    $46.45              $48.95    $49.11    $50.00     $50.85       $52.31      $51.43                 $49.11
                         $50.25                                                                                            $48.77
                                             $47.02

                        110        122                                                                                                          100
                                             174


                                                                                                                                                0
                       Jun-97     Jun-98     Jun-99   Jun-00     Jun-01    Jun-02    Jun-03      Jun-04      Jun-05      Jun-06       Jun-07

  Source: CTIA Wireless Industry Indices Report, Nov. 2007                                      Total Average MOUs                Total Monthly ARPU
Marlene H. Dortch
January 23, 2008
Page 7 of 13



Competition and Choice: The most likely driver of so many Americans flocking to
wireless is the fierce competition and vast array of choices that marks the U.S.
wireless industry – choice of carriers and choice of handsets. There is no
contradicting the record on wireless competition: the U.S. wireless industry has
delivered more choice for more people. Consider the following:

            •   98 percent of Americans have a choice of three or more wireless
                carriers;
            •   94 percent have a choice of four or more; and
            •   51 percent have a choice of five or more wireless carriers.




        Further underscoring the competition and choice that characterizes this
industry is the fact that more than 150 wireless companies are serving American
consumers. Consumers can choose among multiple national and regional carriers.
One need only turn on the television to see carriers touting advertisements that reveal
the intense competition for subscribers. Yet, unlike many other countries that can
claim only one or two carriers dominating market share for subscribers, the U.S.
market boasts broad competition typified by less concentration. 2 As of the 3rd quarter
of 2007, the five largest U.S. carriers claimed a combined 89 percent market share, as
follows:



2
  See CTIA Written Ex Parte Communication, WT Docket Nos. 07-71 and 05-194 (dated Jan. 8,
2008), available at http://files.ctia.org/pdf/filings/080108_US-OECD_10_Comparison_Ex_Parte.pdf.
Marlene H. Dortch
January 23, 2008
Page 8 of 13

           •   AT&T Mobility – 65.27 million (26 percent)
           •   Verizon Wireless – 63.65 million (25 percent)
           •   Sprint - Nextel – 53.05 million (22 percent)
           •   T-Mobile USA – 27.67 million (11 percent)
           •   Alltel – 12.45 million (5 percent)

   •   Collectively, there are about 700 handsets available to consumers in the U.S.,
       compared to less than 200 based on CTIA’s review of the market in the
       United Kingdom. These handsets range from simple, streamlined models like
       the Jitterbug (aimed at consumers who want simple handsets for voice
       calling), to feature-rich devices like smartphones and other multimedia
       devices from manufacturers including Apple, LG, Motorola, Nokia, RIM,
       Samsung and Sony Ericsson.

   •   15 percent of wireless customers in the U.S. use prepaid or pay-as-you-go
       plans, without signing contracts. They use service offered by licensees like
       Alltel, AT&T Mobility, Leap Wireless, MetroPCS, Sprint Nextel, T-Mobile
       USA, Verizon Wireless and others, as well as by “Mobile Virtual Network
       Operators” or MVNOs such as NET10, TracFone and Virgin Mobile.
Marlene H. Dortch
January 23, 2008
Page 9 of 13



        Broadband: Wireless providers are constantly expanding and upgrading
their networks to bring broadband to the person – not just the home.

   •   Over the past several years carriers have deployed high-speed networks to
       reach more than 210 million people. These broadband technologies
       (including EVDO Rev. A and HSPA) offer average download speeds between
       400-600 kbps (or more), and bursting speeds up to 1.6 Mbps. More
       high-speed facilities are being deployed every day.
   •   More than 80 percent of the handsets operating on wireless carriers’ networks
       are capable of browsing the web. Each of the top five wireless providers in
       the U.S. offers Wi-Fi enabled handsets.
Marlene H. Dortch
January 23, 2008
Page 10 of 13



        Capital Investment: The astounding growth and improved service quality in
the U.S. wireless industry could not be possible without substantial investment in
innovative technology and infrastructure. Wireless providers’ strong commitment to
capital investment has enabled them to nimbly respond to demand for greater network
coverage and upgrades.

   •    As of June 2007, the wireless industry’s six-month incremental capital
        expenditure in operational systems was $9.71 billion, resulting in a total
        cumulative capital expenditure in operational systems of more than $233
        billion (not including billions more paid to the federal treasury for their
        spectrum licenses).

   •    Wireless carriers reported 12,784 more cell sites as of June 2007 compared to
        June 2006, now totaling over 210,000. Further, wireless carriers are
        increasingly sharing facilities for cell sites and deploying stealth towers to
        minimize environmental impacts.

                                                       Cell Sites – More Sites, More Coverage

                                                                                                                                                                                                                                              210,360

                                                                                                                                                                                                                                   197,576
        200,000
                                                                                                                                                                                                                     178,025
                                                                                                                                                                                                               174,368
        175,000


                                                                                                                                                                                                    147,719
        150,000

                                                                                                                                                                                         131,350

        125,000
                                                                                                                                                                              114,059


        100,000                                                                                                                                                    95,733


                                                                                                                                                        74,157
         75,000
                                                                                                                                             57,674

         50,000
                                                                                                                                  38,650

                                                                                                            24,802
         25,000                                                                                       19,844
                                                                                                14,740
                                                                                    8,901 11,551
                                         3,577 4,768 6,685
                   599 1,194 1,732 2,789
             0
                   Jun-85

                            Jun-86

                                     Jun-87

                                              Jun-88

                                                        Jun-89

                                                                  Jun-90

                                                                           Jun-91

                                                                                     Jun-92

                                                                                              Jun-93

                                                                                                       Jun-94

                                                                                                                Jun-95

                                                                                                                         Jun-96

                                                                                                                                    Jun-97

                                                                                                                                               Jun-98

                                                                                                                                                          Jun-99

                                                                                                                                                                     Jun-00

                                                                                                                                                                                Jun-01

                                                                                                                                                                                           Jun-02

                                                                                                                                                                                                      Jun-03

                                                                                                                                                                                                                 Jun-04

                                                                                                                                                                                                                          Jun-05

                                                                                                                                                                                                                                     Jun-06

                                                                                                                                                                                                                                                Jun-07




                                                                 Cell Sites in Service are Up 6.5 Percent Year-over-Year
    Source: CTIA
Marlene H. Dortch
January 23, 2008
Page 11 of 13



        Wireless Industry Job Growth: Wireless and wireless-related job growth
has remained strong and independent forecasts indicate that this growth will continue
to flourish.

       •       Wireless carriers directly employed 257,401 people as of June 2007 – a six
               percent increase since June 2006.

                         Direct Wireless Carrier Employment Grows 6 Percent Year-over-Year
                                 Direct Employment Exceeds 257,000 at Mid-Year 2007




                                                                                                                                                                                                                                        257,401
    270,000




                                                                                                                                                                                                                              238,236
                                                                                                                                                                                                                    225,162
    240,000




                                                                                                                                                                                                          212,186
                                                                                                                                                                                                187,169
                                                                                                                                                                                     186,956
    210,000




                                                                                                                                                                  186,317
                                                                                                                                                        159,645
    180,000




                                                                                                                                              141,929
    150,000
                                                                                                                                    113,111



    120,000
                                                                                                                           97,039
                                                                                                                  73,365




     90,000
                                                                                                         60,689
                                                                                                45,622




     60,000
                                                                                       36,501
                                                                              30,595
                                                                     25,545
                                                            18,973
                                                   13,719




     30,000
                                          9,154
                                 5,656
                        3,556
               1,697




           0
               Jun-85

                        Jun-86

                                 Jun-87

                                          Jun-88

                                                   Jun-89

                                                            Jun-90

                                                                     Jun-91

                                                                              Jun-92

                                                                                       Jun-93

                                                                                                Jun-94

                                                                                                         Jun-95

                                                                                                                  Jun-96

                                                                                                                           Jun-97

                                                                                                                                    Jun-98

                                                                                                                                              Jun-99

                                                                                                                                                        Jun-00

                                                                                                                                                                            Jun-01

                                                                                                                                                                                     Jun-02

                                                                                                                                                                                               Jun-03

                                                                                                                                                                                                          Jun-04

                                                                                                                                                                                                                    Jun-05

                                                                                                                                                                                                                              Jun-06

                                                                                                                                                                                                                                        Jun-07



       •       In addition, the wireless industry’s contribution to the overall economy is
               unmistakable: the industry generated $118 billion in revenues and contributed
               $92 billion to the U.S. Gross Domestic Product in 2004 (the most recent year
               available), while 3.6 million jobs are directly and indirectly dependent on the
               U.S. wireless industry. 3

                        o Ovum predicts that over the next 10 years, the U.S. wireless industry
                          will create an additional 2-3 million new jobs, adding a cumulative
                          additional $450 billion in GDP (an estimate based on the conservative
                          assumption that no new services are added beyond what are available
                          today). 4


3
    Source: Ovum / Indepen Report, Oct. 2005.
4
    Id.
Marlene H. Dortch
January 23, 2008
Page 12 of 13



       Wireless Complaints Are Low, While Resolution Rates Are High: As
wireless carriers continue to add subscribers and services, they have managed to keep
consumers largely satisfied.

   •   As of the Second Quarter 2007, the number of complaints and the complaint
       rates related to wireless carriers – i.e., those involving Contracts, Advertising,
       Billing & Rates, and Service Quality – were down from both the First Quarter
       2006 and First Quarter 2007. From the First Quarter 2006 to the Second
       Quarter 2007:
           o the number of Contract-related complaints fell 49 percent;
           o Advertising-related complaints fell 47 percent;
           o Billing & Rates-related complaints fell 16 percent; and
           o Service quality-related complaints fell 26 percent.
   •   These complaint rates are extremely low when examined per million
       subscribers: as of the Second Quarter 2007, the quarterly complaint rates per
       million customers were in the single digits. For three of the categories, the
       Commission received a total of two or less complaints per million subscribers
       per quarter.
           o 1 Contract – Early Termination-related complaint per million
              subscribers per quarter;
           o 1 Carrier Marketing & Advertising-related complaint per million
              subscribers per quarter;
           o 2 Service Quality-related complaints per million subscribers per
              quarter; and
           o 8 Billing & Rates-related complaints per million subscribers per
              quarter.
   •   At the same time, the resolution rate for wireless-related complaints has risen
       to 91.5% according to the Better Business Bureau, while total wireless
       subscribership has risen by more than 23 million.
Marlene H. Dortch
January 23, 2008
Page 13 of 13



        The data described above highlight the tremendous success of the U.S.
wireless industry and the benefits that inure directly to American consumers.
Wireless service providers and manufacturers have made great advances, thanks in
part to the FCC’s light regulatory touch. CTIA urges the Commission to consider the
strong record of accomplishment in the wireless industry and carefully weigh the
impact of any further regulations on the wireless market before taking any action.

       Pursuant to Section 1.1206 of the Commission’s rules, this letter is being filed
via ECFS with your office. Should you have any questions, please do not hesitate to
contact the undersigned.

                                             Sincerely,

                                             /s/ Christopher Guttman-McCabe

                                             Christopher Guttman-McCabe

cc:    Chairman Kevin Martin
       Commissioner Michael Copps
       Commissioner Jonathan Adelstein
       Commissioner Deborah Taylor Tate
       Commissioner Robert McDowell
       Aaron Goldberger
       Bruce Gottlieb
       Renee Crittendon
       Wayne Leighton
       Angela Giancarlo
       Fred Campbell
ATTACHMENT
     C
                                                   March 20, 2008

Electronic Filing

Ms. Marlene H. Dortch, Secretary
Federal Communications Commission
445 12th Street, SW
12th Street Lobby, TW-A325
Washington, D.C. 20554

         Re:       Written Ex Parte Communication, WT Docket No. 08-27; RM-11361


Dear Ms. Dortch:

       The handset market in the United States is extremely robust. Contrary to claims made in
various FCC proceedings and in the press, the number and variety of handsets available to
consumers in the U.S. is nothing short of amazing. In this context, it is troubling that the
wireless industry has endured a number of uninformed and untrue claims about the handset
market, of late. CTIA takes this opportunity to set the record straight. In this ex parte filing,
CTIA shows that:

         •    There are at least 35 companies designing and manufacturing handsets for the
              U.S. market.

         •    There are more than 620 unique wireless devices for sale to consumers in the
              United States.

         •    American consumers have their choice of a variety of handsets that offer access
              to the Internet, including a growing number of handsets that have integrated
              Wi-Fi capability – and more hotspots to use the capability than elsewhere in the
              world.

         •    There are at least 16 Wi-Fi enabled handsets available in the U.S., and the
              number is growing.

         •    Consumers can purchase handsets from a number of sources, including large
              nationwide electronics stores, independent retail stores, manufacturer stores and
              websites, online auction sites, as well as carrier retail stores and web sites.

         •    The sales market for handsets continues to evolve – consumers can choose to buy
              subsidized or unsubsidized handsets.

         •    There are at least 50 handsets available to consumers that are unlocked.




 1400 16th Street, NW   Suite 600   Washington, DC 20036   Main 202.785.0081   Fax 202.785.0721   www.ctia.org
                               MANUFACTURERS

       U.S. consumers benefit greatly from the robust competition between wireless handset
manufacturers. There are more than 35 different handset manufacturers that compete on
technological capabilities of the handsets as well as aesthetic appeal.
       Alcatel                                         Option GT
       Apple                                           Palm
       Audiovox                                        Panasonic
       Axxesstel                                       Pantech
       Bandrich                                        Research in Motion
       BenQ                                            Sagem
       Casio                                           Samsung
       Firefly                                         Sanyo
       HP                                              Sharp
       HTC                                             Siemens
       Huawei                                          Sierra Wireless
       Jitterbug                                       SK Telecom
       Kyocera                                         Sony Ericsson
       LG                                              Telular
       Merlin                                          UTStarcom
       Motorola                                        Waxess
       Nokia                                           Withus
       Novatel


This intense level of competition provides a multitude of features – such as digital cameras,
GPS-enabled handsets, personal health features and touch screen devices – as well as a range of
“form factors.”




                                               2
                                  HANDSET OFFERINGS

        According to CTIA research, American consumers have their choice of over 620
different handsets as of January 2008. 1 The several hundred pages of attached Internet screen
shots detail the majority of the handsets available for purchase. 2 This vast array of choices is a
far cry from the handful of choices that some have condemned the industry for offering.
Although the number of devices itself is impressive, the variety of offerings shows the true
breadth and scope of the wireless handset marketplace.

        •    Consumers have the opportunity to purchase handsets ranging from simple, voice-
             only devices like those offered by Jitterbug, Firefly and others, to multi-function
             devices like those offered by Apple, RIM, LG and others, and everything in between.

        •    Consumers also enjoy the benefits of devices at every price range – making wireless
             affordable for all Americans.

        •    Wi-Fi enabled handsets: U.S. consumers have their choice of 16 new Wi-Fi enabled
             devices from carriers, and a number of other devices on the secondary market. From
             surfing the Internet at Wi-Fi hotspots, to integrated Wi-Fi calling technologies, these
             innovative handsets are bringing new services and ways to connect existing services
             to U.S. consumers.

        •    Moreover, U.S. consumers have more access to Wi-Fi hotspots than consumers in
             other countries. According to the National Telecommunication and Information
             Administration, U.S. consumers have access to more than 66,000 hot spots – more
             than twice the number of any other country. 3

        •    Bluetooth enabled handsets: Bluetooth – the short-range networking service that
             connects wireless handsets to other wireless devices – is increasingly available in
             many handsets. According to NPD Group, nearly three-quarters (72 percent) of
             handsets sold in the fourth quarter of 2007 came with Bluetooth capabilities. 4

1
         From January 3rd through February 6th, 2008, CTIA reviewed almost 200 websites representing wireless
service providers in the United States (including both licensees and Mobile Virtual Network Operators), as well as
the websites of Phonescoop, third-party retailers such as Best Buy, CNET, Cellular Concepts, Lets Talk, Pure
Mobile, the Sharper Image, and 1-800 Mobile. From these websites, we identified approximately 682 currently
available wireless devices, including both wireless handsets and wireless aircards. Of these devices, more than 620
wireless devices appeared to be distinct products, based on distinguishing model numbers and appearance. In
arriving at this number, we treated handsets of differing technological flavors (CDMA versus GSM) as identical for
the purposes of the count, and we generally treated successive versions of such handsets as the RAZR and SLVR as
a single model. Thus, it is a conservative count of available handsets.
2
         See Attachment A.
3
         “Networked Nation: Broadband in America, 2007,” Nat’l Telecomm. & Information Admin., at Table 4,
available at http://www.ntia.doc.gov/reports/2008/NetworkedNationBroadbandinAmerica2007.pdf (last accessed
Feb. 21, 2008).
4
         “Survey Sez: U.S. Handset Sales Topped $11B Last Year,” TelecomWeb available at
http://www.telecomweb.com/tnd/259905.html (last accessed Feb. 19, 2008).


                                                         3
          •     Smartphones: Those handsets that incorporate PDA capabilities and HTML browsers
                are increasingly popular with U.S. consumers. As handsets continue to become more
                like handheld computers, the services and capabilities available wirelessly continue to
                gain in popularity. By the end of 2007, smartphones comprised 12 percent of all
                handsets sold in America. 5 Below is a snapshot of the availability of smartphones
                from the five largest U.S. carriers.

                   Smartphone Offerings of the Nationwide Wireless Carriers as of January 2008

                                        Verizon
                           AT&T                       Sprint Nextel     T-Mobile           Alltel
                                        Wireless

  Number of
“Smartphones”               12             13              15               10               8
  Available

Source: Carrier Websites




        As new and more advanced handsets become available, carriers continue to launch new
competitive products and services that utilize the technologies. Verizon Wireless, for example,
offers phones with its “branded” version of Qualcomm’s MediaFLO technology, VCast, to
provide customers with mobile video. 6 T-Mobile provides innovative Wi-Fi services, launching
its HotSpot@Home service that tightly integrates Wi-Fi enabled handsets, T-Mobile’s public
HotSpot service, and the ability to use any Wi-Fi hotspots that are open or for which the
consumer have an access key. 7 AT&T offers the iPhone, with its host of technological
developments integrating Internet access into a handheld device. 8 Sprint Nextel has announced
its next generation of wireless broadband access, Xohm, based on the WiMAX technological
platform. 9 Alltel and other carriers also offer distinct handsets and services, all in the interests of
competing to better serve customers. While these new and upcoming services bring consumers
great benefit, they rely not only on carrier network upgrades, but also on compliant handsets that
are capable of utilizing the services. This level of technological change is a constant in the
wireless industry, as is evidenced by products that carriers have announced but not yet begun to
provide commercially.




5
          Id.
6
          See “Verizon Wireless: VCast Video,” Verizonwireless.com available at
http://products.vzw.com/index.aspx?id=video (last accessed Feb. 21, 2008).
7
          See “HotSpot @Home by T-Mobile” at http://www.theonlyphoneyouneed.com (last accessed Feb. 21,
2008).
8
          See “iPhone Exclusively from AT&T and Apple,” at http://www.wireless.att.com/cell-phone-
service/specials/iPhoneCenter.html?WT.svl=calltoaction&source=IC9801001e0n1400&ContentId=900334 (last
accessed Feb. 21, 2008).
9
          See XOHM, at http://www.xohm.com (last accessed Feb. 21, 2008).


                                                       4
                                      HANDSET SALES

         Some consumer groups claim that carriers have forced their customers to purchase
handsets as part of their contracts, but the truth is that consumers have many avenues from which
to purchase a handset. Consumers can choose from carriers, electronics retailers, 10 manufacturer
retail stores, 11 online retailers, 12 and online auction sites, 13 including:

Retail Stores:                                       Internet Sites:
Best Buy                                             Amazon.com
Circuit City                                         Buy.com
CompUSA                                              Buy DVDs and More
Kmart                                                ByteAmerica.com
Office Depot                                         California Computer Center
Sears                                                Clickitcellular.com
Target                                               Dell.com
Wal-Mart                                             eBay
                                                     Gizmos2go.com
Manufacturer Retail Stores:                          J & R electronics
Apple Retail Stores                                  Let’s Talk
Nokia Retail Stores                                  Newegg.com
Research in Motion                                   Overstock.com
Sony Style Stores                                    PCConnection.com
                                                     PC Mall
Manufacturer Websites:                               Pure Mobile
http://www.nokiausa.com                              Tigerdirect.com
http://www.store.motorola.com                        Techforless.com
http://www.palm.com                                  Wirefly.com
http://www.apple.com
http://www.fireflymobile.com
http://www.shopping.hp.com
http://www.jitterbug.com
http://www.sonystyle.com


10
         See, e.g., Best Buy at www.bestbuy.com; CompUSA at www.compusa.com; Circuit City at
www.circuitcity.com.
11
         For example, the Apple iPhone is available from Apple retail stores throughout the U.S. and in countries
where the iPhone is currently available. See Apple.com at http://store.apple.com/1-800-MY-
APPLE/WebObjects/AppleStore.woa/wa/RSLID?nnmm=browse&mco=7397E5EF&node=home/shop_iphone/famil
y/iphone (last accessed Feb. 15, 2008); see also Nokia – Flagship Stores, Nokia.com, available at
http://www.nokiausa.com/A4411001 (last accessed Feb. 15, 2008); Sony Style, Sonystyle.com, available at
http://www.sonystyle.com/webapp/wcs/stores/servlet/CategoryDisplay?catalogId=10551&storeId=10151&langId=-
1&identifier=S_BrandShowcase_Retail_Locations (last accessed Feb. 15, 2008).
12
         See, e.g., Lets Talk at http://www.letstalk.com/condor/home.htm (last accessed Feb. 15, 2008); see also
Pure Mobile at http://www.puremobile.com/ (last accessed Feb. 15, 2008).
13
         See, e.g., eBay.com at http://cell-phones.ebay.com/_W0QQ_trksidZp3907Q2em21 (a simple listing of the
“Cell Phones” category on eBay showed more than 67,000 listings on Feb. 15, 2008).


                                                        5
        The attached catalog from Best Buy is an example of the range of non-carrier options that
consumers have. 14 For example, Best Buy alone offers over 160 handset models – including
unlocked handsets. To claim that consumers are forced to choose from a number of
carrier-offered phones ignores the fact that there are literally hundreds of handsets from which
consumers can choose. The fact that consumers in the United States continue to choose highly
subsidized handsets from carriers is an example of the competitive market at work, not evidence
of anticompetitive practices. In fact, while most wireless service providers list handsets for sale
via their own websites, some smaller wireless companies include links to manufacturers’
websites to assist consumers in their purchase of handsets or for purchase directly from the
manufacturer. Still others provide toll-free numbers and suggest consumers contact them for
phone model information.




14
       See Attachment B.


                                                 6
                              HANDSET PORTABILITY

        While recent announcements by wireless carriers to allow consumers to bring any
compatible, non-harmful device to their networks 15 will certainly facilitate the use of unlocked
devices, unlocked handsets have been available for consumer use since long before these new
policies. For example, of the more than 620 wireless devices CTIA has identified, 54 handsets
are offered on an unlocked basis by manufacturers or by third-party websites. Some carriers
have long held policies of unlocking subsidized handsets. Verizon Wireless does not lock the
handsets of consumers in contracts. 16 AT&T unlocks phones when a customer has fulfilled their
contract. 17 T-Mobile generally unlocks phones after a customer has held an account for 90
days. 18 Despite claims to the contrary, this is similar to the situation in most European markets.
European carriers do not unlock all handsets purchased from the carriers. Generally, the same
considerations that drive U.S. carrier unlocking decisions also drive European carriers, among
them whether the customers’ service is prepaid or post-paid, whether the customer has fulfilled
their initial contract and how long the consumer has been a subscriber of the carrier.
Additionally, just like in European markets, unlocked handsets are available to U.S. consumers
from a number of sources.

        While carriers and device manufacturers are making this ability available to consumers,
consumers are generally not keeping their handsets long enough for it to matter. According to
J.D. Power and Associates, the average lifespan of a wireless device is less than 18 months. 19
This can largely be attributed to the dynamic nature of the wireless handset marketplace, as new
devices and features are constantly being introduced. Smartphones, for example, have shown the
largest growth in the U.S. market. According to Merrill Lynch, the percentage of smartphones in
the U.S. market has grown nearly 200% from year-end 2006 to year-end 2007. 20 This in turn
speeds the delivery of new and faster services to consumers, by more quickly placing handsets
optimized to work with the continually upgraded wireless networks into the hands of consumers.



15
         See Press Release, Verizon Wireless, Verizon Wireless To Introduce “Any Apps, Any Device” Option For
Customers In 2008 (Nov. 27, 2007) available at http://news.vzw.com/news/2007/11/pr2007-11-27.html (last
accessed Nov. 30, 2007); see also Leslie Cauley, “AT&T flings cellphone network wide open,” USAToday.com,
available at http://www.usatoday.com/tech/wireless/phones/2007-12-05-att_N.htm (last accessed Feb. 15, 2008);
Press Release, T-Mobile USA, Industry Leaders Announce Open Platform for Mobile Devices (Nov. 5, 2007)
available at http://www.t-
mobile.com/company/PressReleases_Article.aspx?assetName=Prs_Prs_20071105&title=Industry%20Leaders%20A
nnounce%20Open%20Platform%20for%20Mobile%20Devices (last accessed Nov. 30, 2007); Press Release, Sprint
Nextel Corporation, Sprint Joins Open Handset Alliance (Nov. 5, 2007) available at
http://newsreleases.sprint.com/phoenix.zhtml?c=127149&p=irol-
newsArticle_newsroom&ID=1072575&highlight=handset (last accessed Nov. 30, 2007).
16
         This policy is subject to approval by the handset manufacturer. See Mark Lowenstein, Comparisons
Between U.S. and European Markets for Wireless Services and Devices: Myth vs. Reality, at 1 (March 2007).
17
         Id.
18
         See “Ask T-Mobile” at http://search.t-
mobile.com/inquiraapp/ui.jsp?ui_mode=question&question_box=unlock (last accessed Feb. 15, 2008).
19
         Olga Kharif, “A Quantum Leap for Cell Phones,” BusinessWeek.com available at
http://www.businessweek.com/technology/content/aug2006/tc20060821_810437.htm (last accesed Feb. 15, 2008).
20
         Vivek Arya, et al., “Smartphone run has just begun,” Merrill Lynch (Feb. 8, 2008).


                                                      7
                                    SUMMARY

       U.S. consumers have an abundance of choice in the wireless handset market. Consumers
can purchase handsets from carriers, manufacturers, retail stores, websites and online auctions.
They have their choice of more than 620 wireless handsets, manufactured by one of 35
companies designing and building wireless devices for the U.S. market. The wide variety of
handsets available includes smartphones, Wi-Fi enabled devices, Bluetooth-enabled devices,
unlocked devices and devices with other new and innovative features. To describe this market as
anything other than robust and competitive would belie the incredible number of options
available to U.S. consumers.

       Pursuant to Section 1.1206 of the Commission’s rules, a copy of this letter and the
handset research done by CTIA are being filed via ECFS and hand delivery with your office.
Should you have any questions, please do not hesitate to contact the undersigned.

                                    Sincerely,

                                    /s/ Christopher Guttman-McCabe

                                    Christopher Guttman-McCabe

cc:    Chairman Kevin Martin
       Commissioner Michael Copps
       Commissioner Jonathan Adelstein
       Commissioner Deborah Taylor Tate
       Commissioner Robert McDowell
       Aaron Goldberger
       Bruce Gottlieb
       Renée Crittendon
       Wayne Leighton
       Angela Giancarlo
       Fred Campbell




                                                 8

				
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