**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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**ELEVENTH REPORT**

  ----------------------------------- -----------------------------------
  **Adopted: September 26, 2006**     **Released: September 29, 2006**

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By the Commission: Chairman Martin, Commissioners Tate and McDowell
issuing separate statements; Commissioner Copps concurring and issuing
a statement.

Table of Contents

Heading Paragraph \#

I. EXECUTIVE SUMMARY 1

II\. INTRODUCTION 6

A. Background 6

B. Sources of Information 9

C. Structure of Report 16

III\. MOBILE TELECOMMUNICATIONS MARKET STRUCTURE 19

A. Services and Product Market Definition 21

B. Overview of Service Providers 25

1\. Facilities-Based Mobile Telephone Providers 25

2\. Resale/MVNO Providers 27

3\. Data-Only Providers 29

4\. Satellite Providers 35

C. Horizontal Concentration 36

1\. Number of Mobile Telephone Competitors 38

2\. Concentration Measures for Mobile Telephone Services 42

3\. International Comparison of Mobile Market Concentration 48

D. Consolidation and Exit 53

1\. Sales and Swaps 56

2\. Affiliations 58

E. Entry Conditions and Potential Barriers to Entry 59

1\. Spectrum Allocation and Assignment 60

a\. Cellular, Broadband PCS, and SMR 61

b\. 800 MHz Band Reconfiguration and 1.9 GHz Spectrum Exchange 66

c\. Narrowband Spectrum 67

d\. 700 MHz Bands 69

e\. Advanced Wireless Services 73

f\. Broadband Radio Service 78

2\. Other Potential Barriers to Entry 83

F. Rural Markets 85

1\. Geographical Comparisons: Urban vs. Rural 85

2\. Rural Competition 86

3\. Conclusion 88

IV\. CARRIER CONDUCT IN THE MOBILE TELECOMMUNICATIONS MARKET 89

A. Price Rivalry 90

1\. Developments in Mobile Telephone Pricing Plans 90

2\. Prepaid Service 93

3\. Mobile Data Pricing 95

B. Non-Price Rivalry 101

1\. Technology Deployment and Upgrades 102

a\. Overview 102

b\. Background on Network Design and Technology 105

c\. Technology Choices and Upgrades of Mobile Telephone Carriers 109

d\. Coverage by Technology Type 115

e\. Data-Only Networks and Technology Deployment 118

2\. Capital Expenditures 124

3\. Roaming 125

4\. Advertising and Marketing 128

5\. Quality of Service 130

6\. Mobile Data Services and Applications 136

V. CONSUMER BEHAVIOR IN THE MOBILE TELECOMMUNICATIONS MARKET 141

A. Access to Information on Mobile Telecommunications Services 142

B. Consumer Ability to Switch Service Providers 144

1\. Churn 144

2\. Local Number Portability 146

VI\. MOBILE TELECOMMUNICATIONS MARKET PERFORMANCE 149

A. Pricing Levels and Trends 150

1\. Pricing Trends 150

2\. Average Revenue Per Unit 155

B. Quantity of Services Purchased 157

1\. Subscriber Growth 157

a\. Mobile Telephony 157

b\. Mobile Data 162

c\. Satellite 167

2\. Minutes of Use 168

3\. Mobile Data Usage 170

4\. Sub-National Penetration Rates 173

C. Quality of Service 175

D. International Comparisons 189

1\. Mobile Voice 189

2\. Mobile Data 196

VII\. INTERMODAL ISSUES 204

A. Wireless -- Wireline Competition 204

1\. Wireless Substitution 205

2\. Wireless Alternatives 208

B. Wireless Local Area Networks 210

VIII\. CONCLUSION 213

IX\. ProcedURAL MATTERS 217

APPENDIX A - Mobile Telephone Tables

APPENDIX B - Maps

APPENDIX C - List of PN Commenters

# EXECUTIVE SUMMARY

1.  This report reviews competitive market conditions with respect to
    commercial mobile radio services ("CMRS") using a framework that
    groups indicators of the status of competition into four
    categories: (1) market structure; (2) carrier conduct; (3) consumer
    behavior; and (4) market performance. The report also examines a
    number of related topics of interest to the Commission, including
    urban-rural and international comparisons, wireless-to-wireline
    competition, and Wireless Local Area Networks ("WLANs"). The report
    is retrospective, focusing on conditions prevailing in the CMRS
    marketplace as of the end of the 2005 calendar year and the first
    half of the 2006 calendar year.

2.  In this report the Commission concludes that there is effective
    competition in the CMRS marketplace. Among the indicators of market
    structure that support this conclusion, 98 percent of the total U.S.
    population lives in counties with access to three or more different
    operators offering mobile telephone service, slightly higher than in
    the previous year, and up from 88 percent in 2000, the first year
    for which these statistics were kept. The percentage of the U.S.
    population living in counties with access to four or more different
    mobile telephone operators is also slightly higher than in the
    previous year. In contrast, the U.S. population living in counties
    with access to five or more different mobile telephone operators has
    declined as compared with the previous year, due largely to the
    merger between Sprint PCS and Nextel in August 2005. This
    transaction, which followed the acquisition of AT&T Wireless by
    Cingular Wireless in October 2004, resulted in a drop in the number
    of nationwide competitors from five to four. Nevertheless, although
    the mobile telephone market has become more concentrated as a result
    of these mergers, none of the remaining competitors has a dominant
    share of the market, and the market continues to behave and perform
    in a competitive manner.

3.  With respect to carrier conduct, the record indicates that
    competitive pressure continues to drive carriers to introduce
    innovative pricing plans and service offerings, and to match the
    pricing and service innovations introduced by rival carriers. Price
    rivalry is evidenced by the introduction of "mobile to anyone"
    calling options, and by the proliferation of a variety of prepaid
    plans, or distinct prepaid brands (such as "Boost Mobile"), targeted
    at previously untapped segments of the market. The result has been a
    further increase in the percentage of wireless users who subscribe
    to prepaid plans in the past year, from 9.5 percent at the end of
    2004 to 11 percent at the end of 2005.[^1] In addition, the
    deployment of next-generation networks based on competing
    technological standards continues to be an important dimension of
    non-price rivalry in the U.S. mobile telecommunications market. In
    December 2005, Cingular Wireless commercially launched UMTS (or
    WCDMA) with HSDPA in 16 U.S. cities to compete with the EV-DO-based
    wireless broadband services previously launched by Verizon Wireless,
    Sprint Nextel, and some regional CDMA carriers such as Alltel.
    Because the speeds on EV-DO and WCDMA/HSDPA networks are much faster
    than the speeds on European WCDMA networks, it has been argued that
    the deployment of these next-generation technologies by U.S.
    wireless carriers has given the United States an edge over Europe in
    wireless data networks for the first time in years.[^2]

4.  Consumers continue to pressure carriers to compete on price and
    other terms and conditions of service by freely switching providers
    in response to differences in the cost and quality of service.
    Monthly churn rates averaged about 1.5 to 3.0 percent per month in
    the past year. In addition, the implementation of local number
    portability ("LNP") beginning in November 2003 has lowered consumer
    switching costs by enabling wireless subscribers to keep their phone
    numbers when changing wireless providers.

5.  Indicators of market performance show that competition between
    wireless carriers continues to yield significant benefits to
    consumers. In the 12 months ending December 2005, the United States
    mobile telephone sector increased subscribership from 184.7 million
    to 213 million, raising the nationwide penetration rate to
    approximately 71 percent of the population. Mobile subscribers
    continued to increase the amount of time they spend talking on their
    mobile phones, with average minutes of use per subscriber per month
    rising to 740 minutes in the second half of 2005 from 584 minutes in
    2004 and 507 minutes in 2003. Moreover, although U.S. mobile
    subscribers still prefer to use their mobile phones to talk rather
    than to send text messages (also called short messaging service, or
    "SMS"), the volume of SMS traffic grew to 48.7 billion messages in
    the second half of 2005, nearly double the 24.7 billion messages in
    the same period of 2004. Some customer surveys also indicate an
    improvement in the quality of mobile telephone service in the past
    year. For example, the J.D. Power and Associates 2006 Wireless Call
    Quality Study found that the overall rate of customers experiencing
    a wireless call quality problem declined for a second consecutive
    year, with reported problems per 100 calls reaching the lowest level
    since the inaugural study in 2003. Evidence on mobile pricing trends
    remains somewhat mixed, with two different indicators of mobile
    pricing -- revenue per minute and the cellular Consumer Price Index
    ("CPI") -- continuing to show a decline in the price of mobile
    telephone service, and a third indicator based on the consumption
    patterns of hypothetical users showing a slight increase in the cost
    of mobile service in 2005. Nevertheless, international comparisons
    indicate that mobile voice calls are still far less expensive on a
    per minute basis in the United States than in Western Europe and
    Japan.

# INTRODUCTION

## Background 

6.  In 1993, Congress created the statutory classification of Commercial
    Mobile Services[^3] to promote the consistent regulation of mobile
    radio services that are similar in nature.[^4] At the same time,
    Congress established the promotion of competition as a fundamental
    goal for CMRS policy formation and regulation. To measure progress
    toward this goal, Congress required the Federal Communications
    Commission ("FCC" or "Commission") to submit annual reports that
    analyze competitive conditions in the industry.[^5] This report is
    the eleventh of the Commission's annual reports[^6] on the state of
    CMRS competition.[^7]

7.  The statute requiring the annual report on CMRS competition states,

> The Commission shall review competitive market conditions with respect
> to commercial mobile services and shall include in its annual report
> an analysis of those conditions. Such analysis shall include an
> identification of the number of competitors in various commercial
> mobile services, an analysis of whether or not there is effective
> competition, an analysis of whether any of such competitors have a
> dominant share of the market for such services, and a statement of
> whether additional providers or classes of providers in those services
> would be likely to enhance competition.[^8]

8.  With the *Eleventh Report*, we continue to comply with each of the
    four statutory requirements for analyzing competitive market
    conditions with respect to commercial mobile services. As in
    previous reports, we base our analysis of competitive market
    conditions on a range of standard indicators commonly used for the
    assessment of effective competition. Beginning with the *Ninth
    Report*, we have reorganized the presentation of the various
    indicators to conform to a framework that groups such indicators
    into four distinct categories (A) Market Structure, (B) Carrier
    Conduct, (C) Consumer Behavior, and (D) Market Performance.[^9] This
    framework provides a systematic approach to addressing the four
    statutory requirements. For example, Section III on market structure
    identifies the number of competitors in various commercial mobile
    services, and it also uses subscriber market shares to measure
    concentration in mobile telephone markets. In addition, Section III
    tracks the entry of additional providers or classes of providers in
    commercial mobile services, and more generally provides an analysis
    of the conditions affecting the ability of additional providers or
    classes of providers to enter the market for commercial mobile
    services. The framework also clarifies that indicators of market
    structure such as the number of competitors and their market shares
    are not, by themselves, a sufficient basis for determining whether
    there is effective competition, and whether any of the competitors
    have a dominant share of the market for commercial mobile services.
    Rather, we make these determinations based on an analysis of both
    the structural and the behavioral characteristics of the CMRS
    marketplace.

## Sources of Information

9.  The Commission has expanded its efforts to improve the quality and
    granularity of the data used to examine competition in the CMRS
    industry. In January 2006, the Wireless Telecommunications Bureau
    ("Bureau") released a Public Notice ("Eleventh CMRS PN") seeking
    data and information on the status of competition in the CMRS
    industry.[^10] The Bureau requested data based on several metrics,
    including subscribership, penetration rates, market shares, usage,
    average revenue per unit ("ARPU"), pricing, quality of service, and
    service availability. In order to enhance our analysis of CMRS
    service availability and competition, the Bureau invited service
    providers to submit their coverage maps in an electronic, mappable
    format and to distinguish between the areas where they offer
    coverage to subscribers and the areas where they market service to
    new customers. Furthermore, the *Eleventh CMRS PN* asked for
    information on the deployment of next-generation network
    technologies, the competitive impact of resale providers, pricing
    and competition in rural markets, the effect of local number
    portability on consumer churn, and wireless-to-wireline competition.

10. Thirteen parties submitted comments or reply comments in response to
    the *Eleventh CMRS PN.*[^11] Some commenters stated that the CMRS
    marketplace remains competitive.[^12] One commenter asserted that
    competition in its rural service areas is strong, and that it
    competes with ten or more competitors in much of its service
    area.[^13] A few service providers submitted maps of their coverage
    area, but not in an electronic, mappable format.[^14] In general,
    commenters submitted little new data relating to the various metrics
    used to assess competitive market conditions with respect to CMRS.

11. Prior to the *Seventh Report*, the Commission based its analysis of
    competition in the CMRS industry solely on numerous
    publicly-available sources of data on the industry. These sources
    included: company filings with the Securities and Exchange
    Commission ("SEC"), data compiled and released by trade associations
    and by other government agencies, reports by securities analysts and
    other research companies and consultants, company news releases and
    web sites, newspaper and periodical articles, and the Commission's
    Universal Licensing System ("ULS") database. In the *Seventh*
    *Report*, the Commission added a new source of information: the
    Numbering Resource Utilization / Forecast ("NRUF") database,
    described below.[^15] Nevertheless, we continue to rely primarily on
    the aforementioned publicly-available sources and believe that they,
    when taken together, allow us to analyze the extent of competition
    in the industry on a nationwide basis. Because many of these
    publicly-available sources report national averages that reflect
    trends in the nation as a whole or in urban markets, they may
    provide limited insight into the extent of competition in particular
    geographic markets, including markets located in rural areas. The
    NRUF data have enabled us to conduct a more granular analysis of
    competition on a regional level and also to compare competitive
    conditions in urban and rural areas.

12. In order to further uphold the integrity of our data on CMRS
    competition, we include, in many places, multiple data sources to
    report on the same metric or depict the same trend. For example,
    this report and previous reports have included data from three
    separate sources -- the U.S. Department of Commerce Bureau of Labor
    Statistics ("BLS"); economic research and consulting firm, Econ One;
    and the CTIA - The Wireless Association ("CTIA") -- on the average
    price of mobile telephone service.[^16] In addition to using
    multiple sources for many metrics, we also emphasize that some of
    the sources upon which we rely, particularly SEC filings, are
    required by law to be accurate, and are scrutinized by independent
    third parties. The CTIA metrics used in the report are compiled and
    aggregated by an independent third party in a manner that protects
    carrier confidentiality, provides an incentive for carrier
    participation, and maintains the integrity of the results.[^17]
    Furthermore, other carrier-reported data included in the report,
    such as coverage maps, are subject to contractual obligations with
    customers. Because all carrier-reported data are compiled by the
    carriers themselves and typically released in the aggregate to
    protect confidentiality, we are unable to have in-depth knowledge of
    the details of such data. However, we believe it is appropriate to
    use these sources in our analysis of CMRS competition for the
    reasons stated above.

13. As mentioned above, the *Seventh Report* integrated a new source of
    data collected through an FCC order, the NRUF database.[^18] The
    NRUF data tracks phone number usage by all telecommunications
    carriers, including wireless carriers, in the United States. All
    mobile wireless carriers must report to the FCC the quantity of
    their phone numbers that have been assigned to end users, thereby
    permitting the Commission to make an accurate estimate of the total
    number of mobile subscribers. Consistent with our practice since the
    *Seventh Report*, we continue to use the NRUF data to determine the
    total number of mobile telephone subscribers and paging
    subscribers.[^19] In addition, because we collect NRUF data on a
    small, rate center area basis,[^20] we can use this information to
    estimate mobile telephone subscribership levels and penetration
    rates on a regional basis in addition to a national basis. In the
    *Seventh Report*, the Commission therefore began reporting mobile
    telephone penetration rates on an Economic Area ("EA")[^21] basis
    and continues to report them in this manner in this report.[^22]
    Finally, beginning with the *Ninth Report*, we have used NRUF data
    to measure market concentration on an EA basis.[^23] In particular,
    the subscriber market shares we use to calculate the
    Herfindahl-Hirschman Index ("HHI") for EAs are based on NRUF
    data.[^24] However, although we are using EAs to calculate both
    sub-national penetration levels and HHIs for the purposes of this
    report, this does not mean that we find the EA to be a relevant
    geographic market for other purposes.

14. One of the most important metrics that the Commission has tracked
    since 1995 is the number of facilities-based mobile telephone
    carriers providing service in a particular geographic area.[^25] To
    track service launches by broadband Personal Communications Services
    ("broadband PCS" or "PCS") and Specialized Mobile Radio ("SMR")
    operators, the Commission has analyzed publicly-available
    information released by the operators, such as news releases,
    filings with the SEC, coverage maps available on operators' Internet
    sites, and filings with the Commission. The Commission has based its
    analysis of cellular coverage on cellular licensees' service area
    boundary maps, which are filed with the Commission. The Commission
    began tracking service launches on a BTA-by-BTA[^26] basis in 1995,
    but switched to the more detailed, county-by-county basis in the
    *Fifth Report* in an effort to improve accuracy and significantly
    reduce the level of overcounting.[^27] It has derived from these
    data the number of competitors operating in every U.S. county and
    hence the percentage of the U.S. population living in areas with a
    certain number of competitors.[^28] These data have also been used
    to derive the percentage of the U.S. population living in counties
    with digital coverage. As mentioned in previous reports, there are
    several important caveats to note when considering the data. First,
    to be considered as "covering" a county, an operator need only be
    offering any service in a portion of that county. Second, multiple
    operators shown as covering the same county are not necessarily
    providing service to the same portion of that county. Third, the
    figures for POPs[^29] and land area in this analysis include all of
    the POPs and every square mile in a county considered to have
    coverage. Therefore, our analysis overstates to some unknown and
    unavoidable degree the total coverage in terms of both geographic
    areas and population covered. On the other hand, we believe our
    analysis to be the most accurate in the industry today given the
    coverage data that are publicly available.

15. Another more general limitation of the Commission's analysis of the
    number of facilities-based mobile telephone carriers providing
    service in a particular geographic area is that it does not account
    for differences in the market shares of mobile telephone carriers.
    As indicated above, however, the analysis of the number of mobile
    telephone carriers is supplemented with the measurement of
    concentration using HHIs calculated based on subscriber market
    shares for EAs. The value of HHI reflects both the number of market
    competitors and the distribution of their market shares.[^30]

## Structure of Report

16. As noted above, the structure of the *Eleventh Report* conforms to a
    framework that groups the indicators of competitive market
    conditions into four distinct categories (A) Market Structure; (B)
    Carrier Conduct; (C) Consumer Behavior; and (D) Market Performance.
    The section on market performance evaluates the outcomes of
    competitive conditions in the CMRS industry from the consumer's
    point of view, focusing on the benefits to consumers of competition
    such as lower prices, higher quality, greater variety, and more
    rapid innovation. In contrast, the sections on market structure,
    carrier conduct, and consumer behavior examine the various
    structural and behavioral determinants of such market outcomes.

17. In using this framework to analyze competitive market conditions
    with respect to commercial mobile radio services, we have integrated
    the discussion and analysis of mobile voice and mobile data services
    within each of the four categories of indicators. As stated in
    previous reports, mobile voice and mobile data services are no
    longer clearly delineated in the marketplace.[^31] Many mobile voice
    operators also offer mobile data services using the same spectrum,
    network facilities, and customer equipment. Furthermore, many U.S.
    mobile carriers have integrated the marketing of mobile voice and
    data services. For these reasons, we find it reasonable to analyze
    competitive conditions with respect to these services together.[^32]
    As in previous reports, we continue to identify, and to distinguish
    from such integrated mobile carriers, mobile data providers that
    offer only mobile data services, instead of both voice and data
    services, including those providers that offer such data-only
    services on networks distinct from those traditionally used to
    provide mobile voice. However, we analyze competitive conditions
    with respect to the services provided by integrated mobile carriers
    and data-only providers together, rather than treating mobile data
    services and data-only service providers in a separate section of
    the report.

18. As in previous reports, the *Eleventh Report* includes an analysis
    of wireless-to-wireline competition. However, since such
    "intermodal" competition is distinct from "intra-modal" competition
    among the various wireless carriers, we have placed our analysis of
    wireless-to-wireline competition in a separate section on intermodal
    issues (Section VII), following the sections on market structure,
    carrier conduct, consumer behavior and market performance within the
    CMRS industry. In addition to the analysis of wireless-to-wireline
    competition, Section VII also provides a brief discussion of
    Wireless Local Area Networks, or WLANs. Although both CMRS and WLAN
    services are wireless services, WLAN services are based on a
    different wireless technology and spectrum model than CMRS, and they
    have the potential to act as a substitute as well as a complement to
    data services offered over mobile telephone networks.

# MOBILE TELECOMMUNICATIONS MARKET STRUCTURE

19. The analysis in this section covers two distinct aspects of mobile
    telecommunications market structure. The first is the current level
    of horizontal concentration as reflected in the number of carriers
    competing in the various mobile service markets and their respective
    market shares. The second is the ease or difficulty of entry into
    the various mobile service markets, with particular emphasis on the
    way spectrum allocation and availability affect entry conditions and
    barriers to entry.

20. As background to the discussion of horizontal concentration and
    entry conditions, Sections III.A and III.B provide an overview of
    the various types of CMRS services and service providers. Following
    the analysis of the current level of horizontal concentration in
    Section III.C, Section III.D examines recent or impending
    transactions that affect, or have the potential to affect, the level
    of horizontal concentration. Section III.E examines entry
    conditions. The final section, III.F, addresses structural
    differences between rural and non-rural mobile telecommunications
    markets in the United States.

## Services and Product Market Definition

21. Since CMRS encompasses a variety of terrestrial and satellite
    services, an important initial step in analyzing the structure of
    the mobile telecommunications market is to define the relevant
    product market for each of these services. The basic economic
    principle for defining the scope of the relevant product market is
    to include two mobile services in the same product market if they
    are essentially interchangeable from the perspective of most
    consumers -- that is, if consumers view them as close substitutes.
    For the purposes of this report, relatively narrow product market
    definitions will be used, with a separate product market identified
    for each of the following services: interconnected mobile voice;
    interconnected mobile data; and mobile satellite service. However,
    the identification of separate markets for each service in the
    context of this report does not preclude the possibility that, in a
    different context, the Commission may find that two or more of these
    services belong in the same product market. The Commission may also
    find that certain types of mobile voice or data services (for
    example, nationwide calling plans, paging services) constitute a
    separate relevant product market, or that consumer demand for
    bundled packages of interconnected mobile voice and mobile data
    services make it appropriate to define one or more separate markets
    for bundled mobile services.

22. This report defines the mobile telephone sector to include all
    operators that offer commercially available, interconnected mobile
    voice services. These operators provide access to the public
    switched telephone network ("PSTN") via mobile communication devices
    employing radiowave technology to transmit calls. As discussed
    below, providers using cellular radiotelephone, broadband PCS, and
    SMR licenses account for most of this sector.[^33]

23. For purposes of this report, mobile data service is considered to be
    the delivery of non-voice information to a mobile device. This
    includes two-way mobile data services that involve not only the
    ability to receive non-voice information on an end-user device but
    to send it from an end-user device to another mobile or landline
    device using wireless technology. The mobile data services currently
    available include paging, text messaging, multimedia messaging
    services ("MMS") such as exchanging digital photos, information
    alerts, entertainment applications such as ringtones and games, web
    browsing, email, access to files stored on corporate servers, and
    wireless telemetry.[^34]

24. Any mobile satellite service ("MSS") that involves the provision of
    commercial mobile radio service directly to end users is by
    statutory definition CMRS.[^35] The Commission permits MSS providers
    in the 2 GHz MSS,[^36] Big LEO,[^37] and L-Band[^38] frequency bands
    to provide an ancillary terrestrial component ("ATC") to their
    satellite systems, provided that the MSS operator: (1) has launched
    and operates its own satellite facilities; (2) provides substantial
    satellite service to the public; (3) provides integrated ATC; (4)
    observes existing satellite geographic coverage requirements;
    and (5) limits ATC operations only to the authorized satellite
    footprint.[^39] The *Satellite Flexibility Order* noted that, since
    terrestrial CMRS and MSS ATC are expected to have different prices,
    coverage, product acceptance and distribution, the two services
    appear, at best, to be imperfect substitutes for one another that
    would be operating in predominately different market segments.[^40]
    The Commission has granted two applications to add ATC to MSS
    satellite offerings, to Mobile Satellite Ventures ("MSV") in the
    L-Band and to Globalstar in the Big LEO frequency bands.[^41]

## Overview of Service Providers

### Facilities-Based Mobile Telephone Providers

25. As of year-end 2005, there were four mobile telephone operators in
    the United States that analysts typically describe as "nationwide":
    Sprint Nextel Corp. ("Sprint Nextel"),[^42] Verizon Wireless, LLC
    ("Verizon Wireless"),[^43] T-Mobile,[^44] and Cingular Wireless, LLC
    ("Cingular Wireless" or "Cingular").[^45] When an operator is
    described as being nationwide, it does not necessarily mean that the
    operator's license areas, service areas, or pricing plans cover the
    entire land area of the United States. The four mobile telephone
    carriers that analyst reports typically describe as nationwide all
    offer facilities-based service in at least some portion of the
    western, midwestern, and eastern United States. In addition, each of
    the four national operators has networks covering at least 230
    million people, while the next largest provider covers less than 80
    million people.[^46] In addition to the nationwide operators, there
    are a number of large regional players, including Alltel Corp.
    ("Alltel"),[^47] United States Cellular Corp. ("US Cellular"), and
    Dobson Communications ("Dobson").

26. Because the four nationwide mobile telephone operators as well as
    the large regional and numerous other smaller operators have
    different geographic footprints, they do not all compete
    head-to-head in each and every region and locality of the country.
    To provide an accurate count of the number of competitors in the
    market for mobile telephone services in compliance with the
    statutory requirement, it is necessary as an initial step to define
    the scope of the geographic market more narrowly on a regional or
    local basis. For example, Section III.C.1 below identifies the
    number of mobile telephone competitors on a county-by-county basis.

### Resale/MVNO Providers 

27. Resellers purchase airtime from facilities-based providers and
    resell service to the public for profit.[^48] Resellers today are
    often referred to as MVNOs (Mobile Virtual Network Operators). One
    commenter argued that "resold wireless services can provide
    significant competition to traditional wireless services so long as
    the resold provider differentiates its services from those of the
    national carriers."[^49] Typically, MVNOs offer prepaid plans rather
    than standard monthly billing.[^50] According to information
    provided to the FCC in its ongoing local competition and broadband
    data gathering program, the resale sector accounted for
    approximately 6 percent of all mobile telephone subscribers at the
    end of June 2005.[^51] One analyst estimated that there were 13.4
    million wireless subscribers currently receiving service from a
    resale provider, nearly triple the 4.7 million customers at the end
    of 2003.[^52]

28. With the exception of TracFone Wireless Inc., which served more 6.1
    million customers with prepaid offerings at the end of 2005,[^53]
    there are few large, independent[^54] resellers of wireless service.
    However, resale competition has been growing.[^55] There are now
    more than two dozen MVNOs focusing on groups of individuals who lack
    traditional wireless service, such as people who are
    credit-challenged, teenagers, and those who want a cellphone for
    limited use.[^56] As one commenter argued, "MVNOs that develop and
    market unique service offerings targeted to niche demographics
    traditionally ignored by larger carriers have a proven track record
    of competitive success." [^57] Virgin Mobile USA ("Virgin Mobile"),
    a joint venture between Sprint Nextel and Richard Branson's Virgin
    Group, LLC, was launched in July 2002, targeting its prepaid
    offerings at the youth market.[^58] The venture now serves almost
    four million subscribers.[^59] Recently launched MVNOs include Amp'd
    Mobile (focusing on the youth/young adult market),[^60] Mobile ESPN
    (focusing on sports content),[^61] Talk and Go Mobile (sold by
    Circle K convenience stores), [^62] and Movida Cellular (targeting
    Hispanic consumers).[^63]

### Data-Only Providers 

29. In addition to the voice and data services offered by mobile
    telephone carriers, other providers, including those using BRS/EBS
    spectrum and paging/messaging carriers, offer or are preparing to
    offer a range of mobile broadband and narrowband data services.

30. As of June 2006, Clearwire was offering wireless broadband service
    in 29 small cities across the United States, up from 12 markets in
    August 2005, using BRS/EBS spectrum in the 2.5 GHz band.[^64]
    Clearwire's service provides consumers with wireless high-speed
    Internet access at downstream speeds ranging from 768 kbps to 1.5
    Mbps using a "plug-and-play" wireless modem device connected
    directly to a desktop or laptop computer.[^65] Customers can
    transport the devices to other locations within Clearwire's coverage
    area where a network signal is available and in some cases use them
    while traveling at high speeds.[^66] In April 2006, Clearwire also
    began offering voice over IP service to its broadband
    customers.[^67]

31. Sprint Nextel holds or leases a significant amount of spectrum in
    the BRS/EBS band and, in February 2006, the company began using this
    spectrum to offer a wireless broadband video service to NASCAR^TM^
    spectators called FanView. The FanView service delivers live race
    and audio from in-car cameras, as well as race statistics and replay
    functions, to spectators using customized mobile devices that can be
    rented at NASCAR^TM^ events.[^68] Over the past year, Sprint Nextel
    tested other wireless broadband technologies that could eventually
    be deployed in the BRS/EBS band,[^69] and in August 2006 Sprint
    Nextel announced its plans to deploy a fourth-generation ("4G")
    wireless broadband network in this band using the mobile WiMAX
    (Worldwide Interoperability for Microwave Access) IEEE 802.16e-2005
    technology standard.[^70] As one of the conditions of the August
    2005 merger of Sprint and Nextel, the Commission required Sprint
    Nextel to fulfill its voluntary commitment to provide service in the
    2.5 GHz band; the first milestone requires the company to offer
    service using BRS/EBS spectrum to at least 15 million Americans by
    August 2009 and to additional 15 million Americans by August
    2011.[^71]

32. In addition, several small wireless broadband providers use BRS/EBS
    spectrum licenses to offer wireless broadband services. These
    providers include, for example, Plateau Telecommunications in New
    Mexico and Texas; Info-Link.net in west central Minnesota; Evertek
    in Iowa; SpeedNet in Michigan; Gryphon Wireless in Kearny, NE;
    W.A.T.C.H. TV in Lima, OH; BeamSpeed in Yuma, AZ; and Rioplex
    Wireless in Port Isabel, TX.

33. BellSouth currently offers wireless broadband service in five
    southern cities -- Athens, GA; Palatka and Deland, FL; New Orleans,
    LA; and Gulfport, MS -- using its WCS spectrum licenses in the 2.3
    GHz band.[^72] The service is similar to those offered in the
    BRS/EBS band and allows portable, wireless high-speed Internet
    access via plug-and-play wireless modem devices.[^73]

34. There are several narrowband mobile data service providers that
    offer service to enterprise customers using paging and narrowband
    PCS networks and spectrum. USA Mobility is the largest U.S. paging
    company and offers both traditional paging services and two-way
    messaging services to enterprise customers.[^74] In addition,
    Motient Corp. ("Motient") sells wireless e-mail and other wireless
    Internet applications, and Space Data Corp ("Space Data") provides
    commercial telemetry services across the south-central United States
    to energy and other industrial companies.[^75]

### Satellite Providers

35. As of year-end 2005, a number of carriers were providing mobile
    satellite services in the United States.[^76] Both Globalstar
    Telecommunications LTD. ("Globalstar") and Iridium Satellite LLC.
    ("Iridium Satellite") are using Big LEO MSS licenses to offer mobile
    voice and data services to a variety of mobile terminals, including
    hand-held terminals, and to fixed terminals. Inmarsat Ltd.
    ("Inmarsat") and MSV were also providing voice and data
    communications via satellite in the L-band at year-end 2005. The
    companies offer voice and data services in fixed and mobile
    environments. The mobile environment consists of a laptop-sized or
    larger terminal that can be transported from one location to
    another. Two additional companies, ICO Global Communications
    (Holdings) Ltd. and TerreStar Networks, Inc., had not yet begun
    commercial service.

## Horizontal Concentration

36. The level of market concentration generally depends on both the
    number of competing carriers per market and the distribution of
    their respective market shares. Thus, market concentration can
    result from both a relatively small number of carriers competing in
    the relevant market and a relatively high degree of inequality in
    the distribution of market shares among incumbent carriers. In
    conjunction with entry conditions and the way carriers and consumers
    behave and interact, market concentration affects the likelihood
    that a single carrier unilaterally, or a small group of carriers
    through coordinated action, could successfully exercise market
    power.

37. The basic economic principle for defining the scope of the relevant
    geographic market is to include customers facing the choice of
    similar competitive alternatives in the same geographic market.
    Because U.S. mobile telephone carriers have different-sized
    geographic footprints, any individual mobile carrier does not
    compete with all other mobile carriers in each and every part of the
    country. This suggests that the relevant geographic market for
    mobile telephone services is narrower than the entire nation. An
    attempt to measure concentration in mobile telephone services at the
    national level would understate the actual level of market
    concentration because the underlying geographic market definition
    would be too broad. At the same time, defining the appropriate
    regional or local geographic market for mobile telephone services is
    a highly complex exercise due to various factors, including the
    relatively large number of licensed carriers, the variety of
    geographic schemes used to license different spectrum bands, the
    wide variation in carriers' geographic footprints, and the
    difficulty of collecting accurate information on the geographic
    coverage each mobile carrier provides in its license areas. To
    simplify the measurement task, we base our analysis of market
    concentration on uniform geographic areas that may be broader or
    narrower than the relevant geographic market. In particular, we
    estimate the number of competitors per market on a county-by-county
    basis, and we provide concentration measures at the level of EAs.

### Number of Mobile Telephone Competitors

38. To track the level of competition in the mobile telephone sector,
    the Commission compiles a list of counties with some level of
    coverage by mobile telephone providers. This data is based on
    publicly-available sources of information released by the operators
    such as news releases, filings with the SEC, coverage maps available
    on operators' Internet sites, and information filed publicly[^77]
    with the Commission in proceedings or with applications.[^78]

39. As previously discussed, there are several important caveats to note
    when considering these data. First, to be considered as covering a
    county, an operator need only be offering any service in a portion
    of that county. Second, multiple operators shown as covering the
    same county are not necessarily providing service to the same
    portion of that county. Consequently, some of the counties included
    in this analysis may have only a small amount of coverage from a
    particular provider. Third, the figures for POPs and land area in
    this analysis include all of the POPs and every square mile in a
    county considered to have coverage.[^79] Therefore, this analysis
    overstates the total coverage in terms of both geographic areas and
    populations covered.

40. On the other hand, this county-by-county analysis reflects a
    significant improvement in accuracy. In past *Reports*, the
    Commission provided summaries of estimated coverage by BTAs.
    Starting with the *Fifth Report*, the Commission decided to
    re-estimate and enhance these coverage maps using county boundaries
    in an attempt to provide a more precise picture of network
    deployment. Moreover, while the newer broadband PCS and digital SMR
    entrants have less complete networks, the original cellular
    licensees have extensive networks that provide almost complete
    coverage of the entire land mass of the continental United
    States.[^80] Cellular licensees were originally awarded a
    geographical area (CMA) as a license area, but they only retained
    that portion of the CMA where they had built out and expanded their
    wireless networks.[^81]

41. To date, 280 million people, or 98 percent of the total U.S.
    population, have three or more different operators (cellular, PCS,
    and/or digital SMR) offering mobile telephone service in the
    counties in which they live.[^82] However, these counties make up
    only 68 percent of the total land area of the United States,
    reflecting the nation's uneven population distribution.[^83] Roughly
    268 million people, or 94 percent of the U.S. population, live in
    counties with four or more mobile telephone operators competing to
    offer service. In addition, roughly 145 million people, or 51
    percent of the U.S. population, live in counties with five or more
    mobile telephone operators competing to offer service, while 50
    million people, or 18 percent of the population, live in counties
    with six or more mobile telephone operators competing to offer
    service. While the percentage of the U.S. population living in
    counties with three or more and four or more mobile telephone
    carriers is slightly higher since the *Tenth Report*, there has been
    a sharp drop in the percentage of the population living in counties
    with more than four providers,[^84] due to the mergers of Sprint and
    Nextel and, to a lesser extent, Alltel and Western Wireless
    Corporation.[^85]

### Concentration Measures for Mobile Telephone Services

42. This section reports the results of using the Herfindahl-Hirschman
    Index ("HHI") to measure market concentration with respect to the
    provision of mobile telephone services in EAs.[^86] The value of the
    HHI reflects both the number of market competitors and the
    distribution of their market shares. In general, the value of the
    HHI declines as the number of firms increases and it increases with
    rising inequality among any given number of firms.[^87]

43. In principle, the market shares used to calculate HHIs can be based
    on various output measures, such as revenues or the number of
    subscribers. For reasons of data availability we have elected to
    calculate each mobile carrier's market share based on the number of
    subscribers served by each carrier. The number of subscribers served
    by each carrier is determined based on the Commission's NRUF data,
    which track phone number usage information for the United
    States.[^88]

44. Finally, we use EAs as the geographic unit for measuring
    concentration in mobile telephone markets because an EA captures the
    area in which the average person shops for and purchases a mobile
    phone, most of the time.[^89] We emphasize that, in using the EA to
    calculate market shares for the purposes of this report, we are not
    concluding that the EA is the relevant geographic market for other
    purposes.[^90]

45. Based on NRUF data as of December 2005, the average value of the
    HHIs weighted by EA population is 2706, and the median value is
    about 2785.[^91] This represents an increase in average
    concentration from the weighted average value of 2450 and the median
    value of about 2583 estimated for December 2004.[^92] As a benchmark
    for comparison, the value of HHI for a hypothetical market in which
    there are four carriers with equal market shares is 2500. The value
    of HHI for individual EAs ranges from a low of 1605 in EA 28
    (covering parts of South Carolina and Georgia, including Savannah)
    to a high of 9042 in EA 120 (covering parts of Nebraska). The value
    of HHI in 49 EAs representing nearly nine percent of the U.S.
    population exceeds 3333, which would be the approximate value of HHI
    in a market that is equally divided among three competitors.
    However, there are four or more competitors in all but two of the
    EAs with HHIs in excess of 3333. This suggests that the relatively
    high HHI values in most of these EAs primarily reflect the limited
    effect of competitive entry to date in eroding the market shares of
    one or both carriers holding the two original cellular licenses,
    rather than simply a limited number of competitors.

46. In interpreting these HHIs, it is worth noting that the specific
    technological and economic characteristics of an industry are
    important determinants of the level of market concentration. Of
    particular importance is the relationship between economies of scale
    and the potential size of the market. In industries where the scale
    of output at which a firm can fully exploit scale economies (the
    minimum efficient scale) is large relative to potential demand,
    there will be room in the market for only a small number of firms
    operating at the lowest possible cost.

47. In light of the impact of technological and economic factors in
    determining the level of market concentration, it is noteworthy that
    the estimated values of HHIs for EAs tend to increase as the EA
    population declines. In other words, consistent with the theoretical
    considerations noted above, market concentration tends to be higher
    in EAs with a smaller potential subscriber base. For example, the
    least populated EA (EA 121, covering parts of Nebraska and Colorado)
    and the EA with the third lowest population (EA 142, coverings parts
    of Nebraska and Wyoming) have the second and third highest HHIs,
    respectively. However, apart from differences in population size,
    EAs also vary significantly with regard to other important
    determinants of market demand and cost, including factors such as
    per capita income, population density, urbanization, the age
    distribution of the population, and the size and composition of the
    business sector.[^93] Absent a more systematic analysis of the
    possible relationship between these factors and market
    concentration, we cannot make a determination of the extent to which
    market concentration in any given EA is explained by potential
    market demand and cost considerations.

### International Comparison of Mobile Market Concentration

48. Concentration in mobile markets abroad provides another benchmark
    against which to evaluate U.S. mobile market concentration. This
    section compares the structure of mobile telephone markets in the
    United States and selected countries with regard to the number of
    market competitors and concentration measures calculated using HHIs.
    We note that international differences in mobile market
    concentration may reflect a variety of factors, including
    differences in the regulatory environment.

49. Prior to the merger of Sprint and Nextel, the United States had one
    or two more national mobile telephone operators than most other
    industrialized countries of comparable income levels.[^94] By
    reducing the number of national mobile operators from five to four,
    the merger of Sprint and Nextel made the U.S. mobile market more
    similar in structure to comparable mobile telephone markets in
    Western Europe and Asia. There are three or four national mobile
    telephone operators in most Western European mobile markets.[^95]
    Only two Western European countries -- the United Kingdom ("UK") and
    Austria -- have five national mobile operators.[^96] Some comparable
    Asian-Pacific countries, such as Japan and Australia, also have
    three or four national mobile operators.[^97] The principal
    exception is Hong Kong, with six mobile operators.[^98]

50. Apart from the number of national competitors, there are significant
    structural differences between mobile markets in the United States
    and Western Europe. In addition to the four nationwide mobile
    telephone operators, several large regional operators and a large
    number of mobile telephone operators with smaller geographic
    footprints compete in many regional and local markets in the United
    States. In contrast, national mobile operators do not face
    competition from smaller facilities-based carriers in Western
    European mobile markets. As detailed above, the number of mobile
    competitors per market in the United States varies by region,
    ranging from as many as seven or more in some counties to fewer than
    four competitors in other counties. Nevertheless, as previously
    mentioned, 98 percent of the total U.S. population lives in counties
    with a minimum of three different mobile operators, the same as the
    maximum number of national mobile carriers in a number of Western
    European markets.

51. Because Western European regulators awarded nationwide licenses for
    second-generation GSM and third-generation services, consumers'
    choices of mobile telephone operators are uniform throughout each
    country. Accordingly, we measure concentration in European mobile
    markets on a national basis. For purposes of comparison, we computed
    HHIs based on subscriber shares as of the fourth quarter of 2005 for
    the following seven countries: Finland, France, Germany, Italy, the
    Netherlands, and the UK.[^99] The least concentrated mobile market
    is in the UK, with an HHI of 2282. Mobile subscribers in the UK are
    relatively evenly divided among the four GSM operators, and a fifth
    operator, a 3G start-up, had acquired a five percent subscriber
    share by the end of 2005. The value of HHI in the remaining
    countries ranges from a low of 3082 in Germany to a high of 3979 in
    Finland. The relatively high values of HHI in this group of
    countries reflect two factors. One is the small number of
    competitors per market, with four national operators in Germany, the
    Netherlands, and Italy, and three national operators in France and
    Finland. Second, each market tends to be dominated by the top two
    competitors, which have a combined market share ranging from 74
    percent in Germany and Italy to 85 percent in Finland.[^100]

52. Given our previous finding that the average value of HHI weighted by
    EA population in the U.S. mobile market is 2706 and that the median
    value is about 2785, it is evident that, on average, concentration
    is lower in the U.S. mobile market than in Western European mobile
    markets with the exception of the UK. At the same time, there are 31
    EAs representing approximately five percent of the U.S. population
    with higher mobile market concentration levels than Finland, the
    European country with the highest mobile market HHI among the
    European countries included in this comparison.

## Consolidation and Exit

53. Consolidation and exit of service providers, whether through
    secondary market transactions or bankruptcy, may affect the
    structure of the mobile telecommunications market. A reduction in
    the number of competing service providers due to consolidation or
    exit may increase the market power of any given service provider,
    which in turn could lead to higher prices, fewer services, and/or
    less innovation. However, consolidation does not always result in a
    negative impact on consumers. Consolidation in the mobile
    telecommunications market may enable carriers to achieve certain
    economies of scale and increased efficiencies compared to smaller
    operators.[^101] If the cost savings generated by consolidation give
    the newly enlarged carrier the ability and the incentive to compete
    more aggressively, consolidation could result in lower prices and
    new and innovative services for consumers.[^102] Moreover, it is
    unlikely that competitive harm will result from consolidation among
    service providers licensed to operate in separate geographic
    markets.

54. Among the policies potentially affecting consolidation in this
    market, the Commission eliminated a rule limiting the amount of
    spectrum a CMRS licensee could own or control in a given licensed
    area, effective January 2003.[^103] On July 8, 2004, the Commission
    also eliminated the cellular cross-interest rule then applicable
    only in Rural Service Areas ("RSAs") and transitioned to
    case-by-case competitive review for all applications related to
    transactions involving cellular licenses.[^104]

55. Since the end of 1999, carriers have been building nationwide
    footprints[^105] through various forms of transactions.[^106] One of
    the driving forces behind many of these transactions has been the
    desire of regional carriers to enhance their ability to compete with
    existing nationwide operators that offer attractive nationwide
    pricing plans.[^107] Moreover, national operators have sought to
    fill in gaps in their coverage areas, as well as to increase the
    capacity of their existing networks. As the Commission has
    previously concluded, operators with larger footprints can achieve
    certain economies of scale and increased efficiencies compared to
    operators with smaller footprints.[^108] Since the writing of the
    *Tenth Report*, a number of transactions between market participants
    have been completed or announced. We discuss the largest of these
    transactions below.

### Sales and Swaps

56. *Sprint Nextel / Affiliates --* On August 12, 2005, Sprint and
    Nextel completed their merger, after having received regulatory
    approval from the Commission and the DOJ.[^109] When the merger was
    first announced in December 2004, Sprint and Nextel had thirteen
    affiliates between them (twelve Sprint affiliates plus Nextel
    Partners). Currently, only four smaller affiliates -- iPCS, Northern
    PCS, Shentel, and Swiftel -- of the original thirteen remain
    independent.[^110] The others have been acquired by Sprint
    Nextel.[^111] A number of analysts expect Sprint Nextel to acquire
    the remaining four affiliates, which now serve about 800,000
    subscribers.[^112]

57. *Alltel / Midwest Wireless* -- On November 18, 2005, Alltel
    announced an agreement to purchase Midwest Wireless, a
    privately-held company with approximately 400,000 wireless
    subscribers in southern Minnesota, northern and eastern Iowa, and
    western Wisconsin.[^113] These markets are contiguous to existing
    Alltel operations and cover a population of 1.9 million.[^114] Under
    the agreement, Alltel will pay \$1.075 billion in cash to purchase
    Midwest Wireless' licenses, customers, and network assets.[^115]
    According to Alltel, "Midwest Wireless' business strengthens our
    position in the wireless industry by adding CDMA properties that are
    contiguous to our existing markets in the Midwestern U.S..
    ...Midwest Wireless\' network is well suited to deliver advanced
    data applications to customers through a reliable and robust 1x
    network."[^116]

### Affiliations

58. As discussed in previous reports, some of the nationwide operators
    had extended their coverage through contractual affiliations with
    smaller carriers.[^117] These affiliations created a "family" of
    operating companies with much closer relationships than those formed
    by traditional roaming agreements.[^118] All of these affiliations
    were established to accelerate the build-out of the larger
    companies' networks by granting smaller affiliates the exclusive
    right to offer mobile services for those companies, in some cases
    under the larger companies' brand names, in selected mid-sized and
    smaller markets.[^119] However, in the past two years, the vast
    majority of these affiliations have ended, either through the
    outright acquisition of the affiliate or through termination of the
    affiliation agreements.[^120] As one analyst observed, "the old
    national operators \... utilized affiliates to extend the national
    brands and networks into smaller markets quickly using the time,
    talent, and treasure of other companies. The need for affiliates
    diminished as smaller markets were built out and the financials of
    the national operators improved since affiliates were, in essence,
    off-balance sheet means to extend brand and network."[^121]

## Entry Conditions and Potential Barriers to Entry 

59. Market concentration is necessary but not sufficient for unilateral
    or coordinated anti-competitive behavior to occur. If entry into a
    market is easy, then entry or the threat of entry may prevent
    incumbent operators from exercising market power, either
    collectively or unilaterally, even in highly concentrated
    markets.[^122] The ease or difficulty of entry generally depends on
    the nature and significance of entry barriers. Barriers to entry in
    the mobile telecommunications market may include first-mover
    advantages, large sunk costs, and access to spectrum.[^123]

### Spectrum Allocation and Assignment

60. Government control of spectrum allocation and assignment has the
    potential to create a significant barrier to entry into markets for
    mobile communications services by limiting the amount of spectrum
    allocated to CMRS and by requiring carriers to obtain a
    government-issued license in order to use such spectrum for the
    provision of CMRS.[^124] However, the Commission has helped to
    reduce any potential entry-limiting effects of government-controlled
    spectrum allocation and assignment through various policies. First,
    as discussed in greater detail below, the amount of spectrum
    available for the provision of CMRS has been increased. For example,
    the allocation of 120 MHz of spectrum to broadband PCS ended the
    cellular duopoly by facilitating the entry of new mobile telephone
    service providers. Second, the Commission has progressively
    implemented a more flexible, market-oriented model of spectrum
    allocation and assignment for spectrum used to provide commercial
    mobile services. For example, initially spectrum policy restricted
    the use of cellular spectrum to analog service and limited the
    number of cellular entrants to two in each local market. In
    contrast, as detailed below, current policy affords licensees
    greater flexibility to decide what services to offer and what
    technologies to deploy on cellular spectrum, as well as other
    spectrum used for the provision of CMRS, and allows market forces to
    play a greater role in determining the number of entrants in each
    local market for mobile telephone service. Finally, subject to the
    Commission's approval, CMRS licensees are allowed to buy and sell
    licenses, in whole or in part, on the secondary market. As noted in
    the *Ninth Report*, beginning in 2003 the Commission also allowed
    CMRS licensees to lease all or a portion of their spectrum usage
    rights for any length of time within the license term, and over any
    geographic area encompassed by the license.[^125] The effect of this
    flexible, market-oriented spectrum model has been to help reduce any
    entry barriers that may arise from government regulation of
    spectrum.

#### Cellular, Broadband PCS, and SMR

61. Currently, mobile telephone operators primarily use three types of
    spectrum licenses to provide mobile voice and, in most cases, mobile
    data services: cellular, broadband PCS, and SMR.[^126] This
    information is provided as a basis for understanding the formation
    of the current industry structure.

62. [Cellular]{.underline} -- The Commission began licensing commercial
    cellular providers in 1982 and completed licensing the majority of
    operators by 1991. The Commission divided the United States and its
    possessions into 734 cellular market areas ("CMAs"), including 305
    Metropolitan Statistical Areas ("MSAs"), 428 Rural Statistical Areas
    ("RSAs"), and a market for the Gulf of Mexico.[^127] Two cellular
    systems were licensed in each market area. The Commission designated
    50 megahertz of spectrum in the 800 MHz frequency band for the two
    competing cellular systems in each market (25 megahertz for each
    system). Initially, cellular systems offered service using analog
    technology, but today most of the service offered using cellular
    spectrum is digital.[^128]

63. [Broadband PCS]{.underline} -- Broadband PCS is similar to cellular
    service, except that broadband PCS systems operate in different
    spectrum bands and have been designed from the beginning to use a
    digital format. Broadband PCS licenses have been assigned through
    auction, beginning in 1995.[^129] The Commission has set aside the
    spectrum between 1850 MHz and 1990 MHz for broadband PCS. This
    spectrum includes 120 megahertz used for mobile telephone services,
    divided originally into three blocks of 30 megahertz each (blocks A,
    B, and C) and three blocks of 10 megahertz each (blocks D, E, and
    F).[^130] Two of the 30 megahertz blocks (A and B blocks) are
    assigned on the basis of 51 Major Trading Areas ("MTAs").[^131] One
    of the 30 megahertz blocks (C block) and all three of the 10
    megahertz blocks are assigned on the basis of 493 BTAs.[^132]

64. [SMR]{.underline} -- The Commission first established SMR in 1979 to
    provide for land mobile communications on a commercial basis. The
    Commission initially licensed spectrum in the 800 and 900 MHz bands
    for this service, in non-contiguous bands, on a site-by-site
    basis.[^133] The Commission has since licensed additional SMR
    spectrum through auctions.[^134] In total, the Commission has
    licensed 19 megahertz of SMR spectrum, plus an additional 7.5
    megahertz of spectrum that is available for SMR as well as other
    services.[^135] While Commission policy permits flexible use of this
    spectrum, including the provision of paging, dispatch, mobile voice,
    mobile data, facsimile, or combinations of these services,[^136] the
    primary use for SMR traditionally has been dispatch services.[^137]
    Dispatch differs from mobile voice communications offered by PCS and
    cellular carriers in that it allows both one-to-one and one-to-many
    communication (including real-time conferencing with groups), and it
    generally does not operate through interconnection with the public
    switched telephone network.[^138] SMR systems have also had the
    ability to offer interconnected service, but until the development
    of digital technologies, analog SMR systems had limited capacity to
    provide mobile telephone services. In recent years, however, the
    nature of SMR service has evolved significantly. SMR providers such
    as Sprint Nextel (on its iDEN network) and SouthernLINC Wireless, a
    unit of energy concern Southern Company, have used digital
    technologies to increase spectral efficiency and to become more
    significant competitors in mobile telephony, while also providing
    dispatch functionality as a part of their service offerings.[^139]
    Furthermore, in apparent response to the dispatch functionality of
    SMR services, many cellular and broadband PCS carriers have begun to
    offer push-to-talk functionality on their networks, including
    Verizon Wireless, Cingular, Sprint Nextel (on its CDMA network), and
    Alltel. SMR spectrum is also used for certain data-only
    networks.[^140]

65. [Available Licenses and Spectrum Aggregation]{.underline} -- In
    every geographical area of the country, the Commission initially
    authorized up to eight different mobile telephone licenses (two
    cellular and six broadband PCS), not including additional digital
    SMR licenses.[^141] Moreover, under Commission rules, broadband PCS,
    cellular, and auctioned SMR licensees may, with Commission approval,
    disaggregate (divide the spectrum into smaller amounts of bandwidth)
    or partition (divide the license into smaller geographical areas)
    their licenses, or both, to other entities.[^142] Many licensees
    hold more than one license in a particular market. While no longer
    in operation, at one time the Commission's CMRS spectrum cap molded
    the distribution of spectrum licenses. Under the spectrum cap, no
    entity could control more than 45 megahertz of cellular, broadband
    PCS, and SMR[^143] spectrum in an MSA, or more than 55 megahertz in
    an RSA.[^144] In November 2001, however, the Commission raised the
    spectrum cap to 55 megahertz in all markets, and decided to
    eliminate the restriction entirely effective January 1, 2003.[^145]

#### 800 MHz Band Reconfiguration and 1.9 GHz Spectrum Exchange

66. On July 8, 2004, the Commission adopted a new band plan for the 800
    MHz band to resolve the problem of interference to public safety
    radio systems operating in the band from CMRS providers operating
    systems on channels in close proximity to those utilized by public
    safety entities.[^146] The new band plan addresses the root cause of
    the interference problem by separating generally incompatible
    technologies, with the costs of relocating 800 MHz incumbents to be
    paid by Nextel. To accomplish the reconfiguration, the Commission
    required Nextel to give up rights to certain of its licenses in the
    800 MHz band and all of its licenses in the 700 MHz band. In
    exchange, the Commission modified Nextel's licenses to provide the
    right to operate on two five-MHz blocks in the 1.9 GHz band --
    specifically 1910-1915 MHz and 1990-1995 MHz -- conditioned on
    Nextel fulfilling certain obligations specified in the Commission's
    decision. As a new entrant in the 1.9 GHz band, Nextel is also
    obligated to fund the transition of incumbent users to comparable
    facilities. The Commission determined that the overall value of the
    1.9 GHz spectrum is \$4.8 billion, less the cost of relocating
    incumbent users. In addition, the Commission decided to credit to
    Nextel the value of the spectrum rights that Nextel is relinquishing
    and the actual costs Nextel incurs to relocate all incumbents in the
    800 MHz and 1.9 GHz bands. To the extent that the total of these
    combined credits is less than the assessed value of the 1.9 GHz
    spectrum rights, Nextel will make an anti-windfall payment equal to
    the difference to the United States Department of the Treasury at
    the conclusion of the relocation process.

#### Narrowband Spectrum

67. In addition to the spectrum that mobile telephone carriers use to
    offer both voice and data CMRS services, two additional spectrum
    bands -- paging and narrowband PCS -- are used by licensees to offer
    CMRS services that consist only of data communications. Spectrum
    designated for commercial messaging/paging is spread across several
    non-contiguous bands: 35-36 MHz, 43-44 MHz, 152-159 MHz, 454-460
    MHz, and 929-932 MHz.[^147] Each license consists of between 20 and
    50 kilohertz.[^148] The Commission first allocated spectrum for
    paging in 1949 and licensed the spectrum on a site-by-site basis
    through the mid-1990s.[^149] In 2000 the Commission began auctioning
    additional paging licenses on a geographic area basis using EAs and
    MEAs.[^150] The Commission completed its third paging auction on May
    28, 2003.[^151]

68. Narrowband PCS spectrum is located in the 901-902 MHz, 930-931 MHz,
    and 940-941 MHz bands and allows licensees to offer an array of
    two-way data services such as text messaging.[^152] The Commission
    first auctioned narrowband PCS spectrum in 1994.[^153] Licenses
    consist of between 50 and 200 kilohertz each and were auctioned on a
    nationwide, regional, and MTA basis.[^154] The Commission completed
    its most recent auction of narrowband PCS licenses on September 25,
    2003.[^155]

#### 700 MHz Bands

69. As discussed in the *Eighth Report,* the 700 MHz spectrum is being
    reclaimed from use by broadcast services in connection with the
    transition of the analog television service to digital television
    (DTV).[^156] The reclamation of television spectrum has been
    addressed in two parts, primarily as a result of different statutory
    requirements applicable to the two bands and differing degrees of
    incumbency in the two bands.[^157] These two bands are the 698-746
    MHz (known as the "Lower 700 MHz") band and the 746-806 MHz (or
    "Upper 700 MHz") band. The Upper 700 MHz Band is currently used by
    TV stations on Channels 60-69 and comprises 60 megahertz, while the
    Lower 700 MHz Band, which is used by TV stations on Channels 52-59,
    comprises 48 megahertz of spectrum.[^158]

70. Seventy-eight megahertz of the total 108 megahertz of Upper and
    Lower 700 MHz spectrum will generally be open to a broad range of
    flexible uses.[^159] These bands have many permissible uses: new
    licensees may use the spectrum for fixed, mobile (including mobile
    wireless commercial services), and broadcast services.[^160] The
    Commission expects that many of the new technologies to be developed
    and deployed in this band will support advanced wireless
    applications.[^161] However, portions of the Upper and Lower 700 MHz
    spectrum are currently encumbered by television broadcasters, and
    may remain so until the end of period when broadcasters convert from
    analog to digital transmission systems.[^162] The Digital Television
    and Public Safety Act of 2005 ("DTV Act of 2005") amended the
    statutory definition of that period and established February 17,
    2009 as the end of the DTV transition.[^163] Nevertheless, there may
    be some portions of these bands that are not so encumbered and are
    available for immediate use by new licensees.

71. The Balanced Budget Act of 1997 and certain subsequent legislation
    initially directed the Commission to license these reclaimed
    spectrum bands well in advance of the end of the DTV transition
    period.[^164] The Auction Reform Act of 2002 eliminated these
    statutory deadlines[^165] and provided the Commission with a level
    of discretion on the timing of and deadlines for issuing
    licenses.[^166] The Auction Reform Act further ordered the
    Commission to delay the A, B, and E block portion of Auction No. 44
    (Lower 700 MHz) and the entire Auction No. 31 (Upper 700 MHz), but
    directed it to proceed with an auction of the Lower 700 MHz C and D
    blocks.[^167] The initial auction of Lower 700 MHz C and D block
    licenses (Auction No. 44) raised \$88.7 million in net bids.[^168]
    Subsequent auctions of licenses in these bands (Auction Nos. 49
    and 60) resulted in winning bids for all of the licenses that
    remained held by the Commission after Auction No. 44 and raised
    additional net bids of over \$57 million.[^169]

72. The DTV Act of 2005 provides a number of changes to the transition
    of the analog television service to digital television and the
    reclamation of the 700 MHz spectrum.[^170] These include amending
    Section 309(j)(14) of the Communications Act to establish February
    17, 2009 as the end of the DTV transition.[^171] Congress also
    addressed the timing of auctions for the assignment of remaining
    spectrum from TV Channels 52-69. The Communications Act now requires
    the Commission to commence the auction of recovered analog broadcast
    spectrum no later than January 28, 2008[^172] and deposit the
    proceeds of such auction in the Digital Television Transition and
    Public Safety Fund no later than June 30, 2008.[^173] Congress also
    extended the Commission's auction authority to September 30,
    2011.[^174]

#### Advanced Wireless Services

73. U.S. mobile carriers have the flexibility to deploy advanced
    wireless technologies, including those commonly called Third
    Generation or "3G," that allow them to offer high-speed mobile data
    services using their existing CMRS spectrum.[^175] To further the
    goal of promoting the deployment of advanced services, the
    Commission has made efforts to allocate and license additional
    spectrum suitable for offering advanced wireless services
    (AWS).[^176] As noted in the *Tenth Report*, in 2002 the Commission,
    together with the National Telecommunications and Information
    Administration ("NTIA"), allocated 90 megahertz of spectrum in the
    1710-1755 and 2110-2155 MHz bands that can be used to offer advanced
    wireless services, including 3G services.[^177]

74. Since that time, the Commission has completed the process of
    establishing service rules for the 1710-1755 and 2110-2155 MHz bands
    in preparation for the auctioning of this spectrum in 2006.
    Initially, in November 2003, in WT Docket No. 02-353, the Commission
    released a *Report and Order* adopting rules in the 1710-1755 and
    2110-2155 MHz bands including application, licensing, operating and
    technical rules, and competitive bidding provisions (*AWS-1 Service
    Rules Order*).[^178] More specifically, the Commission determined
    that this spectrum could be used for any wireless service that is
    consistent with the spectrum's fixed and mobile allocations and
    would be licensed under the Commission's flexible, market-oriented
    Part 27 rules.[^179] In order to meet a variety of needs, including
    the needs of both large and small service providers, the Commission
    adopted a band plan for this spectrum employing paired spectrum
    blocks and Economic Areas (EAs), Regional Economic Areas (REAGs) and
    Rural Service Areas/Metropolitan Statistical Areas (RSA/MSA)
    licensing areas. The band plan also permitted spectrum to be easily
    aggregated.

75. The Commission decided not to impose ownership restrictions (other
    than those contained in Section 310 of the Communications Act),
    spectrum aggregation limits, eligibility restrictions, or interim
    performance requirements. The Commission did limit the lower band
    (*i.e*., 1710-1755 MHz band) to mobile transmissions and the upper
    band (*i.e.*, 2110-2155 MHz band) to base transmissions and
    established rules to protect co-channel and adjacent channel
    operations from interference. The Commission also determined to
    assign licenses for this spectrum using the Commission's Part 1
    competitive bidding rules and award bidding credits of 15 percent
    for small businesses and 25 percent for very small businesses.[^180]

76. Subsequent to the *AWS-1 Service Rules Order*, the Commission
    released additional orders further clarifying the service rules for
    the 1710-1755 MHz and 2110-2155 MHz bands. In 2005, in response to
    petitions for reconsideration of the *AWS-1 Service Rules Order*,
    the Commission amended the band plan, providing for a greater amount
    of spectrum to be licensed on a small geographic basis to encourage
    the participation of small and rural carriers in the AWS auction,
    and making other changes in response to the spectrum needs reflected
    in the record.[^181] In 2006, the Commission adopted rules
    establishing new restrictions on the award of designated entity
    auction credits to an applicant or licensee that has an
    "impermissible" or "attributable" material relationship with a
    non-designated entity resulting from a spectrum lease or resale
    agreement, in order to ensure that the benefits of designated entity
    status at auction are reserved for actual designated entities and to
    prevent unjust enrichment of unintended beneficiaries.[^182] Also in
    2006, the Commission established procedures by which AWS licensees
    in the 2110-2155 MHz band, among others, could relocate existing
    incumbents in that band to other spectrum, including fixed microwave
    service licensees in the 2110-2150 MHz band and Broadband Radio
    Service licensees in the 2150-2162 MHz band, and also established
    rules under which other new licensees benefiting from the relocation
    of an incumbent would share in the costs of the relocation.[^183] In
    addition to these service rule orders, the Commission in 2006 also
    established procedures for the upcoming auction of the 1710-1755 MHz
    and 2110-2155 MHz bands that started on August 9, 2006.[^184]

77. The Commission has also taken significant steps toward licensing
    other bands of spectrum for use by AWS. In 2004, the Commission
    allocated an additional twenty megahertz of spectrum in the
    1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz
    bands.[^185] The Commission additionally released the *AWS-2 Service
    Rules NPRM*, which sought comment on appropriate service rules for
    the1915-1920 MHz, 1995-2000 MHz, 2020-2025 MHz and 2175-2180 MHz
    bands, and also offered some tentative conclusions consistent with
    existing AWS service rules, such as allowing flexible use of this
    spectrum and licensing this spectrum under Part 27 of the
    Commission's rules. Finally, in 2005, the Commission designated yet
    another 20 MHz of spectrum for AWS, specifically the 2155-2175 MHz
    band, thus establishing 70 MHz of contiguous AWS spectrum in the 2.1
    GHz band (from 2110 to 2180 MHz).[^186]

#### Broadband Radio Service 

78. In July 2004, the Commission transformed the rules and policies
    governing the Multipoint Distribution Service (MDS) and the
    Instructional Television Fixed Service (ITFS) in the 2500-2690 MHz
    band by providing licensees with greater flexibility and
    establishing a more functional band plan.[^187] As one part of this
    action, the Commission renamed the MDS service the "Broadband Radio
    Service" (BRS) and renamed the ITFS service the Educational
    Broadband Service (EBS).

79. The Commission took several steps to restructure the BRS/EBS band
    and facilitate more efficient use of the spectrum. First, the
    Commission expanded the 2500-2690 MHz band by five megahertz, from
    2495-2690 MHz, to accommodate the relocation of BRS Channels 1 and
    2, which are presently located in the 2.1 GHz band. Specifically,
    the Commission created a one megahertz guard-band, 2495-2496 MHz, to
    separate incumbent operations below 2495 MHz and new BRS Channel 1
    licensees that would operate at 2496-2502 MHz. Second, the
    Commission created a new BRS/EBS band plan for the 2496-2690 MHz
    band that eliminated the use of interleaved channels and created
    distinct band segments for high power operations, such as one-way
    video transmission, and low power operations, such as two-way fixed
    and mobile broadband applications. By grouping high and low power
    users into separate portions of the band, the new band plan reduces
    the likelihood of interference caused by incompatible uses and
    creates incentives for the development of low-power, cellularized
    broadband operations, which were inhibited by the prior band plan.

80. In addition, the Commission provided licensees with the flexibility
    to employ the technologies of their choice in the band and to lease
    spectrum under the Commission's secondary market spectrum leasing
    policies and procedures. The Commission also implemented geographic
    area licensing for all licensees in the band, which will allow
    increased flexibility while reducing administrative burdens on both
    licensees and the Commission.

81. In April 2006, the Commission continued its transformation of the
    rules governing BRS and EBS by revising the mechanism for transition
    from the existing band configuration to the new band plan.[^188] BRS
    and EBS providers will have thirty months from the effective date of
    the new rules during which they may propose transition plans for
    relocating existing facilities of all other licensees within the
    same Basic Trading Area (BTA) to new spectrum assignments in the
    revised band plan. Plan proponents must notify all licensees in the
    BTA and file their plans with the Commission. The Commission also
    allowed licensees to transition themselves if no proponent came
    forward in a BTA by the deadline for filing transition plans. It
    also made other changes to the transition rules to facilitate
    transitions to the new band plan. With respect to lease agreements,
    the Commission held that EBS licensees are permitted to enter into
    excess capacity leases for a maximum of 30 years, but leases with
    terms of 15 years or longer must include a right to review the
    educational use requirements of the leases every five years starting
    at year 15.

82. The changes made to the 2496-2690 MHz band should enable BRS/EBS
    providers to use this spectrum in a more technologically and
    economically efficient manner. The goal of the new rules is to
    facilitate the growth of new and innovative wireless technologies
    and services, including wireless broadband services that have the
    potential to compete with cable and DSL broadband providers and to
    extend broadband service to rural and underserved areas.

### Other Potential Barriers to Entry

83. There are three other types of potential entry barriers, each of
    which captures separate dimensions of the difficulty of entering an
    industry.[^189] The first type consists of the impediment to entry
    erected by advertising expenditures. Unlike tangible capital,
    advertising can neither be resold nor otherwise transferred to
    prospective buyers; such expenditures are irrecoverable or sunk.
    While the incumbent has already incurred the sunk costs, the entrant
    has not. Therefore, the entrant has higher incremental cost and
    incremental risk associated with its decision to enter. The second
    type of entry barrier arises from economies of scale, which allow
    firms to lower the cost per unit of producing and distributing a
    product as the volume of output expands. The more extensive
    economies of scale are, the larger the minimum efficient scale is
    relative to the size of the market. Consequently, a nascent firm
    risks depressing market price by producing at optimal scale. The
    alternative is to produce at less than minimum cost. Either way,
    expected profitability is lowered, and entry is dissuaded. The third
    type of entry barrier, and closely related to the second, is the
    inability of new firms to borrow sums sufficient to finance
    efficient start-ups. The inability to borrow sufficiently increases
    with the larger absolute capital requirement needed to realize
    minimum cost.

84. All three types of entry barriers have the potential to afford
    incumbent carriers first-mover advantages over latecomers.
    Therefore, it is possible that the three types of entry barriers are
    significant in mobile telephone service. Telecommunications has
    historically been an industry characterized by large investments in
    network infrastructure and vast scale economies, suggesting the
    scale economy and capital requirement barriers are both high.
    Increasing advertising expenditures by mobile telephone carriers as
    they seek to brand their products suggests that the product
    differentiation barrier in mobile telephone service is similarly
    high. As documented below in Section IV.B.4 on carrier rivalry with
    respect to advertising and marketing, the four nationwide operators
    alone spent a total of \$3.5 billion on advertising in 2005, and one
    analysis determined that Cingular Wireless and Verizon Wireless were
    two of the top three U.S. brands as measured by dollars spent on
    advertising.[^190] At the same time, regardless of the nature and
    potential significance of entry barriers, we nevertheless continue
    to observe entry in local markets due to the continued expansion of
    existing carriers. Furthermore, we have an expectation that the
    auction of AWS spectrum will facilitate entry into local mobile
    telephone markets by existing carriers, or possibly entirely new
    firms, despite the potential entry barriers discussed above.

## Rural Markets

### Geographical Comparisons: Urban vs. Rural

85. Since the release of the *Sixth Report,*[^191] the Commission has
    attempted to obtain a better understanding of the state of
    competition below the national level, and particularly in rural
    areas.[^192] The Commission does not have a statutory definition of
    what constitutes a rural area.[^193] The Commission has used RSAs as
    a proxy for rural areas for certain purposes, such as the former
    cellular cross-interest rule and the former CMRS spectrum cap,
    stating that "other market designations used by the Commission for
    CMRS, such as \[EAs\], combine urbanized and rural areas, while MSAs
    and RSAs are defined expressly to distinguish between rural and
    urban areas."[^194] In its Report and Order concerning deployment of
    wireless services in rural areas, the Commission adopted a
    "baseline" definition of rural as a county with a population density
    of 100 persons or fewer per square mile.[^195] For this reason, we
    adopt this same definition to analyze service availability in rural
    areas for this report.[^196]

### Rural Competition

86. In comparing competitive entry in counties with population densities
    of 100 persons per square mile or less to those with densities
    greater than 100 persons per square mile, we find that the less
    densely populated counties have an average of 3.6 mobile
    competitors, while the more densely populated counties have an
    average of 4.9 competitors.[^197] The average number of competitors
    in the less densely populated counties generally has remained
    unchanged for the past two years, whereas the average number of
    competitors in the more densely populated counties declined by 11
    percent from an average of 5.5 competitors in the previous year,
    which itself represented a 7 percent decline from the previous year
    as reported in the *Tenth Report*.[^198]

87. A number of commenters claimed there was strong innovation and
    competition occurring in rural areas. One commenter said, "carriers,
    including large and small, regional and local providers, have
    deployed new technologies and overlaid existing networks in order to
    meet consumers' evolving expectations and needs," adding later that
    "consumers enjoy a rich variety (and number) of rate plan choices in
    both rural and urban markets, in coastal cities and small towns, at
    competitive rates."[^199] Another commenter said, "\[c\]ompetition
    in our rural areas is strong. In much of our service area we compete
    with ten or more competitors. In fact, most of the national carriers
    cover parts of the areas that we serve and compete with us daily for
    customers."[^200] A third commenter said, "\[competition from
    nationwide carriers indicates that\] larger carriers are
    increasingly building out their networks in rural and underserved
    areas."[^201]

### Conclusion

88. Based on our rollout analysis, information and statements provided
    by commenters, and industry reports, we conclude that CMRS providers
    are competing effectively in rural areas. In addition, some analysts
    report that wireless competition is increasing in rural areas,
    particularly as a wireline substitute.[^202] While it does appear
    that, on average, a smaller number of operators are serving rural
    areas than urban areas, this structural difference is not, by
    itself, a sufficient basis for concluding that CMRS competition is
    not effective in rural areas. We note that, market structure is only
    a starting point for a broader analysis of the status of competition
    based on the totality of circumstances, including the pattern of
    carrier conduct, consumer behavior, and market performance as
    discussed more fully below. Despite the smaller number of mobile
    operators in rural areas as compared to urban areas, there is no
    evidence in the record to indicate that this structural difference
    has enabled carriers in rural areas to raise prices above
    competitive levels or to alter other terms and conditions of service
    to the detriment of rural consumers. To the contrary, one analyst
    found that rural carriers are rolling out competitive national
    pricing plans with "surprisingly low per-minute pricing."[^203]

# CARRIER CONDUCT IN THE MOBILE TELECOMMUNICATIONS MARKET

89. A concentrated market, in conjunction with significant entry
    barriers, may lessen competition in the market for commercial mobile
    services in two distinct ways. First, it may increase the likelihood
    that a group of competing carriers will successfully engage in
    coordinated interaction aimed at raising prices and lowering output.
    Second, it may enable an individual carrier to profitably raise
    price and lower output unilaterally. However, neither coordinated
    interaction nor unilateral action to lessen competition is a
    necessary consequence of market concentration and entry barriers.
    For example, unilateral or coordinated action to lessen competition
    may be thwarted or undermined by the presence of one or more
    maverick carriers who have the ability and incentive to expand sales
    by undercutting the prices of rivals, offering innovative service
    packages and engaging in aggressive advertising and promotional
    campaigns.[^204] The analysis of carrier conduct thus focuses on
    whether incumbent carriers, given the prevailing market structure,
    engage in intense price and non-price rivalry or instead compete in
    a less aggressive manner.

## Price Rivalry

### Developments in Mobile Telephone Pricing Plans

90. The continued rollout of differentiated pricing plans also indicates
    a competitive marketplace. In the mobile telephone sector, we
    observe independent pricing behavior, in the form of continued
    experimentation with varying pricing levels and structures, for
    varying service packages, with various handsets and policies on
    handset pricing. AT&T Wireless's Digital One Rate plan, introduced
    in May 1998, is one notable example of an independent pricing action
    that altered the market to the benefit of consumers.[^205] Today all
    of the nationwide operators offer some version of a national rate
    pricing plan in which customers can purchase a bucket of minutes to
    use on a nationwide or nearly nationwide network without incurring
    roaming or long-distance charges. A more recent example is the
    introduction and spread of "family plan" packages, in which
    subscribers sign up for two lines and then have the option of adding
    additional lines at reduced prices, with all lines sharing the
    available minutes on the plan jointly.[^206] As noted in the *Tenth
    Report*, all the nationwide carriers also offer some version of a
    family plan.[^207]

91. Recently, a few U.S. providers have introduced "mobile to anyone"
    calling options. The new feature, currently offered by regional
    operators Alltel and Suncom, allow subscribers unlimited free
    calling to and from any ten designated numbers in the United States,
    regardless of wireline or wireless carrier.[^208] Alltel's new
    service is available to customers with plans that cost at least
    \$59.99 a month and offer 1,200 minutes,[^209] while Suncom feature
    costs an additional \$10 a month for regional calling or \$15
    monthly for national calling.[^210] These plans are premised on
    statistics showing that many consumers make most of their calls to
    about half a dozen numbers.[^211] Most other carriers have
    recognized the same trend, but their plans typically provide free
    calls only to customers who use the same wireless provider
    ("on-net").[^212] While carriers typically pay fees to other
    carriers to connect calls on their networks ("off-net"), Alltel
    expects to offset that loss of revenue by getting customers to sign
    up for the higher priced monthly plans necessary to receive the
    "mobile to anyone" feature.[^213] In addition, Sprint Nextel
    launched a similar, but more limited, calling service that allows
    for unlimited calling between a customer's mobile phone and a
    designated home phone or office phone number, regardless of their
    local provider, for an additional fee.[^214] One analyst wrote that
    they "expect wireless carriers to continue to offer these types of
    value added services, as they provide a way to help increase overall
    customer ARPU and reduce churn."[^215]

92. The *Tenth Report* noted that early termination fees ("ETFs") are a
    widespread phenomenon in the marketplace.[^216] In June 2006,
    Verizon Wireless announced that the company will pro-rate ETFs for
    customers nationwide beginning in fall 2006.[^217] The company will
    include new terms in customer contracts that will progressively
    reduce the amount a customer has to pay if they cancel their service
    with Verizon Wireless before the term of their contract expires. The
    pro-rated fees will apply to contracts signed or renewed after the
    new policy takes effect, and the amount owed will vary depending on
    the time remaining in the contract.[^218] Verizon Wireless is the
    first major U.S. carrier to commit to a national policy to pro-rate
    ETFs. It has been suggested that Verizon Wireless's plan to pro-rate
    ETFs may put competitive pressure on other carriers to follow
    suit.[^219] Thus, like AT&T's introduction of its digital-one-rate
    plan in 1998, Verizon Wireless's plan to pro-rate ETFs may be
    interpreted as a sign of competitive rivalry.

### Prepaid Service

93. In the United States, most mobile telephone subscribers pay their
    phone bills after they have incurred charges, an approach known as
    postpaid service. Prepaid service, in contrast, requires customers
    to pay for a fixed amount of minutes prior to making calls. Although
    prepaid plans are considered a good way to increase penetration
    rates, they typically produce lower ARPUs and higher churn rates in
    comparison to postpaid service.[^220] For these reasons, the
    industry generally has not heavily promoted prepaid offerings in the
    past.[^221] However, the pool of unsubscribed customers qualified
    for postpaid plans[^222] has declined to the point where prepaid
    offerings, which do not require credit checks, seem more attractive
    to carriers.[^223] In response, some carriers have introduced new
    prepaid plans, or entire brands.[^224] In some cases, they are
    tailoring their offerings to suit segments of the market that do not
    want or cannot get a traditional cellular plan, particularly the
    youth market.

94. The result of these efforts has been a significant rise in the
    percentage of wireless users who subscribe to prepaid plans.
    According to one analyst, prepaid accounted for roughly 11 percent
    of U.S. subscribers at the end of 2005, versus 9.5 percent at the
    end of 2004 and 8.1 percent at the end of 2003.[^225] According to
    another analyst's survey, 27 percent of the net subscriber adds in
    the fourth quarter of 2005 were prepaid customers.[^226] Among the
    nationwide carriers, T-Mobile had 15 percent of its subscribers on
    prepaid plans, Cingular Wireless and Sprint Nextel each had 6
    percent,[^227] and Verizon Wireless had 3 percent.[^228]

### Mobile Data Pricing

95. As noted in the *Ninth Report*, mobile data services that enable
    subscribers to browse customized web sites, send text and multimedia
    messages, download ringtones and games, and access other content on
    their cellphones are marketed primarily as an add-on to mobile voice
    service.[^229] During the past year carriers continued to use a
    variety of different options for pricing such handset-based mobile
    data services. These options include pricing based on kilobytes
    consumed, a flat rate for each use or download of an application
    ("pay-as-you-go" or "pay-per-use"), and fixed monthly subscription
    fees for packages allowing either a set amount of data usage or
    unlimited data use.[^230] The availability of these pricing options
    varies by type of application as well as by provider, with providers
    frequently offering customers a choice of pricing options for a
    particular application. In addition to allowing customers to
    purchase particular applications on a stand-alone or *a la carte*
    basis, carriers also offer certain applications bundled with monthly
    data packages for cellphones. As in the past, mobile data pricing
    continues to be characterized by considerable complexity due to the
    diversity of pricing options.[^231]

96. Mobile subscribers who wish to browse web sites that have been
    customized for handsets generally have two principal pricing options
    to choose from. First, they can purchase monthly data packages that
    allow subscribers to browse the customized web sites, view email,
    and access other services and content on their cellphones for a
    fixed monthly fee.[^232] This includes wireless data plans for
    mobile broadband networks such as Verizon Wireless's V Cast and
    Sprint Nextel's Power Vision services.[^233] The specific content of
    such mobile data packages varies by provider.[^234] While these data
    packages typically allow unlimited data use or unlimited use of
    selected services such as web browsing and email access, some
    carriers also offer metered plans that include a fixed amount of
    megabytes and keep track of the number of kilobytes subscribers use
    when they download applications and transmit or receive
    information.[^235] If a subscriber exceeds the monthly allotment of
    megabytes under a metered plan, the carrier charges additional data
    fees on a per-kilobyte basis. Alternatively, some carriers deduct
    from a subscriber's airtime for using their data plans.[^236]
    Second, mobile subscribers may also access the same content on a
    pay-as-you-go basis, without purchasing a monthly data plan, by
    paying a casual usage rate such as a per-kilobyte fee.[^237]
    However, Telephia estimates that subscribers who access the web via
    their cellphones are nearly twice as likely to subscribe to monthly
    data packages as to use a pay-per-use option.[^238] According to
    Telephia, this is because consumers perceive mobile web browsing to
    be too expensive without using monthly data packages, and want to
    avoid being surprised by additional charges billed to their monthly
    cellphone invoices.[^239]

97. Mobile subscribers who use communications data services such as text
    messaging services ("SMS") and photo or other multimedia messaging
    services ("MMS") can choose from a number of pricing options. Some
    carriers bundle various packages and combinations of text messages
    and multimedia messages with monthly mobile data packages.[^240] In
    addition, carriers typically offer customers a choice of two *a la
    carte* pricing options for SMS and MMS: (1) send and receive
    messages on a pay-as-you-go basis for a flat rate per message sent
    or received; or (2) purchase a messaging package for a fixed monthly
    fee that yields a lower unit price per message as compared with the
    flat pay-as-you-go rate.[^241] Some carriers also offer unlimited
    text or photo messaging packages for a fixed monthly fee.[^242] The
    pay-as-you-go option is significantly more expensive on a per
    message basis for photo messaging and other types of MMS than it is
    for simple text messaging.[^243] Consequently, Telephia estimates
    that MMS users are nearly three times as likely to subscribe to
    monthly MMS packages as to use the pay-per-use option, whereas among
    SMS users the pay-per-use option and monthly SMS packages are almost
    equally popular.[^244]

98. Downloadable applications such as ringtones and games are generally
    priced on a pay-as-you-go basis. Some carriers charge just a
    one-time fixed fee per game or ringtone to purchase such an
    application and use it for an unlimited period.[^245] Other carriers
    charge customers for the kilobytes or minutes of airtime used while
    downloading a ringtone or game, in addition to a one-time fixed fee
    to purchase and use each application.[^246] Under the latter pricing
    approach, the subscriber may be able to avoid the additional
    kilobyte-based charge by purchasing a monthly data plan with
    unlimited data use or a sufficient allotment of metered data
    usage.[^247] Some carriers offer other pricing options for
    downloadable applications. For example, in addition to a one-time
    fee for unlimited use of a game, some carriers offer customers the
    option of paying a lower fee for a monthly subscription to the same
    game.[^248]

99. The pricing of advanced multimedia services such as streaming video
    clips, mobile television, and over-the-air music downloading
    services for cellphones also varies by type of application and by
    provider.[^249] Depending on the carrier, type of content, or its
    source, video content for cellphones may be available bundled with a
    carrier's monthly mobile data package, on a subscription basis for
    an additional fixed monthly fee, or on a pay-per-view basis.[^250]
    Both Sprint Nextel and Verizon Wireless price their new over-the-air
    music downloading services on a pay-as-you-go basis for a flat rate
    per song. In particular, both carriers charge customers a uniform
    fee to purchase and download a full-length song directly to their
    mobile handsets.[^251] For the same price, customers get two copies
    of a song, one for their cellphone and the other for a personal
    computer. Verizon Wireless also allows customers to purchase and
    download songs from their personal computer and transfer them to
    their cellphone at a lower price than that for a direct over-the-air
    download to a cellphone. Verizon Wireless customers need a
    subscription to a monthly V Cast data package, as well as a calling
    plan, to access its music service. Although Sprint Nextel customers
    technically do not need a monthly data plan to purchase songs from
    the Sprint Music Store, a subscription to a monthly data plan is
    necessary to avoid paying additional per-kilobyte data fees for
    casual usage while downloading each song.

100. Aside from handset-based applications, carriers offer monthly
     mobile Internet access packages for data users who access the
     Internet through laptops or Personal Digital Assistants ("PDAs").
     The nationwide carriers continue to price mobile Internet access
     packages in two principal ways: based on a set amount of megabytes
     per month or unlimited monthly data use.[^252] This pricing
     approach extends to mobile Internet access packages for wireless
     broadband networks, including Verizon Wireless's EV-DO-based
     BroadbandAccess service, Sprint's EV-DO service, and Cingular's
     WCDMA/HSDPA-based BroadbandConnect service.[^253] As noted in the
     *Ninth Report*, under the megabyte-based pricing scheme, the
     monthly rate per package increases with the amount of megabytes
     included in the package, but the volume discounts provided by
     larger packages result in a progressively lower price per
     megabyte.[^254]

## Non-Price Rivalry

101. Service providers in the mobile telecommunications market also
     compete on many more dimensions other than price, including
     non-price characteristics such as coverage, call quality, data
     speeds, and mobile data content. Indicators of non-price rivalry
     include advertising and marketing, capital expenditures, technology
     deployment and upgrades, and the provision of mobile data services.

### Technology Deployment and Upgrades

#### Overview

102. The subject of technology deployment and upgrades by U.S. mobile
     telecommunications carriers is properly analyzed under the heading
     of carrier conduct because of the Commission's market-based
     approach to managing spectrum for commercial mobile voice and data
     services. In particular, the Commission's policies allow mobile
     telecommunications carriers the freedom to choose among the various
     standards for second-generation and more advanced network
     technologies that are identified and described below. In contrast,
     the European Community mandated a single harmonized standard for
     second-generation mobile telecommunications services, and has also
     adopted a single standard for third-generation services.[^255]
     Thanks to the flexibility afforded by the Commission's market-based
     approach, different U.S. carriers have chosen a variety of
     different technologies and associated technology migration paths,
     and competition among multiple incompatible standards has emerged
     as an important dimension of non-price rivalry in the U.S. mobile
     telecommunications market and a distinctive feature of the U.S.
     mobile industry model.

103. Theory and evidence suggest that allowing the use of multiple
     standards may have several pro-competitive advantages over
     standardization of wireless network technologies. Since the types
     of services tend to differ across technologies, use of multiple
     standards may result in greater product variety and greater
     differentiation of services offered by carriers using different
     technologies.[^256] Diversified and heterogeneous services make it
     more difficult for carriers to coordinate their behavior so as to
     restrict competition with regard to pricing. Other potential
     pro-competitive advantages of multiple standards include greater
     technological competition and greater price competition between
     operators using different technologies.[^257] In particular,
     competition between carriers using competing incompatible
     technologies tends to put pressure on carriers to achieve
     sufficiently high adoption of their technology in order to ensure
     it survives the "standards war."[^258] The pressure to fill their
     networks may lead carriers to enact price cuts and handset
     subsidies.[^259] Finally, the adoption of a particular standard may
     enable one carrier, or a subset of carriers, to gain a temporary
     competitive advantage over rival carriers, which may also tend to
     undermine the incentive and the ability of carriers to coordinate
     their conduct in such a way as to restrict competition.

104. The following analysis of technology deployment and upgrades is
     divided into four parts. As background to examining the particular
     technological choices made by different carriers, Section IV.B.1.b
     provides an introduction to cellular network design and technology
     and identifies and describes the major digital technologies and
     associated migration paths. Section IV.B.1.c examines the specific
     technological choices made by mobile carriers that use the same
     spectrum bands, network design and technologies to offer both voice
     and data services. Section IV.B.1.d examines the impact of these
     choices on coverage by technology type. Finally, Section IV.B.1.e
     examines the technology deployment decisions of carriers with
     regard to data-only networks and services.

#### Background on Network Design and Technology

105. Cellular, PCS, and digital SMR networks use the same basic design.
     All use a series of low-power transmitters to serve relatively
     small areas ("cells"), and reuse spectrum to maximize
     efficiency.[^260] In the past, cellular and SMR networks used an
     analog technology, while PCS networks were designed from the start
     to use a digital format. Digital technology provides better sound
     quality and increased spectral efficiency than analog technology.
     From a customer's perspective, digital service in the cellular band
     or SMR bands is virtually identical to digital service in the PCS
     band. Digital technology is now dominant in the mobile telephone
     sector, with approximately 97 percent of all wireless subscribers
     using digital service.[^261]

106. The four main digital technologies used in the United States are:
     Code Division Multiple Access ("CDMA"), Global System for Mobile
     Communications ("GSM"), integrated Digital Enhanced Network
     ("iDEN"), and Time Division Multiple Access ("TDMA"). These four
     technologies are commonly referred to as Second Generation, or
     "2G," because they succeeded the first generation of analog
     cellular technology, Advanced Mobile Phone Systems ("AMPS").[^262]
     As discussed in the *Seventh Report*, in light of industry
     developments this report no longer distinguishes between TDMA and
     GSM networks in its analysis of digital coverage, but considers the
     two as one migration path towards more advanced digital
     capabilities. The large U.S. carriers are in the process of phasing
     out TDMA.[^263]

107. Beyond the 2G digital technologies, mobile telephone carriers have
     been deploying next-generation network technologies[^264] that
     allow them to offer mobile data services at higher data transfer
     speeds and, in some cases, to increase voice capacity.[^265] For
     TDMA/GSM carriers, the first step in the migration to
     next-generation network technologies is General Packet Radio
     Service ("GPRS" or "GSM/GPRS"), a packet-based data-only network
     upgrade that allows for faster data rates by aggregating up to
     eight 14.4 kbps channels.[^266] Beyond GPRS, most U.S. TDMA/GSM
     carriers have begun to deploy Enhanced Data Rates for GSM Evolution
     ("EDGE") technology, which offers average data speeds of 100-130
     kbps. Wideband CDMA ("WCDMA," also known as Universal Mobile
     Telecommunications System, or "UMTS") is the next migration step
     for GSM carriers beyond EDGE and allows maximum data transfer
     speeds of up to 2 Mbps and average user speeds of 220-320
     kbps.[^267] Finally, deployment of WCDMA with HSDPA (High Speed
     Data Packet Access) technology will allow average download speeds
     of 400-700 kbps with burst rates of up to several Mbps.[^268]
     Although WCDMA/HSDPA is not backwards compatible with GPRS/EDGE,
     wireless modem cards that are compatible with both WCDMA/HSDPA and
     GPRS/EDGE, and enable handoff between the two types of networks,
     are available for use with laptop computers.[^269]

108. Many CDMA carriers have upgraded their networks to CDMA2000 1xRTT
     (also referred to as "CDMA2000 1X" or "1xRTT") , a technology that
     doubles voice capacity and delivers peak data rates of 307 kbps in
     mobile environments and typical speeds of 40-70 kbps.[^270] The
     next step in the CDMA migration beyond 1xRTT is CDMA2000 1xEV-DO
     (evolution-data only, "EV-DO"), which allows maximum data
     throughput speeds of 2.4 Mbps.[^271] Whereas WCDMA and HSDPA are
     incompatible with earlier technologies on the GSM migration path,
     the more advanced technologies on the CDMA migration path are
     backwards compatible.[^272]

#### Technology Choices and Upgrades of Mobile Telephone Carriers

109. Of the four nationwide mobile telephone operators, Cingular and
     T-Mobile use TDMA/GSM as their 2G digital technology, Verizon
     Wireless and Sprint Nextel use CDMA, and Sprint Nextel also uses
     iDEN on the former Nextel network.[^273] The four nationwide mobile
     carriers, together with other U.S. mobile carriers, have continued
     to deploy next-generation network technologies over the past year.

110. Verizon Wireless has deployed 1xRTT technology throughout
     "virtually all" of its network.[^274] In addition, since October
     2003, Verizon Wireless has launched EV-DO technology in 181
     markets, covering approximately 150 million people.[^275] With the
     EV-DO service, subscribers can access the Internet while mobile via
     a wireless modem card connected to a laptop computer or PDA, or
     they can download a range of multimedia content and advanced
     applications on certain mobile handset models.[^276] Furthermore,
     when EV-DO subscribers travel to other parts of the country where
     EV-DO networks have not been deployed, they can seamlessly roam on
     and access Verizon Wireless's 1xRTT network because the more
     advanced technologies on the CDMA migration path are backwards
     compatible.[^277] Verizon Wireless reports that its EV-DO delivers
     average user speeds of 400-700 kbps.[^278] Verizon Wireless plans
     additional market launches and an expansion of EV-DO coverage in
     existing markets in 2006.[^279]

111. Prior to its merger with Nextel in August 2005, the former Sprint
     had already deployed 1xRTT across its entire CDMA network
     footprint.[^280] In addition, Sprint had begun rolling out EV-DO
     technology in July 2005, initially deploying its EV-DO network to
     business districts and major airports in 34 U.S. cities.[^281] By
     the end of 2005, Sprint Nextel had deployed EV-DO in markets where
     approximately 50 percent of the U.S. population lives or
     works.[^282] The company plans to offer EV-DO-based services in
     additional markets in 2006.[^283] As noted in the *Ninth Report*,
     Sprint altered its technology strategy by deploying EV-DO, rather
     than waiting for a successor technology to become commercially
     available, in response to competitive pressure from Verizon
     Wireless's deployment of EV-DO.[^284] In addition to offering
     Sprint-branded wireless services over its CDMA network, Sprint
     Nextel provides Nextel postpaid and Boost Mobile prepaid wireless
     services over the former Nextel iDEN network.[^285] Sprint Nextel
     operates an iDEN network that serve 297 of the top 300 U.S. markets
     where approximately 270 million people live or work.[^286] In order
     to offer customers the benefits of all of its services, Sprint
     Nextel expects to introduce a dual-mode handset designed to operate
     on both the CDMA and iDEN network platforms.[^287]

112. Apart from the two nationwide CDMA carriers, some of the regional
     CDMA carriers have also begun to deploy EV-DO, including Alltel,
     Midwest Wireless, and Alaska Communications Systems. As noted in
     the *Tenth Report*, Alltel initially launched EV-DO in Akron and
     Cleveland, OH.[^288] During 2005, Alltel expanded its EV-DO
     deployments to include 12 markets, covering 20 percent of its
     POPs.[^289] Alltel plans to continue to expand EV-DO into
     approximately 60 percent of its markets by the end of 2006.[^290]
     In addition, Alltel's deployment of 1xRTT technology covers 92
     percent of its POPs, up from 50 percent in 2004.[^291] It plans to
     continue expanding its deployment of 1xRTT technology to cover 94
     percent of its POPs by the end of 2006.[^292]

113. As noted in the *Tenth Report*, when Cingular acquired AT&T
     Wireless in October 2004, the latter had already deployed UMTS (or
     WCDMA) in six U.S. cities: Seattle, San Francisco, Phoenix,
     Detroit, San Diego, and Dallas.[^293] In December 2005, Cingular
     commercially launched WCDMA with HSDPA in sixteen cities across the
     United States: Austin, Baltimore, Boston, Chicago, Dallas, Houston,
     Las Vegas, Phoenix, Portland, Salt Lake City, San Diego, San
     Francisco, San Jose, Seattle, Tacoma and Washington, DC.[^294] This
     included the replacement of the six WCDMA systems which had been
     previously deployed by AT&T Wireless.[^295] As noted in the *Tenth
     Report*, it has been reported that Cingular decided to upgrade
     WCDMA with HSDPA in an effort to compete with Verizon Wireless's
     EV-DO network, which offers speeds similar to or slightly below
     HSDPA and faster than WCDMA.[^296] As with the EV-DO service
     offered by Verizon Wireless and Sprint Nextel, subscribers on
     Cingular's WCDMA/HSDPA network can access the Internet while mobile
     via a wireless modem card connected to a laptop computer or PDA, or
     they can download a range of multimedia content and advanced
     applications on certain mobile handset models.[^297] In markets
     where WCDMA/HSDPA is not available, laptop modem cards that are
     compatible with both WCDMA/HSDPA and GPRS/EDGE will seamlessly fall
     back to Cingular's EDGE and GPRS networks, albeit at lower
     speeds.[^298] Cingular plans to continue deploying WCDMA with HSDPA
     throughout the majority of the largest U.S. metropolitan markets in
     2006.[^299] In addition to launching WCDMA with HSDPA and replacing
     the WCDMA systems deployed by AT&T Wireless, during 2005 Cingular
     continued the process of integrating the former AT&T Wireless
     GSM/GPRS/EDGE network with its own existing GSM/GPRS/EDGE network
     footprint in areas where they had overlapping coverage, a task
     Cingular expects to have substantially completed by the end of
     2006.[^300]

114. T-Mobile has a nationwide EDGE network but has not yet announced a
     schedule for deploying a next-generation network beyond EDGE.[^301]
     Analysts expect T-Mobile to launch a wireless broadband network in
     late 2007 or in 2008, provided T-Mobile is a successful bidder in
     the auction of AWS spectrum.[^302]

#### Coverage by Technology Type

115. Virtually the entire population of United States live in counties
     where operators offer digital mobile telephone service, using CDMA,
     TDMA/GSM, or iDEN (including their respective next generation
     technologies), or some combination of the three.[^303] These
     counties make up almost the entire land area of the United States.
     To estimate the current levels of deployment of the three main
     digital mobile telephone technologies individually, we have
     prepared maps of each technology, which combine the network
     coverage of all of the relevant operators.[^304] We have also
     prepared maps showing the extent of next generation network
     technology deployment.[^305]

116. CDMA has been launched in at least some portion of counties
     containing 284 million people, or roughly 99 percent of the U.S.
     population, while TDMA/GSM has been launched in at least some
     portion of counties containing 280 million people, or 98 percent of
     the U.S. population.[^306] To date, iDEN-based service is available
     at least some portion of counties containing over 268 million
     people, or approximately 94 percent of the U.S. population.[^307]

117. CDMA 1xRTT and/or 1xEV-DO has been launched in at least some
     portion of counties containing 283 million people, or roughly 99
     percent of the U.S. population, while GPRS, EDGE, and/or
     WCDMA/HSDPA has been launched in at least some portion of counties
     containing 269 million people, or about 94 percent of the U.S.
     population.[^308] The higher speed technologies, EV-DO and
     WCDMA/HSDPA, are available in counties containing 63 percent and 20
     percent of the U.S. population, respectively.

#### Data-Only Networks and Technology Deployment

118. In addition to the networks discussed above, which mobile telephone
     carriers use to offer both voice and data services, mobile carriers
     operate a number of other types of networks in order to provide
     IP-based broadband, as well as narrowband, data-only commercial
     mobile services.

119. Clearwire has launched wireless broadband service in 29 U.S. cities
     using Orthogonal Frequency Division Multiplexing (OFDM) and Time
     Division Duplex (TDD) technology, and spectrum in the 2.5 GHz
     BRS/EBS band.[^309] Because it allows signals to pass through
     buildings and trees, OFDM technology enables carriers to offer
     wireless broadband services without a direct line-of-sight between
     the transmitter and the receiver.[^310] Using OFDM technology,
     Clearwire has eliminated the need for customers to attach an
     antenna to their rooftop and instead allows them to access the
     Internet with "plug-and-play" modem devices connected to a personal
     or laptop computer. Customers can transport these devices to other
     locations where a network signal is available, and downstream
     speeds range from 768 kbps to 1.5 Mbps.[^311] Clearwire's equipment
     is developed and manufactured by its equipment subsidiary, NextNet
     Wireless, and Clearwire has announced that it will deploy wireless
     broadband equipment based on the IEEE 802.16e WiMax standard, which
     also employs OFDM technology, once the standard has been finalized
     and equipment becomes commercially available.[^312]

120. Sprint Nextel holds a significant amount of spectrum in the 2.5 GHz
     BRS/EBS band and, over the past year, has been testing different
     wireless broadband technologies, including WiMax, that could
     eventually be deployed in this spectrum.[^313] In February 2006,
     the company launched its FanView service which uses BRS/EBS
     spectrum to enable NASCAR^TM^ spectators to watch live race and
     audio at the races via customized mobile devices that can be rented
     at NASCAR^TM^ events.[^314]

121. As previously mentioned, BellSouth currently offers a
     non-light-of-sight, portable wireless broadband service using OFDM
     technology in five southern cities.[^315] The service allows
     wireless high-speed Internet access via a plug-and-play wireless
     modem device manufactured by Navini Networks.[^316] Downstream
     speeds range from 384 kbps to 1.5 Mbps.[^317]

122. Among the providers of narrowband mobile data services to
     enterprise customers, several carriers use paging spectrum to
     operate networks that offer traditional one-way paging services.
     Some paging carriers also operate data networks using narrowband
     PCS spectrum, which allow them to offer two-way messaging services.
     Narrowband PCS carriers use the ReFLEX technology protocol, which
     can transmit data at speeds ranging from 3.2 to 25 kbps.[^318] USA
     Mobility's narrowband PCS network uses ReFLEX technology developed
     by Motorola and covers 90 percent of the U.S. population.[^319]

123. In addition, Sprint Nextel's subsidiary, Velocita Wireless, and
     Motient operate two-way data network that use the 900 MHz SMR and
     800 MHz SMR spectrum bands, respectively. Velocita Wireless's
     network, known as Mobitex, uses packet-switched radio technology to
     provide always-on, two-way messaging and data delivery, and covers
     93 percent of the urban business population in the U.S.[^320] The
     DataTAC network includes more than 2,200 base stations and provides
     coverage in 400 U.S. cities covering 90 percent of the U.S.
     business population. In February 2006, Motient announced that it
     was modifying the DataTAC network to focus on on-street coverage
     and that in-building signal strength would diminish.[^321] Space
     Data is using narrowband PCS spectrum in the 900 MHz band and
     balloon-borne platforms, called SkySites^TM^, to offer wireless
     telemetry services to oil and gas companies in Texas, Louisiana,
     Oklahoma, New Mexico, and the Gulf of Mexico.[^322]

### Capital Expenditures

124. Capital expenditures, alternatively called "capital spending" or
     abbreviated to "capex," are funds spent during a particular period
     to acquire or improve long-term assets such as property, plant, or
     equipment.[^323] In the mobile telephone industry, capex consists
     primarily of spending to expand and improve the geographic coverage
     of networks, increase the capacity of existing networks so they can
     serve more customers, and improve the capabilities of networks (by
     allowing higher data transmission speeds, for example).[^324] One
     analyst estimated that the wireless industry spent roughly \$25
     billion on capex in 2005, an increase of 18 percent from the \$22
     billion spent in 2004, which in turn was on top of a 12 percent
     increase from 2003.[^325] One analyst has argued that capex spent
     to expand coverage is now mostly over and that future capex will be
     spent largely on technological upgrades and capacity needs.[^326]

### Roaming

125. All mobile calling plans specify a calling area -- such as a
     particular metropolitan area, a state, a region, the carrier's
     entire network, or the entire United States -- within which the
     subscriber can make a call without incurring additional charges.
     When a subscriber exits this area, or "roams," he or she may incur
     additional charges for each minute of use. Sometimes these roaming
     charges go directly to the subscriber's carrier, and sometimes the
     charges are used to pay a carrier other than the subscriber's, on
     whose network the subscriber was roaming.[^327] Roaming revenues
     account for a higher percentage of total service revenues for many
     rural and smaller regional carriers than for nationwide
     carriers.[^328] In the *Tenth Report*, we noted that the roaming
     revenues of these carriers were under pressure as roaming rates
     have declined and nationwide carriers continued to expand into
     smaller communities.[^329] In 2005, there was a reversal of this
     trend, as most of the regional and smaller carriers grew roaming
     revenues on a year-over-year basis for four consecutive quarters,
     with rural carriers showing particular improvement.[^330]

126. Nevertheless, CTIA reported that roaming revenues for the entire
     mobile telephone industry decreased over the past year, from \$4.2
     billion in 2004 to \$3.8 billion in 2005, roughly the level of
     2003.[^331] The contribution of roaming revenues to total service
     revenues continued its decline, from 4.1 percent in 2004 to 3.3
     percent in 2005, down from over 10 percent six years ago.[^332] One
     analyst explains that these trends are not surprising "given the
     fall in roaming rates as well as the consolidation activity in the
     wireless industry. Also, a smaller portion of revenues are
     classified as roaming, as compared to historical years, given the
     proliferation of much larger 'home' footprints and national pricing
     plans."[^333]

127. In May 2006, Sprint Nextel and Alltel announced a 10-year roaming
     deal that covers cellphone calls as well as new wireless data
     services.[^334] It has been argued that the roaming arrangement
     "could give Sprint an edge over competitor Verizon Wireless ... in
     the race to extend wireless broadband access to more American
     consumers" by enabling Sprint's customers to get access to Alltel's
     data services in areas where Sprint does not make those services
     available.[^335] From Sprint Nextel's standpoint, therefore, the
     roaming deal with Alltel may provide a means to overcome any
     first-to-market advantage Verizon Wireless gained by being the
     first nationwide CDMA carrier to launch a commercial EV-DO network.
     At the same time, since Alltel has a roaming deal with Verizon
     Wireless that covers voice service, one analyst also argues that
     the new roaming deal with Sprint Nextel gives Alltel "another
     option for a national roaming partner if Verizon Wireless tries to
     pressure it for higher rates when their roaming agreement is up in
     2011."[^336]

### Advertising and Marketing

128. Firms may engage in advertising and marketing either to inform
     consumers of available products or services or to increase sales by
     changing consumer preferences. Mobile telecommunications service is
     an "experience good,"[^337] and in general, advertising for an
     experience good tends to be persuasive rather than informational in
     nature.

129. In 2005, telecommunications ad spending for the top seven cellphone
     carriers dropped to \$4 billion from \$4.7 billion in 2004, or 14.6
     percent.[^338] Much of the falloff was due to the merger of Sprint
     and Nextel.[^339] The four nationwide operators spent a total of
     \$3.5 billion on advertising in 2005,[^340] with three being
     (through their parent corporations) among the top ten advertisers
     in the United States.[^341] Another analysis found that Cingular
     Wireless and Verizon Wireless were two of the top three brands (in
     terms of dollars spent on advertising) in the United States, ahead
     of American Express, Macy's, Wendy's, and The Home Depot.[^342]

### Quality of Service

130. Analysts stress that competition to attract and retain customers
     puts pressure on carriers to improve service quality. According to
     the senior director of wireless services at J.D. Power and
     Associates, "It's clear that wireless providers have made great
     strides in improving the quality of calls, especially in those
     areas that impact customer churn the most, such as calls that are
     dropped or disconnected. With an increasingly competitive
     environment and an increase in the number of services used in
     conjunction with a cell phone, carriers that offer superior network
     quality will improve their likelihood of attracting new customers
     and will increase customer retention. In fact, improving network
     quality is a beneficial financial incentive for wireless carriers,
     as customers experiencing at least one call quality problem are
     three times more likely to indicate they 'definitely will' switch
     carriers in the future."[^343] Similarly, an analyst with research
     firm In-Stat states that "People who are happy with their customer
     care are less likely to churn."[^344]

131. Carriers continue to rely on a diversified portfolio of strategies
     for improving their customers' wireless service experience. Network
     investment remains a key element of this portfolio. Section IV.B.1
     above of this report, as well as similar sections in previous
     reports, detail the digital and next-generation upgrades that
     carriers have been making to improve the coverage, capacity, and
     capabilities of their networks, while Section IV.B.2 provides an
     estimate of total spending by wireless carriers on network
     expansion and improvements. By increasing network coverage and call
     handling capacity and improving network performance and
     capabilities, carriers' investments in network deployment and
     upgrades have the potential to result in service quality
     improvements that are perceptible to consumers, such as better
     voice quality, higher call-completion rates, fewer dropped calls
     and deadzones, additional calling features, more rapid data
     transmission, and advanced data applications. As noted in the
     *Ninth Report*, one of the principal ways carriers have improved
     network coverage and quality is by increasing the number of cell
     sites.[^345] The *Tenth Report* added that carriers have been
     deploying micro-cell sites, or antennas that provide coverage in
     highly localized areas, to improve coverage in locations such as
     tunnels, airports, and certain neighborhoods, while some carriers
     have also used devices that amplify cellular signals, called
     repeaters, to improve indoor coverage in office buildings, shopping
     malls, and convention centers.[^346]

132. In addition to investing in their networks, carriers can increase
     capacity and improve service quality by acquiring additional
     spectrum. As detailed in Sections III.D and III.E.1 above, carriers
     have added to their spectrum holdings through the Commission's
     spectrum auctions, the purchase of licenses in the secondary
     market, and mergers and acquisitions. However, the *Tenth Report*
     cautioned that improvements in service quality tend to follow
     mergers with a lag due to the time it takes to complete the process
     of network integration.[^347] For example, the acquisition of AT&T
     Wireless in October 2004 provided Cingular with both an additional
     network of cell sites and significantly more spectrum.[^348] As of
     the end of 2005 Cingular was still in the process of fully
     integrating the two networks of former Cingular and AT&T Wireless
     in areas where they had overlapping coverage. In particular,
     Cingular has reported that nearly a third of the cell sites in
     these overlap areas were integrated by the end of 2005, and it
     expects to substantially finalize network integration by the end of
     2006.[^349] When completed, Cingular expects this network
     integration to improve the customer experience by producing a
     "combined network \[that\] will have higher average signal strength
     and greater network depth, thus improving network quality by
     reducing dropped and blocked calls, and enhancing the transmission
     quality."[^350]

133. In addition to investing in network infrastructure and acquiring
     spectrum, carriers continue to pursue marketing strategies designed
     to differentiate their brand from rival offerings based on
     dimensions of service quality such as superior network coverage,
     reliability, and voice quality. Verizon Wireless pioneered this
     brand differentiation strategy first with its "Can You Hear Me
     Now?" advertising campaign, and then with its "America's most
     reliable wireless network" slogan.[^351] As noted in the *Tenth
     Report*, a 2005 survey of wireless subscribers found that 40
     percent of Verizon Wireless customers indicated that network
     quality was their main reason for choosing Verizon Wireless.[^352]
     Beginning in 2006, Cingular launched an advertising campaign
     emphasizing it has the fewest dropped calls of any wireless
     carrier.[^353] According to one journalist specializing in consumer
     issues, "the advertising blitz by Cingular is further evidence that
     wireless carriers are shifting their marketing focus away from
     pricing toward network reliability, figuring that consumers are
     more concerned about calls going through than how much they
     cost."[^354] As indicated in the *Eighth Report*, brand
     differentiation works in tandem with quality-enhancing network
     investment to create a competitive advantage in attracting and
     retaining subscribers.[^355]

134. An alternative strategy adopted by T-Mobile to differentiate its
     service is to provide customers with more accurate information and
     assurances about service quality. As noted in the *Tenth Report*,
     T-Mobile has added an interactive "Personal Coverage Check" feature
     to its web site that enables customers to check the quality of
     network coverage where they live and work before they purchase
     service.[^356] T-Mobile's computerized mapping tool allows users to
     search on any street address or intersection in the United States
     and get a rating of the signal strength at that location and in the
     surrounding area. For each search, T-Mobile provides a color-coded
     map with eleven shades of coverage ranging from "none" to "great."
     According to T-Mobile, the top rating means that calls are rarely
     dropped.[^357] T-Mobile has also made its new interactive maps
     available on computers in its stores, with signs urging customers
     to "put our coverage to the test before you sign up."[^358] In
     contrast, although all carriers provide national or regional
     coverage maps to customers that show the cities where they provide
     some level of service, these coverage maps generally provide only a
     broad overview of a carrier's coverage. [^359] By discouraging
     potential customers who live or work in areas with poor reception
     from signing up, this innovation may result in a more positive
     wireless service experience for T-Mobile customers and thereby
     reduce churn and customer complaints.[^360]

135. Consumer satisfaction surveys afford one means of gauging the
     effects of carrier strategies for improving service quality on
     customer perceptions of service quality. Survey results and related
     evidence of customer satisfaction with cellphone service quality
     are summarized below in the section on mobile telecommunications
     market performance.[^361]

### Mobile Data Services and Applications

136. As documented in the *Ninth Report* and previous reports, the major
     mobile telephone carriers and other mobile data providers have
     progressively introduced a wide variety of mobile data services and
     applications.[^362] Currently, the largest segment of the mobile
     data market consists of handset-based applications marketed to
     consumers primarily as an add-on to mobile voice service, including
     text messaging ("SMS"), multimedia messaging services ("MMS") such
     as photo messaging, entertainment applications such as ringtones
     and games, and other content, such as customized web sites. A
     second market segment consists of monthly mobile Internet access
     packages for customers who wish to connect to wireless networks
     primarily or exclusively for data, rather than voice use, and who
     typically access the Internet through laptops or Personal Digital
     Assistants ("PDAs"). In the case of both handset-based services and
     Internet access service for laptops, it is also important to
     distinguish between mobile data services provided over wireless
     broadband networks using technologies such as EV-DO and
     WCDMA/HSDPA, and those provided over slower wireless networks using
     earlier technologies. As noted in the *Tenth Report*, wireless
     broadband network technologies enable laptop users to download
     files, play streaming video and audio, and receive emails at speeds
     that are comparable to what many users get from fixed broadband
     connections such as DSL, and the capabilities of handsets that can
     access wireless broadband networks make viewing streaming video and
     downloading various other applications on cellphones feel more like
     a broadband experience on a personal computer.[^363] In particular,
     the faster speeds offered by wireless broadband network
     technologies greatly enhance the viewing quality of video streamed
     onto cellphones by increasing the rate at which frames are
     shown.[^364]

137. In the past year carriers have continued to expand and enhance
     their mobile data offerings. A notable example is the introduction
     of an over-the-air music downloading service for mobile phones.
     Mobile telephone carriers had earlier begun selling cellphones that
     are able to play songs copied from personal computers or streamed
     from an online radio service, and they have been selling short
     clips of songs that can be downloaded onto mobile phones for use as
     ringtones since at least 2002.[^365] With the launch of Sprint
     Music Store™ in October 2005, Sprint became the first U.S. carrier
     to offer a service that allows customers to purchase and download
     full-length songs over a wireless telephone network directly onto
     their cellphones.[^366] Verizon Wireless launched a rival
     over-the-air music downloading service for cellphones called V CAST
     Music in January 2006.[^367] Although Sprint Music Store™ and
     Verizon Wireless's V CAST Music differ in a number of respects,
     they share certain features and capabilities -- for example, both
     services run on the carriers' respective wireless broadband
     networks based on EV-DO technology, both allow customers to
     transfer music from their computers to their cellphones and to
     download copies of the same song to both their cellphone and their
     personal computer for a single price, and both carriers market
     their music service as a competitor to online music downloading
     services such as Apple's iTunes Music Store. Cingular has said it
     will offer an over-the-air music downloading service later in
     2006.[^368] In the fall of 2005, Cingular began selling a cellphone
     called the ROKR that plays songs downloaded from Apple's iTunes
     Music Store, and also began offering a new radio service for mobile
     phones with MobiTV.[^369]

138. Mobile data competition intensified in the past year with two of
     the nationwide carriers launching wireless broadband services to
     compete with Verizon Wireless's EV-DO offerings, including a
     service based on a rival technology. As noted in the *Tenth
     Report,* Verizon Wireless has been offering a wireless Internet
     access service called BroadbandAccess over its EV-DO network for
     use on laptops with a special modem card since late 2003.[^370] In
     early 2005, Verizon Wireless launched a wireless multimedia service
     called V CAST that is also provided over the EV-DO network but is
     available on advanced handsets.[^371] Sprint Nextel launched
     competing EV-DO wireless data and multimedia offerings in the
     second half of 2005. The former Sprint began rolling out an
     EV-DO-based wireless Internet access service for use on laptop
     computers with a special modem card during July 2005, focusing
     initially on business corridors with high wireless-data traffic
     demands such as major airports and central business
     districts.[^372] In November 2005, Sprint Nextel launched a package
     of high-speed entertainment and data services called Power Vision
     that enables customers to use new multimedia phones to watch TV,
     download songs, receive information, and access other content at
     broadband-like speeds.[^373] The other nationwide carrier to begin
     offering commercial wireless broadband service in the past year is
     Cingular. In contrast to the EV-DO-based services offered by
     Verizon Wireless and Sprint Nextel, Cingular's mobile broadband
     offerings are based on WCDMA/HSDPA technology. Cingular launched a
     high-speed wireless data service for use on laptops with a modem
     card called BroadbandConnect in December 2005, becoming the first
     carrier in the world to launch a commercial HSDPA service.[^374]
     Cingular followed up in March 2006 with the launch of a streaming
     video service, called Cingular Video^TM^, which uses Cingular's
     WCDMA/HSDPA network to enable customers to watch video clips of
     television shows, sports, news, weather, and other content on
     advanced handsets.[^375]

139. Verizon Wireless has taken the lead in the data market as measured
     by the contribution of data to overall ARPU. In the fourth quarter
     of 2005, data accounted for 9.8 percent of Verizon Wireless's ARPU,
     followed by Sprint Nextel (9.7 percent), Cingular (9.6 percent),
     and T-Mobile (9.6 percent).[^376] In past years, the former Sprint
     was the market leader in pre-broadband wireless data
     services.[^377] However, the merger with Nextel brought Sprint into
     line with the other national carriers because data accounted for a
     relatively small percentage of Nextel's ARPU prior to the
     merger.[^378] Nevertheless, Sprint Nextel continues to sell more
     data services to its customers than its competitors. In the fourth
     quarter of 2005, Sprint Nextel customers spent an average of \$6
     per month on mobile data services, followed by T-Mobile customers
     (\$5.21), Verizon Wireless customers (\$4.85), and Cingular
     customers (\$4.71).[^379]

140. Another significant development during the past year was the
     introduction of broadband-speed mobile data offerings by a new
     class of MVNOs, including AMP'D, ESPN Mobile, and Helio, each of
     which is targeting a specific demographic with a premium data/video
     service offering.[^380] For example, ESPN Mobile offers a sports
     news and information service that runs on an EV-DO network using
     capacity leased from Sprint.[^381] The sports service offers
     subscribers a multimedia package that includes news, scores,
     statistics, videos, alerts, ESPN columnists, and other content.
     Although ESPN has offered scores and other sports data through
     other carriers, this particular package of sports news and
     information can only be accessed via ESPN phones and the ESPN
     service, and not through traditional facilities-based wireless
     carriers, including Sprint.[^382] Helio, a joint venture of the
     Internet company EarthLINK and Korean cellphone carrier SK Telecom,
     launched a service in May 2006 which aims to bring advanced Asian
     cellphone technology to the United States.[^383] Featuring South
     Korean phones that have not been available in the United States,
     Helio will target young, affluent customers with games, video
     clips, and other forms of entertainment, including a feature that
     allows customers to buy entertainment for their friends and have it
     sent to their cellphones.[^384]

# CONSUMER BEHAVIOR IN THE MOBILE TELECOMMUNICATIONS MARKET

141. A mobile carrier can exercise market power only to the extent that
     mobile subscribers do not respond to price increases or adverse
     changes in other terms of service. If, to the contrary, enough
     consumers are sufficiently well-informed to take prices and other
     non-price factors into account when choosing their service
     provider, and likewise, if enough consumers have the ability and
     propensity to switch service providers in response to an increase
     in price or other harmful conduct, then the carrier will have an
     incentive to compete on price and non-price factors. Consumer
     behavior will be more effective in constraining market power when
     the transaction costs subscribers incur in choosing and switching
     carriers are low. Transaction costs depend on, among other factors,
     subscribers' access to and ability to use information, and costs
     and barriers to switching carriers.

## Access to Information on Mobile Telecommunications Services

142. Wireless consumers continue to demand more information on the
     availability and quality of mobile telecommunications services, and
     numerous third parties have been responding to this demand by
     compiling and reporting such information. The *Eighth Report*
     enumerated the considerable sources of information available to
     consumers, including publications such as *Consumer Reports*, trade
     associations, marketing and consulting firms, and several web sites
     dedicated to giving consumers an overview and comparison of the
     mobile telephone services available in their area.[^385] These
     sources continue to update consumers on the wireless service
     options available to them. For example, the January 2006 issue of
     *Consumer Reports* magazine published the results of a new customer
     satisfaction survey on mobile telephone service.[^386]

143. In addition, the wireless industry itself has responded to this
     demand by launching various initiatives designed to educate
     consumers and help them make informed choices when purchasing
     wireless services. One early example of such an initiative, the
     voluntary "10-Point Consumer Code" sponsored by CTIA, was discussed
     in the *Ninth Report*.[^387] As noted above in Section IV.B.5,
     another example is the interactive "Personal Coverage Check"
     feature which T-Mobile added to its web site to enable customers to
     check the quality of network coverage where they live and work
     before they purchase service.

## Consumer Ability to Switch Service Providers

### Churn

144. Churn refers to the number of customers an operator loses over a
     given period of time. Mobile telephone operators usually express
     churn in terms of an average percent churn per month. For example,
     an operator might report an average monthly churn of 2 percent in a
     given fiscal quarter. In other words, on average, the operator lost
     2 percent of its customers in each of the quarter's three months.

145. Most carriers report churn rates between 1.5 percent and 3.0
     percent per month.[^388] Churn rates have shown a slight decline
     over the past year, continuing a trend we noted in the *Tenth
     Report*.[^389] However, this level of churn still creates
     significant challenges for the industry. For example, one analyst
     explained the effects of "high industry churn" in the following
     way: "A carrier with typical monthly churn of 2.5% will lose 30% of
     its customers each year. Replacing these subscribers just to
     maintain the subscriber base is a full time job, and this also
     explains why gross adds dwarf net adds in the wireless
     industry."[^390] Another analyst described churn as "the problem of
     this industry, wiping out 20% of the industry revenue."[^391]

### Local Number Portability

146. Local number portability (LNP) refers to the ability of users of
     telecommunications services to retain, at the same location,
     existing telecommunications numbers when switching from one
     telecommunications carrier to another.[^392] Thus, subscribers can
     port numbers between two CMRS carriers (intramodal porting) or
     between a CMRS and wireline carrier (intermodal porting). Under the
     Commission's rules and orders, covered CMRS carriers operating in
     the 100 largest Metropolitan Statistical Areas (MSAs) were required
     to begin providing number portability by November 24, 2003.[^393]
     CMRS carriers outside of the top 100 MSAs were required to be
     LNP-capable by May 24, 2004.[^394]

147. Wireless number porting activity since the advent of porting has
     been significant. Overall, approximately 20.4 million wireless
     subscribers ported their numbers to another wireless carrier from
     December 2003 through December 2005.[^395] Monthly rates of
     intramodal porting activity averaged about 812,000 ports during
     this period, and ranged from a low of 591,000 ports in February
     2004 to a high of 1,153,000 in June 2005.[^396] Porting data also
     show a slight increase in intramodal porting during this period,
     from 8.9 million ports (or a monthly average of nearly 743,000) in
     2004 to 10.6 million ports (or a monthly average of nearly 887,000)
     in 2005.[^397] The *Tenth Report* noted that monthly levels of
     intermodal porting from wireline carriers to CMRS carriers had
     increased significantly over 2004, from an average rate of nearly
     76,000 ports per month in the first six months of 2004 to an
     average rate of approximately 99,000 in the second half of the
     year.[^398] In contrast, the past year saw a reversal of this
     trend, with monthly levels of intermodal porting from wireline
     carriers to CMRS carriers declining first to an average rate of
     59,500 ports in the first six months of 2005, and then again to an
     average rate of approximately 37,000 ports in the second half of
     the year.[^399] Intermodal porting from wireless to wireline
     carriers, however, remained steady at 1,000-2,000 ports per month
     during 2005, roughly the same level as in 2004 and still
     significantly lower than wireline-to-wireless porting.[^400]

148. We noted in the *Ninth Report* that the advent of porting in late
     2003 did not lead to a significant increase in wireless churn, but
     did appear to have had a positive impact on service quality by
     inducing carriers to engage in aggressive customer retention
     efforts.[^401] An explanation offered by one analyst report for the
     aforementioned decline in churn rates suggests that this conclusion
     remained valid through 2005: "Significantly improved retention
     efforts (better deals on upgrade handsets, incentives for signing
     longer contracts, better customer service, and higher network
     spending) following the implementation of local number portability
     in November 2003, have led to lower churn rates, in our
     view."[^402]

# MOBILE TELECOMMUNICATIONS MARKET PERFORMANCE

149. The structural and behavioral characteristics of a competitive
     market are desirable not as ends in themselves, but rather as a
     means of bringing tangible benefits to consumers such as lower
     prices, higher quality and greater choice of services. Such
     consumer outcomes are the ultimate test of effective competition.
     To determine if these goals are met and whether there is still
     effective competition in the market, in this section we analyze
     various metrics including pricing levels and trends, subscriber
     growth and penetration, minutes of use ("MOU"), innovation and
     diffusion of services, and quality of service.

## Pricing Levels and Trends

### Pricing Trends

150. Equity analysts and other industry observers continue to describe
     wireless price competition in the United States as intense, so much
     so that one analyst asserted that "even a carrier with large market
     share in an area has very little pricing power."[^403] More
     recently, another analyst wrote that "Pricing yields have generally
     fallen fairly significantly . . . as operators have tried to match
     each other's pricing and features."[^404] However, wide variations
     in the non-price terms and features of wireless service plans make
     it difficult to characterize the price of mobile telephone service,
     and consequently it is difficult to identify sources of information
     that track mobile telephone prices in a comprehensive manner.[^405]
     As documented in previous reports, there is ample evidence of a
     sharp decline in mobile telephone prices in the period since the
     launch of PCS service. One analyst estimated that the average
     per-minute cost of wireless calling plunged 72 percent in the past
     five years alone.[^406]

151. Two indicators of mobile telephone pricing show that the long-term
     decline in the cost of mobile telephone services continued through
     2005.[^407] One study of mobile telephone pricing shows a slight
     increase in the cost of mobile telephone services in 2005.

152. According to one economic research and consulting firm, Econ One,
     mobile telephone prices in the 25 largest U.S. cities increased 1.4
     percent in 2005.[^408] The average cost of monthly service[^409] --
     which was calculated across four typical usage plans (200, 500, 800
     and 1100 minutes) -- increased from \$44.26 in December 2005 to
     \$44.90 in December 2006.[^410]

153. Another source of price information is the cellular telephone
     services component of the Consumer Price Index ("Cellular CPI")
     produced by the United States Department of Labor's Bureau of Labor
     Statistics ("BLS").[^411] Cellular CPI data is published on a
     national basis only.[^412] From 2004 to 2005, the annual Cellular
     CPI decreased by about 1.8 percent while the overall CPI increased
     by 3.4 percent. The Cellular CPI has declined 35 percent since
     December 1997, when BLS began tracking it.[^413]

154. As a third pricing indicator, some analysts believe average revenue
     per minute ("RPM") is a good proxy for mobile pricing.[^414] This
     is calculated by dividing a carrier's estimate of average monthly
     revenue per subscriber (often referred to as average revenue per
     unit, or "ARPU") by its estimate of MOUs, yielding the revenue per
     minute that the carrier is receiving.[^415] Using estimates of
     industry-wide ARPU and MOUs from CTIA's survey, we estimate that
     RPM fell 22 percent between December 2004 and December 2005. In the
     eleven years since 1994, RPM has fallen from \$0.47 in December
     1994 to \$0.07 in December 2005, a decline of 86 percent.[^416]

### Average Revenue Per Unit

155. ARPU is a widely used financial metric in analyzing the mobile
     telephone sector. Since 1999, following a decade of declines,
     CTIA's estimate of ARPU began increasing, rising to \$50.64 in
     December 2004, a 28 percent increase from the low of seven years
     ago.[^417] However, in the last year, ARPU declined slightly to
     \$49.98. Analysts attribute this decline to a variety of factors,
     including further declines in the per-minute price of mobile calls
     due to more offers of free minutes and other promotions,[^418] an
     increase in the share of subscribers who typically spend less per
     month on mobile calls (such as prepaid and family plan
     customers),[^419] and a decrease in the elasticity of demand below
     one.[^420] In particular, if elasticity of demand falls below one,
     increased usage will not be sufficient to offset per-minute price
     declines, causing ARPU to drop in response to a drop in price. As
     one analyst wrote, "Elasticity below one means that cheaper minutes
     are no longer driving high enough incremental usage to support
     ARPUs."[^421]

156. In the last quarter of 2005, data accounted for almost 10 percent
     of ARPU for each of the four nationwide carriers, almost twice the
     percentage of a year earlier.[^422] While the growth in data
     revenue has been significant, it has not been large enough to
     offset the decline in voice revenue. As one analyst wrote, "we feel
     the jury is still out on how successful next-gen data will be in
     driving profitable growth."[^423]

## Quantity of Services Purchased

### Subscriber Growth

#### Mobile Telephony

157. Since the *Seventh Report*, in an effort to improve the accuracy of
     its estimate of U.S. mobile telephone subscribership, the
     Commission began analyzing information filed directly with the FCC.
     This information, the NRUF data,[^424] tracks phone number usage
     information for the United States.[^425] All mobile wireless
     carriers must report to the FCC which of their phone numbers have
     been assigned to end-users, thereby permitting the Commission to
     make more accurate estimates of subscribership.[^426] In previous
     years, for the purposes of this report, the Commission had relied
     on national subscribership data from a highly-respected survey
     conducted by CTIA.[^427] While the Commission now uses NRUF data as
     the basis for its estimate of mobile telephone subscribership for
     the purposes of this report, we continue to report the CTIA data as
     a benchmark for comparison.[^428]

158. As of December 2005, we estimate that there were 213.0 million
     mobile telephone subscribers,[^429] up from 184.7 million at the
     end of 2004, which translates into a nationwide penetration rate of
     71 percent.[^430] This addition of 28.3 million subscribers was a
     17 percent increase from the 24.1 million added in 2004, and a 51
     percent increase over the 18.8 million added in 2003.[^431] In the
     last three years alone, the total mobile telephone subscriber base
     has increased 50 percent.

159. CTIA's estimate for year-end 2005 was 207.9 million subscribers, a
     12 percent increase over its estimate of 182.1 million subscribers
     as of year-end 2004.[^432] CTIA's estimate shows a similar surge in
     subscriber growth, with the increase of 25.8 million subscribers
     shown by its 2005 survey its largest ever.[^433]

160. Similar to our findings in the *Tenth Report*, analysts attribute
     this high subscriber growth to the attractiveness of innovative
     service models such as prepaid and family plans -- which target
     previously underserved markets such as youth and the
     credit-challenged -- as well as wireless substitution.[^434]

161. Digital subscribers made up more than 98 percent of all wireless
     subscribers at the end of 2005, [^435] leaving approximately 3.2
     million analog-only mobile telephone subscribers.[^436]

#### Mobile Data

162. The adoption of mobile data services by U.S. mobile telephone
     subscribers continued to rise in the past year. Based on consumer
     billing records, Telephia estimates that mobile data usage reached
     approximately 50 percent of U.S. mobile subscribers in the fourth
     quarter of 2005, up from 43 percent in the first quarter of
     2005.[^437] This compares with earlier estimates of mobile data
     adoption of between 33 and 40 percent of the customer base of
     several large individual wireless carriers in the fourth quarter of
     2004, and approximately 25 percent of U.S. mobile subscribers as of
     early 2004.[^438]

163. The popularity of mobile data services varies by type of
     application, with text messaging, or SMS, maintaining its lead as
     the most popular application. According to Telephia, consumer
     billing records indicate that an estimated 41 percent of mobile
     subscribers used text messaging on their cellphones in the fourth
     quarter of 2005, 22 percent paid to access the web via their
     wireless device, 13 percent used multimedia messaging, and 11
     percent downloaded content from their cellphones.[^439] In contrast
     with Telephia's methodology, research firm M:Metrics measures the
     consumption of mobile content and applications based on monthly
     surveys of mobile subscribers rather than consumer billing records.
     Using this methodology, M:Metrics estimates that 34.9 percent of
     U.S. mobile subscribers sent text messages in the first quarter of
     2006, 10.9 percent used photo messaging, 9.9 percent browsed news
     and information, 9.9 percent purchased ringtones, 7.1 percent used
     personal email, 6.3 percent used mobile instant messenger, 4.1
     percent used work email, 3.7 percent purchased wallpaper or
     screensavers, and 2.7 percent downloaded a mobile game.[^440]
     Similarly, 37 percent of the respondents to the annual survey of
     cellphone users conducted in September 2005 by *Consumer Reports*
     magazine said they were using text messaging, while only 12 percent
     of the respondents reported that they had used their cellphones for
     emailing.[^441]

164. Estimates from other sources show similar levels of adoption of
     particular applications. Telephia estimates that the number of
     mobile game buyers in the United States grew to 5 million in March
     2006, or approximately 2.4 percent of mobile subscribers, a 44
     percent increase from nearly 3.5 million in January 2006.[^442]
     Cingular reports that more than 7.5 million of its subscribers, or
     14 percent of the total, browse the Internet monthly.[^443] Yankee
     Group estimates that about 11 million wireless customers, or 6
     percent of the total, actively use picture-messaging
     services.[^444] Moreover, Gartner estimates that about 47 percent
     of cellphones sold in the U.S. in 2005 are camera phones, up from
     21 percent in 2004 and 6 percent in 2003.[^445] Yankee Group also
     estimates that one million people were subscribers to TV services
     on their cellphones at the end of 2005.[^446] One of these
     services, called MobiTV, has attracted more than 500,000
     subscribers since launching its live video programming service for
     mobile phones.[^447] More recently, Telephia research shows that
     more than 2 million wireless customers, or 1.4 percent of the U.S.
     wireless user base, subscribed to a mobile video plan during the
     first quarter of 2006.[^448]

165. With the launch of wireless broadband services based on EV-DO or
     WCDMA/HSDPA technologies by three of the nationwide carriers and
     some smaller regional carriers, the number of subscribers using
     mobile data services at broadband-like speeds has also been
     growing. Since special handsets with advanced capabilities ("3G
     handsets") or special modem cards for laptop computers ("3G PC
     cards") are needed to access wireless broadband networks based on
     EV-DO and WCDMA/HSDPA technologies, one method of estimating the
     number of wireless broadband users is based on the number of 3G
     handsets in service and the number of 3G PC cards in use.[^449]
     However, not all 3G handset owners are subscribers to wireless
     broadband services because, as Morgan Stanley analysts put it,
     "many of the handsets are being purchased for their fashion or
     "cool" factor, rather than their broadband capabilities."[^450]
     Morgan Stanley estimates there were 2.3 million 3G handsets in
     service in the United States at the end of 2005, but only about
     half of these customers were actually paying for wireless broadband
     service.[^451] Morgan Stanley also estimates there were many more
     than 2.3 million 3G PC cards in use at the end of 2005, but
     cautions that this will prove to be a niche market with smaller
     growth opportunities than 3G handset sales.[^452]

166. In contrast with text messaging and other handset-based mobile data
     applications, subscriber numbers for paging continue to drop. Using
     NRUF data, we estimate there were 8.3 million paging units in
     service as of the end of 2005, down from 8.5 million paging units
     at the end of 2004, 11.2 million units at the end of 2003, and 14.1
     million units at the end of 2002.[^453]

#### Satellite

167. According to satellite industry analysis firm TelAstra, estimates
     place the number of subscribers to mobile satellite telephone
     services worldwide, including the United States, at 1.1 million at
     the end of 2005, up from the estimate of 892,000 subscribers cited
     in the *Tenth Report*.[^454]

### Minutes of Use

168. Wireless subscribers continue to increase the amount of time they
     communicate using their wireless phones. Average minutes-of-use per
     subscriber per month ("MOUs") jumped again in 2005, to 820 minutes,
     or more than 13 hours of use, for the average subscriber of a
     nationwide operator in the last quarter of the year.[^455] This is
     an increase of 110 MOUs, or almost two hours of additional use,
     from a year earlier.[^456] Sprint Nextel, the nationwide operator
     with the highest MOUs, averaged over 1,000 MOUs per month per
     subscriber for most of the year.[^457]

169. According to CTIA, MOUs averaged 740 between June and December
     2005, an increase of 21 percent from the average of 584 MOUs
     reported during the same period in 2004.[^458] Increasing MOUs are
     most likely a result of the demand-stimulating effect of falling
     prices and the wider acceptance of and reliance upon wireless
     service.[^459]

### Mobile Data Usage

170. Data on the use of handset-based mobile data applications are
     fragmentary and their availability varies with the particular type
     of application. By a number of indicators, however, handset-based
     mobile data applications have been gaining popularity among U.S.
     mobile subscribers. For example, the volume of SMS traffic
     continued to increase at a rapid pace in the past year. According
     to CTIA, more than 9.76 billion SMS messages were reported for the
     month of December 2005, more than double the nearly 4.66 billion
     messages reported for the month of December 2004.[^460] In addition
     to tracking the volume of SMS messages sent in June and December of
     each year, beginning with the second half of 2004 CTIA now collects
     SMS traffic volumes for the entire six-month period of its
     semi-annual survey. The reported SMS traffic volume for the period
     July through December 2005 was 48.7 billion messages, nearly double
     the 24.7 billion messages reported in the same period of
     2004.[^461] For 2005 as a whole, reported SMS traffic volumes
     (including Instant Messaging and text messaging) were 81
     billion.[^462]

171. While text messaging continues to be the most widely used type of
     messaging service, the volume of photo messaging and other
     multimedia messaging services is also growing. CTIA initiated
     coverage of MMS traffic volumes this year, and although prior CTIA
     estimates are unavailable for comparison, more than 1.1 billion MMS
     messages were reported for 2005.[^463] Figures reported by
     individual carriers do show increased MMS traffic volumes. Cingular
     reports that it delivered 91 million multimedia messages in the
     first quarter of 2006, up from 30 million multimedia messages that
     were sent or received by its customers in the first quarter of
     2005.[^464] Verizon Wireless reports that its customers exchanged
     more than 171 million picture and video messages in the first
     quarter of 2006, up from 41.4 million multimedia messages during
     the first quarter of 2005.[^465]

172. Entertainment applications such as ringtones and games also
     continued to grow in popularity. Telephia estimates that U.S.
     wireless consumers purchased more than 8.2 million games on their
     cellphones in March 2006, up 53 percent from nearly 5.4 million
     games in January 2006.[^466] Performance rights organization BMI
     estimates that U.S. retail sales of mobile phone ringtones grew to
     \$500 million in calendar year 2005, up from \$245 million in 2004
     and \$68 million in 2003.[^467] BMI expects additional music-based
     revenues to come from the newly launched over-the-air music
     downloading services. Since its launch at the end of October 2005,
     the Sprint Music Store's number of over-the-air song downloads
     passed the two million mark in April 2006, after hitting one
     million downloads in February 2006.[^468]

### Sub-National Penetration Rates

173. NRUF data is collected on a small area basis and thus allows the
     Commission to compare the spread of mobile telephone subscribership
     across different areas within the United States.[^469] EAs, which
     are defined by the Department of Commerce's Bureau of Economic
     Analysis, are particularly well-suited for comparing regional
     mobile telephone penetration rates for two reasons.[^470] First,
     the defining aspect of mobile telephone is, of course, mobility.
     Each EA is made up of one or more economic nodes and the
     surrounding areas that are economically related to the node. The
     main factor used in determining the economic relationship between
     the two areas is commuting patterns, so that each EA includes, as
     far as possible, the place of work and the place of residence of
     its labor force.[^471] Thus, an EA would seem to capture the market
     where the average person would shop for and purchase his or her
     mobile phone most of the time -- near home, near the workplace, and
     all of the places in between. Second, wireless carriers have
     considerable discretion in how they assign telephone numbers across
     the rate centers in their operating areas.[^472] In other words, a
     mobile telephone subscriber can be assigned a phone number
     associated with a rate center that is a significant distance away
     from the subscriber's place of residence or usage (but generally
     still in the same EA).[^473]

174. Regional penetration rates for the 172 EAs covering the 50 United
     States, sorted by EA penetration rate, can be seen in Appendix A,
     Table 3.[^474] The rates range from a high of 95 percent in the
     Fort Myers-Cape Coral, FL EA (EA 32) to a low of 41 percent in the
     Northern Michigan, MI EA (EA 58). There are 71 EAs, with a combined
     population of 208 million, in which penetration rates exceed 70
     percent, and 4 EAs, with a combined population of 151 million, in
     which penetration rates exceed 90 percent. Only 7 EAs, with a
     combined population of 2 million, have penetration rates under 50
     percent. The Anchorage, AK EA (EA 171), with the lowest population
     density, had a penetration rate of 57 percent, while the Tampa-St.
     Petersburg-Clearwater, FL EA (EA 34), with the highest density, had
     a penetration rate of 85 percent. As previously stated, based on an
     analysis of NRUF data, the national penetration rate is 71 percent.

## Quality of Service

175. To evaluate the quality of service, this section summarizes the
     results of relevant consumer surveys and reports on the incidence
     of customer complaints. When examining such indicators of the
     quality of mobile telephone service, it is important to keep in
     mind that they are based on consumers' subjective perceptions of
     service quality. There are several points to note in this regard.
     First, mobile telecommunications services are experience goods, and
     therefore the quality of a particular product is unknown until the
     consumer actually uses it. Second, the perceived quality of any
     good or service depends partly on its price, and a consumer's
     evaluation of the relationship between price and quality determines
     his or her level of satisfaction. As stated in one survey of
     cellular customer satisfaction, "When customers make a purchase,
     they are choosing a price/quality package that they expect to meet
     their needs and desires. Ordinarily, higher price is associated
     with higher quality."[^475]

176. Third, consumer perceptions can change independently of actual
     changes in network performance as their expectations evolve. In
     this regard, the president of Telephia, a provider of performance
     measurement information to the mobile telecommunications industry,
     has observed that "\[t\]he fact that consumer satisfaction has not
     increased in response to these large quality improvements \[in
     wireless service\] speaks to rising expectations among wireless
     consumers. These rising expectations are driven by consumers'
     desire to use their phones more often, in more places and for more
     applications."[^476]

177. Finally, service quality in this market is dependent on when and
     where the service is used. In this regard, service quality concerns
     may stem from customer expectations that mobile phone service
     should be available at all times and at all points within the
     coverage area. Many mobile phone providers make maps of their
     service areas available to their subscribers either at their
     service stores or on their web sites. These maps typically contain
     disclaimers to the effect that the maps only show approximate
     coverage areas and are not a guarantee of coverage, or warnings
     that even in areas with a strong signal, service may be adversely
     affected by the volume of traffic on the network.[^477]
     Nevertheless, customers may expect to be able to complete all calls
     and use all services within the entire service areas shown on the
     maps. When the full range of expected services is not available,
     consumer expectations may not be met.

178. J.D. Power and Associates conducts three different surveys of
     wireless users that measure various dimensions of service quality:
     the U.S. Wireless Regional Customer Satisfaction Index Study
     ("Wireless Customer Satisfaction Study"); the Wireless Call Quality
     Performance Study ("Wireless Call Quality Study"); and the Wireless
     Customer Care Performance Study ("Wireless Customer Care
     Study").[^478] The Wireless Customer Satisfaction Study measures
     customer satisfaction broadly based on a number of criteria,
     including call performance and customer service. In contrast, the
     other two studies are narrowly focused on measuring call
     performance and customer care, respectively. In addition to
     measuring the performance of the wireless industry as a whole, each
     study also ranks carriers based on their individual performance.

179. The Wireless Customer Satisfaction Study measures customer
     satisfaction based on 42 specific service-related measures grouped
     into six key factors that impact overall wireless carriers'
     performance. These six factors are, in order of importance: call
     performance and reliability (26 percent); customer service (17
     percent); service plan options (17 percent); brand image (14
     percent); cost of service (14 percent); and billing (12 percent).
     Based on the results of this survey over the past three-year
     period, J.D. Power and Associates concludes that overall
     satisfaction has fluctuated significantly with major changes in the
     industry such as competitive expansion, regulatory programs, and
     mergers.[^479] As detailed below, however, the most recent survey
     shows an upward trend in overall customer satisfaction.

180. According to the results of the 2006 Wireless Customer Satisfaction
     Study, overall satisfaction with wireless service providers has
     increased significantly from 2005.[^480] In particular, the 2006
     study found that satisfaction has improved three percent from 2005,
     with service plan options and cost of service factors receiving the
     largest increase in satisfaction ratings over 2005 levels.[^481]
     J.D. Power and Associates argues that these particular improvements
     have occurred in areas where the industry has been aggressively
     marketing new services and offering more attractive pricing
     options. According to the senior director of wireless services at
     J.D. Power and Associates, "expanded service offerings and
     aggressive service plan pricing have resulted in more positive
     overall wireless service experiences" for customers.[^482]

181. The improvement in overall satisfaction shown by the 2006 Wireless
     Customer Satisfaction Study follows a significant downturn in
     overall satisfaction in 2005. In particular, the 2005 Wireless
     Customer Satisfaction Study found that overall satisfaction with
     the performance of wireless service providers decreased ten percent
     over 2004, the largest year-over-year change since the study's
     inception.[^483] In contrast, the 2004 Wireless Customer
     Satisfaction Study showed a five-percent increase in overall
     satisfaction over 2003.[^484] In the 2005 Wireless Customer
     Satisfaction Survey, J.D. Power and Associates singled out the
     recent large wireless mergers as the key factor behind the downturn
     in customer satisfaction in 2005. In particular, the company notes
     that "as past experience has shown, mergers, at least in the
     short-term, negatively impact customer attitudes and perceptions
     with their wireless service, creating a sense of confusion and
     uncertainty."[^485] The company adds that those carriers directly
     involved in a merger are most affected, with Nextel and Sprint
     experiencing the largest declines compared to their overall
     satisfaction index ratings in 2004. Nevertheless, the company
     argues that the negative impact of mergers on customer attitudes
     explains why even carriers not involved in mergers experienced some
     decline in overall satisfaction from 2004. The rebound in overall
     customer satisfaction in the 2006 Wireless Customer Satisfaction
     Study appears to confirm that the initial impact of mergers on
     customer perceptions of their wireless service experience tends to
     be short-lived.

182. The Wireless Call Quality Study measures the number of problems
     experienced with wireless call quality on a semi-annual basis. Call
     quality is measured based on seven customer-reported problem areas
     that impact overall carrier performance. These areas are:
     dropped/disconnected calls; static/interference; connection on
     first try; voice distortion; no echoes; no immediate voice mail
     notification; and no immediate text message notification.
     Consistent with the improvement in overall customer satisfaction
     suggested by the 2006 Wireless Customer Satisfaction Study, the
     J.D. Power and Associates 2006 Wireless Call Quality Study found
     that the overall rate of customers experiencing a wireless call
     quality problem declined for a second consecutive year, with
     reported problems per 100 calls reaching the lowest level since the
     inaugural study in 2003.[^486] In particular, the study found that
     the percentage of wireless calls with at least one problem has
     declined from 26 per 100 calls in 2005 to 24 per 100 calls in the
     2006 study, an eight percent improvement.[^487] Moreover, the
     number of wireless calls that involved a problem declined by 15
     percent by comparison with the results of the 2004 (30 per 100
     calls) and 2005 studies. J.D. Power and Associates attributes the
     improvement in the quality of calls to competitive pressure on
     carriers to attract and retain customers.

183. In addition to the decline in overall call quality problems, the
     2006 Wireless Call Quality Study concluded that considerable
     improvements have been made in the areas of dropped/disconnected
     calls and calls with voice distortion. The number of
     dropped/disconnected calls decreased by 15 percent when compared to
     the 2005 study, while the number of calls experiencing voice
     distortion decreased by 25 percent when compared to 2005.[^488]
     However, the 2006 Wireless Call Quality Study also found that
     overall call quality performance varies based on where a call is
     placed or received. In particular, wireless calls within a local
     calling area have significantly lower reported problems (27 per 100
     calls) when compared to calls placed or received while roaming (55
     per 100 calls).[^489] Moreover, users typically experience fewer
     problems with outdoor wireless calls than with calls placed inside
     of buildings, particularly calls made from home.

184. Finally, the Wireless Customer Care Study measures wireless
     provider customer care performance based on customer experiences
     with three point-of-contact methods: telephone with a service
     representative and/or automated response system ("ARS"); walk-in at
     a retail store; and online Internet connection. For each contact
     method, processing issues such as problem resolution efficiency and
     hold-time duration are also measured. The 2006 Wireless Customer
     Care Study found that wireless customers contact their service
     provider an average of 1.94 times by phone to resolve an issue or
     problem, the highest level since measurement of the average problem
     resolution frequency ("PRF") rate began in 2000.[^490] The average
     PRF rate was 1.36 in 2000 and has climbed steadily since then at an
     average annual rate of 14 percent. According to J.D. Power and
     Associates, the main factors contributing to this increase are not
     only the rise of new wireless services and products, but also the
     complexity of using new products such as photos and video clips,
     ringtones, and other more advanced wireless data applications. The
     introduction and spread of these products "puts pressure on the
     carrier's service representative to understand the issue or problem
     and try and get the inquiry resolved in a timely manner."[^491] The
     senior director of wireless services at J.D. Power and Associates
     argues that because of the increased difficulty of ensuring that
     the customer service representative is fully trained and kept
     apprised on the latest products, carriers that succeed in
     encouraging customers to try new wireless services may run the
     downside risk of decreasing customer satisfaction and losing
     customers to other carriers.

185. The 2006 Wireless Customer Care Study also made a number of
     findings regarding customer care patterns.[^492] First, more than
     one-half (52 percent) of wireless users have contacted the customer
     service department for assistance within the past year, a slight
     decrease from 2005 (54 percent). Second, among those who contact
     their carriers, 71 percent do so via telephone and 25 percent
     through their carrier's retail stores, with email and Internet
     connections accounting for only 4 percent. Third, the average
     initial reported hold time on calls to the customer service
     department is 3.57 minutes, an increase from 3.44 minutes in 2005.
     In contrast, on average a customer waits more than nine minutes
     before speaking to a representative at a retail store. Finally,
     more than four in ten users (42 percent) contact their carrier with
     a service inquiry that is related to billing, one-half of which are
     due to incorrect charges. An additional one-third of all customer
     care inquiries are related to call quality. A consumer satisfaction
     survey commissioned by industry initiative MyWireless.org was
     conducted via telephone in February 2006 by McLaughlin &
     Associates.[^493] This survey found that more than 85 percent of
     the cellphone users polled are satisfied with their cellphone
     service.

186. *Consumer Reports* magazine conducted its most recent annual survey
     of cellphone users in September 2005.[^494] The *Consumer Reports*
     survey is similar in approach to the J.D. Power and Associates
     Wireless Customer Satisfaction Study in that it asks respondents
     about a number of dimensions of service quality, including the
     quality of their calls, how well their inquiries or complaints were
     handled, and billing problems. The 2005 *Consumer Reports* survey
     found the overall satisfaction score for wireless carriers to be
     essentially unchanged from the result of the 2004 survey at
     67.[^495] As in 2004, this overall score ranks wireless carriers
     below services such as hotels, supermarkets, digital cable TV, and
     HMOs in terms of how well they please the consumer.[^496]
     Nevertheless, the responses to certain questions show some
     improvement over the 2004 survey results. In particular, while only
     47 percent of the respondents to the 2005 survey said that they
     were either completely satisfied or very satisfied with their
     cellphone service, this was slightly up from 45 percent of
     respondents to the 2004 survey.[^497] In addition, 31 percent of
     respondents said they were seriously considering changing their
     providers, down from 35 percent in 2004.[^498] Of those who had
     changed providers in the past three years, the top reasons given
     were poor phone service (54 percent) and price (36 percent).

187. The Commission releases a report on the informal inquiries and
     complaints processed by its Consumer & Governmental Affairs Bureau
     ("CGB") four times a year. Since consumers who submit complaints
     are self-selected, the data in these reports are not representative
     of the U.S. population or mobile phone customers as a whole. The
     report on consumer inquiries and informal complaints during the
     fourth quarter of calendar year 2005 was issued on February 16,
     2006.[^499] Of the services regulated by the FCC, wireless services
     ranked third behind radio and television broadcasting and wireline
     telecommunications in terms of number of complaints during the
     reporting period. Of the 71,194 complaints registered in the fourth
     quarter, wireless complaints accounted for 4,956, or nearly 7
     percent of the total. This represented a decline from the number of
     wireless complaints recorded in the first (7,330 complaints),
     second (6,783), and third (6,873) quarters of 2005.[^500]

188. There were declines in each of the five wireless categories as
     compared with the previous three quarters. Of the 4,956 complaints
     from wireless consumers, service quality ranked second behind
     billing and rates in terms of the number of complaints during the
     reporting period. In particular, 2,480 complaints were related to
     billing and rates, 865 complaints were related to service quality
     issues, 699 complaints were related to contract and early
     terminations issues, 559 complaints were related to carrier
     marketing and advertising, and the remaining 353 complaints were
     related to equipment issues. For purposes of the report, service
     quality addresses a broad range of disputes and inquiries regarding
     quality of service or the lack of coverage within a geographic area
     served by a wireless provider, including dead zones, dropped calls,
     overall quality of service within the subscriber's local calling
     area, network busy signal, and roaming availability.

## International Comparisons

### Mobile Voice

189. This section compares mobile market performance in the United
     States, Western Europe and Asia-Pacific countries of comparable
     income levels with regard to mobile penetration, usage, and
     pricing.[^501] To ensure that a consistent methodology is used to
     compile the data for different countries, the comparison is based
     on international cross-section data compiled by Merrill
     Lynch.[^502] Consequently, the estimates of mobile penetration,
     MOUs, and revenue per minute in the United States cited in this
     section may differ somewhat from estimates provided in previous
     sections of the report because they come from different
     sources.[^503] As in the *Tenth Report* and previous reports, this
     comparison shows three major differences between the U.S. mobile
     market and comparable mobile markets abroad.[^504] First, mobile
     penetration is still higher in Western Europe and developed
     Asia-Pacific countries than in the United States. Second, the
     United States continues to lead the world in average minutes of use
     per subscriber. Third, mobile calls continue to be significantly
     less expensive on a per minute basis in the United States than in
     Western Europe and Japan.

190. Mobile penetration averaged an estimated 103.5 percent in Western
     Europe at the end of 2005.[^505] In most West European countries,
     estimated mobile penetration exceeded 100 percent at the end of
     2005 due in part to greater use of prepaid service plans and
     multiple subscriber identity module ("SIM") cards.[^506] As in
     years past, France finished 2005 with the lowest mobile penetration
     rate in Western Europe at 79 percent.[^507] Thus, as in previous
     years, U.S. mobile penetration at the end of 2005, at approximately
     70 percent,[^508] was lower than the lowest mobile penetration rate
     in Western Europe.

191. Japan finished the year with a mobile penetration level of 74
     percent,[^509] lower than the lowest penetration rate in Western
     Europe but somewhat higher than the U.S. level. In comparison,
     year-end mobile penetration rates in a number of other
     Asian-Pacific countries were within the range of European levels,
     including Australia (94.6 percent), South Korea (79 percent), Hong
     Kong (106 percent), and Singapore (98 percent).[^510]

192. The United States widened its lead in mobile voice usage in 2005,
     with average MOUs estimated to be approximately 798 per month in
     the fourth quarter of 2005.[^511] This compares with an average
     across Western Europe of 142.6 MOUs, and estimates in individual
     countries that range from a high of 279 in Finland to a low of 81
     in Germany.[^512] MOUs in comparable Asian-Pacific countries were
     generally higher than the Western European average, but still well
     below the U.S. figure, including Japan (147), Australia (178),
     South Korea (321.6), Hong Kong (395), and Singapore (313).[^513]

193. As noted above, some analysts regard average revenue per minute as
     a good proxy for mobile pricing.[^514] Revenue per minute in
     Western Europe averaged \$0.22 in the fourth quarter of 2005, and
     ranged from a high of \$0.36 in Switzerland to a low of \$0.11 in
     Finland, with most countries clustered in the range between \$0.17
     and \$0.23.[^515] At \$0.07, average revenue per minute in the
     United States during the same period remained less than one-third
     of the European average despite significant declines in most
     Western European countries.[^516] Revenue per minute in Japan, at
     \$0.27, was nearly four times the U.S. figure at the end of 2005
     and also higher than the European average, but lower than the
     European high of \$0.36 in the Swiss mobile market.[^517] In
     contrast, revenue per minute was nearly as low in some Asian
     countries as in the United States, including South Korea (\$0.10)
     and Singapore (\$0.08).[^518] At \$0.04, Hong Kong continues to
     have the only comparable mobile market with lower revenue per
     minute than the United States.[^519]

194. One of the reasons revenue per minute is higher in Western Europe
     and Japan than in the United States is that the calling party pays
     system used throughout Western Europe and in Japan tends to give
     mobile operators the ability and the incentive to set mobile
     termination charges that are high relative to those in the United
     States and other countries that use the mobile party pays
     system.[^520] In addition, because these higher mobile termination
     charges are absorbed by the calling party, the calling party pays
     system may also reduce usage relative to mobile party pays system
     by increasing the cost of calls to mobile phones.[^521] Based on a
     regression analysis of international cross-section data for
     countries with high per capita income, economist Stephen
     Littlechild finds that a mobile party pays system significantly
     reduces average revenue per minute (by about twelve cents per
     minute compared to a calling party pays system), while
     significantly increasing average usage (by about 143 minutes per
     month).[^522]

195. Apart from the effects of a calling party pays system on mobile
     termination charges, analysts have argued that intense competition
     led U.S. mobile operators to price aggressively through bucket
     plans and various promotions, driving prices down well below levels
     in Western Europe and Japan.[^523] Accordingly, the results of this
     international comparison can be interpreted as evidence that the
     U.S. mobile market is effectively competitive relative to mobile
     markets in Western Europe and also Japan.

### Mobile Data

196. The percentage of mobile service revenues from data services
     continues to be higher in Western Europe and parts of Asia than in
     the United States.[^524] In the fourth quarter of 2005 revenues
     from mobile data services contributed an estimated 16.5 percent of
     European mobile carriers' service revenues on average, and ranged
     from a low of 5 percent of service revenues in Sweden to a high of
     21.5 percent of service revenues in the UK. [^525] This compares
     with 9.6 percent of U.S. mobile carriers' service revenues in the
     same period, up from 6 percent at the end of 2004.[^526] The
     percentage of service revenues derived from mobile data services
     was even higher in Japan (26.4 percent), Singapore (20 percent),
     and South Korea (18 percent) than in Western Europe on
     average.[^527]

197. Text messaging continues to be far more popular in Western Europe
     and parts of Asia than in the United States. Based on monthly
     surveys of mobile subscribers in the U.K., Germany, and the U.S.,
     M:Metrics estimates that 83.4 percent of U.K. subscribers and 79.4
     percent of German subscribers sent a text message in the first
     quarter of 2006, as compared with 34.9 percent of U.S. mobile
     subscribers.[^528] A recent IDC survey in Asian Pacific countries,
     including Australia, Hong Kong, Singapore, and South Korea, found
     that 65 percent of mobile users send text messages on a daily
     basis.[^529] As noted in the *Tenth Report* and previous reports, a
     higher percentage of mobile subscribers use text messaging in
     Europe and Asia partly because mobile voice calls are still
     relatively more expensive on a per minute basis in these mobile
     markets.[^530] In particular, European and Asian mobile subscribers
     have an incentive to send text messages because it is generally
     cheaper than placing a call on their mobile phones.[^531] In
     contrast, most U.S. mobile subscribers are on calling plans that
     include large buckets of minutes plus unlimited free night and
     weekend minutes. These bucket plans create a disincentive to send
     text messages because the incremental cost of a mobile voice call
     is close to zero, whereas there is usually an additional charge for
     sending a text message.[^532]

198. Despite the increased availability of multimedia messaging options
     and email for mobile phones as well as other mobile content and
     applications, text messaging continues to be the most popular
     mobile data service in Europe and Asia, as well as the United
     States. Nevertheless, although text messaging is more widely used
     than multimedia messaging, photo messaging is also more popular in
     Europe than in the United States. In particular, M:Metrics' survey
     results indicate that 27.3 percent of U.K. subscribers and 19.4
     percent of German subscribers used photo messaging in the first
     quarter of 2006, as compared with nearly 11 percent of U.S. mobile
     subscribers.[^533]

199. Apart from text and photo messaging, M:Metrics' survey results
     reveal little difference between the rates at which mobile
     subscribers in the U.S., U.K., and Germany are adopting various
     mobile data applications. Mobile subscribers in the U.K. used their
     cellphones to browse news and information at a somewhat higher rate
     (11.1 percent) than subscribers in the United States (9.9 percent)
     and Germany (4.1 percent).[^534] For the remaining mobile data
     applications survey respondents were asked about, including
     ringtones, games, instant messaging and email, adoption rates were
     less than 10 percent in all three countries.[^535] Similarly, the
     aforementioned IDC survey in Asian Pacific countries found that
     less than 10 percent of mobile users are consistently using
     advanced messaging and other multimedia features on their
     cellphones.[^536]

200. The number of foreign mobile telephone carriers providing mobile
     data services over next-generation networks continued to grow in
     the past year. The GSM trade association ("GSM Association")
     reports that operators had launched more than 105 commercial WCDMA
     networks across fifty countries as of May 2006.[^537] GSM
     Association also reports that WCDMA networks had attracted 62.7
     million subscribers worldwide by the first quarter of 2006, up from
     16.3 million at the end of 2004 and 2.8 million at the end of
     2003.[^538] This compares with 23.9 million subscribers on CDMA
     1xEV-DO networks in the first quarter of 2006, up from 12.3 million
     at the end of 2004 and 4.6 million at the end of 2003.[^539]

201. Although the European Commission had originally targeted the
     beginning of 2002 as the date for the coordinated introduction of
     3G services, most European carriers delayed the launch of
     commercial WCDMA service until 2004.[^540] As of September 2005,
     operators had commercially launched 46 WCDMA networks in sixteen
     Western European markets, up from 40 networks in sixteen markets at
     the end of 2004, and ten networks in six markets at the end of
     2003.[^541] GSM Association reports that WCDMA networks served
     32.145 million subscribers in Western Europe in the first quarter
     of 2006, up from 7.7 million at the end of 2004.[^542] Based on
     surveys of mobile subscribers in the U.K., Germany, and the United
     States, M:Metrics estimates that the percentage of mobile
     subscribers on 3G networks at the end of 2005 was highest in the
     U.K. at 7.7 percent, followed by Germany (3.2 percent) and the
     United States (1.9 percent).[^543] Survey results also indicate
     that subscribers to 3G services in the U.K. and Germany are
     significantly more likely to use mobile data services than their
     counterparts on 2G networks. In addition to higher rates of SMS,
     instant messaging, and purchasing games and ringtones, 3G
     subscribers are far more likely to use multimedia applications that
     benefit from the superior transmission capabilities of 3G networks,
     such as capturing videos, sending videos to another user's handset,
     and viewing short video clips.[^544]

202. Although early 3G licensing gave European operators a head start in
     the deployment of WCDMA networks, *Wall Street Journal* personal
     technology columnist Walt Mossberg argues that the superior
     next-generation technologies deployed by U.S. wireless carriers
     have given the United States an edge over Europe in wireless data
     networks for the first time in years.[^545] In particular, speeds
     on the EV-DO networks deployed by Verizon Wireless, Sprint Nextel,
     and other U.S. CDMA carriers are much faster than the speeds on
     European WCDMA networks.[^546] Moreover, in December 2005, U.S.
     operator Cingular became the first carrier in the world to launch a
     commercial WCDMA/HSDPA network, which also provides much faster
     speeds than Europe's WCDMA networks.[^547] Europe then followed,
     with a handful of Western European 3G operators beginning to
     upgrade their WCDMA networks by deploying HSDPA in the first half
     of 2006.[^548] The advantages of technological competition over
     standardization may account for the ability of U.S. carriers to
     leapfrog their European counterparts. As noted above, Cingular
     decided to deploy WCDMA with HSDPA to compete with Verizon
     Wireless's EV-DO network because the latter offers faster speeds
     than WCDMA alone.[^549] In contrast, with all competing carriers
     using the same technology, European carriers may be under less
     pressure to upgrade, knowing that a competitor's early lead will
     not be insurmountable.[^550]

203. Japan's NTT DoCoMo launched the world's first commercial 3G service
     over a WCDMA network in October 2001.[^551] NTT DoCoMo's WCDMA
     service, which the company calls FOMA (Freedom of Multimedia
     Access), had more than 23.4 million subscribers as of the end of
     March 2006, nearly double the number of subscribers at the end of
     April 2005.[^552] In January 2006, FOMA overtook and surpassed
     rival Japanese carrier KDDI's CDMA2000 service, which had nearly 22
     million subscribers at the end of March 2006.[^553] However, KDDI
     has migrated more than 96 percent of its subscribers to its
     CDMA2000 service, whereas FOMA accounts for less than 50 percent of
     NTT DoCoMo's subscriber base. Data services offered over
     next-generation CDMA networks continue to be popular with consumers
     in Korea. South Korea had accumulated more than 36.7 million
     CDMA2000 subscribers, representing nearly 96 percent of its total
     mobile telephone subscriber base, through March 2006, over 13
     million of which are on CDMA2000 1xEV-DO networks.[^554]

# INTERMODAL ISSUES

## Wireless -- Wireline Competition

204. Once solely a business tool, wireless phones are now a mass-market
     consumer device.[^555] As the chief operating officer of Sprint
     Nextel recently noted, "there are only three forgotten things
     consumers will return home for: a cellphone, a wallet or purse and
     keys."[^556] The overall wireless penetration rate in the United
     States is now at 71 percent, [^557] and virtually everyone in the
     United States between the ages of 20 and 49 has a wireless
     phone.[^558] NTT DoCoMo Inc.'s Chief Executive has said,
     "\[Cellphones are\] already evolving as a multifunctional tool for
     everyday life."[^559]

### Wireless Substitution

205. While exact percentages are difficult to determine, wireless
     substitution has grown significantly in recent years. According to
     the 2005 National Health Interview Survey (NHIS), 7.8 percent of
     adults lived in households with only wireless phones in the second
     half of 2005, up from 5.5 percent in the second half of 2004, and
     3.5 percent in the second half of 2003.[^560] Similarly, based on a
     survey conducted in the fourth quarter of 2005, one analyst found
     that about 8 percent of U.S. households that subscribe to cellphone
     service had given up their landline phones, up from 5 percent in
     2004 and 4 percent in 2003.[^561] The analyst observed,
     "\[h\]ouseholds are ditching home wired phones faster because
     cellphone service is getting cheaper, wireless coverage is
     improving and fewer people need their land lines for access to the
     Internet."[^562] Moreover, the survey found that more than six
     million households, and nearly 6 percent of the total U.S.
     population, rely exclusively on wireless phones.[^563] Another
     survey from early 2006 found that 12 percent of cellphone users use
     cellphones as their only phone.[^564] A fourth survey from October
     2005 found that nearly one in five consumers who recently purchased
     mobile phones said they had no landline service.[^565]

206. Even when not "cutting the cord" completely, consumers increasingly
     are choosing wireless service over traditional wireline service,
     particularly for certain uses. For example, according to one
     analyst, customers in nearly a third of American households make at
     least half their long-distance calls at home from their cell phones
     rather than from their landlines.[^566] In the early 2006 survey of
     cellphone users described above, an additional 42 percent of
     cellphone users said that they also had a landline phone, but that
     they used their cellphones "most."[^567]

207. These trends appear to be due to the relatively low cost,
     widespread availability, and increased use of wireless service. As
     we discussed in past reports, a number of analysts have argued that
     wireless service is competitive or cheaper than wireline,
     particularly if one is making a long-distance call or when
     traveling.[^568] As one analyst wrote, "\[a\]t currently effective
     yields, we continue to believe wireless pricing is competitive with
     traditional wireline pricing (especially relative to long-distance
     calling). Lower yields, combined with the convenience of mobility,
     should continue to drive wireline displacement."[^569]

### Wireless Alternatives

208. A number of mobile wireless carriers offer service plans designed
     to compete directly with wireline local telephone service. These
     plans offer unlimited local calling for around \$30 to \$40 a
     month. The two largest such providers, Leap, under its "Cricket"
     brand, and MetroPCS, served a combined total of 3.7 million
     customers at the end of 2005.[^570] Leap offers service in 41
     markets in 20 states, [^571] while MetroPCS offers service in
     certain major metropolitan areas in California, Florida, Georgia,
     Texas, and Michigan.[^572]

209. In addition to unlimited local wireless calling plans, the
     nationwide carriers offer plans that offer large buckets of
     minutes, with around 1,000 "anytime" minutes and unlimited night
     and weekend minutes (some with free "in-network" calling), for
     around \$50-\$60 per month.[^573]

## Wireless Local Area Networks

210. Wireless Local Area Networks (WLANs) and Wireless Metropolitan Area
     Networks (WMANs) are playing an increasingly important role as a
     competitor and supplement to the services offered by the CMRS
     industry.[^574] WLANs are already widely deployed and enable
     consumers to obtain high-speed wireless Internet connections within
     a range of 150 to 250 feet from a wireless access point (AP).[^575]
     The most prevalent WLAN technology is equipment manufactured in
     accordance with the IEEE 802.11 family of standards, commonly known
     as "Wi-Fi," short for wireless fidelity. Basic WLAN data transfer
     rates range from speeds of up to 11 Mbps for 802.11b and up to 54
     Mbps for 802.11a and 802.11g. New "SpeedBoost" or "Super G"
     routers, marketed as "pre-802.11n," employ MIMO (Multiple Input
     Multiple Output) technology, making them capable of providing
     speeds from 108 to 240 Mbps. The 802.11n standard did not receive
     enough support to be ratified as an official standard by IEEE in
     the latest round of voting in November 2005. After modification,
     the revised 802.11n specification will be reconsidered.

211. WLAN users often access high-speed Internet connections at
     so-called "hot spots," including locations such as restaurants,
     coffee shops, hotels, airports, convention centers, and city
     parks.[^576] Estimates on the number of public Wi-Fi hot spots vary
     considerably. Wi‑Fi411 estimates there are 13,178 public Wi-Fi hot
     spots in the United States.[^577] However, Intel's web site counts
     39,951 Wi-Fi locations in United States.[^578] The
     Telecommunications Industry Association (TIA) cites data that
     places the number of hot spots in the United States at 39,200 in
     2005.[^579] In addition to public hot spots, WLANs are also
     proliferating in homes and businesses. As users contract for wired
     broadband services for their home or business, they find that the
     "plug and play" wireless local area network extendibility made
     possible by devices from companies like Linksys and Netgear both
     affordable and convenient.

212. As noted in the *Ninth Report*, several mobile telephone carriers
     have entered the hot spot operation business through acquisitions,
     partnerships, or independent deployments.[^580] Generally, mobile
     telephone carriers offer WLAN services to augment their voice
     service offerings with data access.[^581] Subscribers to carriers'
     WLAN services may choose from a wide range of service plans
     including annual access, month-to-month access, daily access, and
     metered access.[^582] In the past year mobile carriers continued to
     extend their Wi-Fi coverage by entering into agreements with other
     carriers. T‑Mobile now claims 7,661 hotspots where its customers
     can get connectivity.[^583]

# CONCLUSION

213. Even with one less nationwide mobile telephone carrier to choose
     from, U.S. consumers continue to benefit from robust competition in
     the CMRS marketplace. During 2005, the CMRS industry experienced
     another year of strong growth, demonstrating the continuing demand
     for and reliance upon mobile services. As of December 2005, we
     estimate there were approximately 213 million mobile telephone
     subscribers, which translates into a nationwide penetration rate of
     roughly 71 percent.[^584] Consumers continue to increase their use
     of mobile telephones for both voice and data services. Partly
     because of the prevalence of mobile service packages with large
     buckets of inexpensive minutes, the average amount of time U.S.
     mobile subscribers spend talking on their mobile phones rose to 740
     minutes per month in the second half of 2005, an increase of more
     than two hours from a year earlier and more than quadruple the
     average usage of mobile subscribers in Western Europe and
     Japan.[^585] Survey evidence also indicates that U.S. mobile
     subscribers have experienced an improvement in call quality in the
     past year. Moreover, although U.S. mobile subscribers still prefer
     to use their mobile phones to talk rather than to send text
     messages, they sent more than 48 billion text messages in the
     second half of 2005, nearly double the volume of text messages in
     the same period of 2004.[^586] Relatively low prices on mobile
     voice and data services appear to have been a key factor
     stimulating subscriber growth and usage. While only two of three
     different indicators of mobile pricing showed a continued decline
     in the cost of mobile service in 2005,[^587] mobile telephone
     service in the United States remains relatively inexpensive on a
     per minute basis compared with that in Western Europe.[^588]

214. In addition to the indicators of mobile market performance cited in
     the preceding paragraph, a wide variety of indicators of carrier
     conduct and market structure also show that competition in mobile
     telecommunications markets is robust. For example, mobile telephone
     providers continued to build out their networks and expand service
     availability during 2005.[^589] Carriers also continued to deploy
     networks based on CDMA2000 1xEV-DO or WCDMA/HSDPA technologies that
     allow them to offer mobile Internet access services for mobile
     telephone handsets, PDAs, and laptops at speeds comparable to what
     many users get from fixed broadband connections such as DSL. With
     respect to market structure, the merger of Sprint and Nextel has
     resulted in a decline in the number of nationwide carriers from
     five to four.[^590] Due largely to this transaction, there was a
     decline in the percentage of the U.S. population living in counties
     with access to five or more different mobile telephone operators,
     from 87 percent at the end of 2004 to nearly 51 percent at the end
     of 2005. Nevertheless, 98 percent of the total U.S. population
     continues to live in counties where three or more different
     operators compete to offer mobile telephone service in some parts
     of those counties, while nearly 94 percent of the U.S. population
     continues to live in counties with four or more mobile telephone
     operators competing to offer service.[^591]

215. In addition, while relatively few wireless customers have "cut the
     cord" in the sense of canceling their subscription to wireline
     telephone service, consumers appear increasingly to chose wireless
     service over traditional wireline service, particularly for certain
     uses. According to one survey from early 2006, while only 12
     percent of cellphone users use cellphones as their only phone, an
     additional 42 percent said they also had a landline phone but used
     their cellphones "most." In addition, one analyst estimates that
     customers in nearly a third of American households make at least
     half their long-distance calls at home from their cell phones
     rather than from their landlines.

216. Using the various data sources and metrics discussed above, we have
     met our statutory requirement to analyze the competitive market
     conditions with respect to commercial mobile services,[^592] and
     conclude that the CMRS marketplace is effectively competitive.

# Procedural MATTERS

217. This Eleventh Report is issued pursuant to authority contained in
     Section 332 (c)(1)(C) of the Communications Act of 1934, as
     amended, 47 U.S.C. § 322 (c)(1)(C).

218. It is ORDERED that the Secretary shall send copies of this Report
     to the appropriate committees and subcommittees of the United
     States House of Representatives and the United States Senate.

219. It is FURTHER ORDERED that the proceeding in the WT Docket No.
     **XXX** IS TERMINATED.

FEDERAL COMMUNICATIONS COMMISSION

> Marlene H. Dortch
>
> Secretary

**APPENDIX A**

**Mobile Telephony**

**Table of Contents**

Table 1: CTIA's Semi-Annual Mobile Telephone Industry Survey 87

Table 2: FCC's Semi-Annual Local Telephone Competition Survey: Mobile
Telephone Subscribership 88

Table 3: Economic Area Penetration Rates 89

Table 4: Top 25 Mobile Telephone Operators by Subscribers 93

Table 5: NRUF-Estimated Mobile Telephone Subscribers 94

Table 6: Estimated Mobile Telephone Rollouts by County 94

Table 7: Mobile Telephone Digital Coverage 95

Table 8: Mobile Telephone NextGen Coverage 95

Table 9: Change in CPI 96

Table 10: Average Revenue Per Minute 97

Table 11: Market Entry Over Time 97

Table 12: Mobile Market Structure and Performance in Selected Countries
98

**Table 1: CTIA's Semi-Annual Mobile Telephone Industry Survey**

+----+-------+--------+-------+---------+-----+--------+-----------+
| Da | Esti  | Year   | 12-   | 1       | C   | Direct | Average   |
| te | mated | End    | Month | 2-Month | ell | S      | Local     |
|    | Total | over   | Total | Roamer  | Si  | ervice | Monthly   |
|    | S     | Year   | Se    | S       | tes | Pr     | Bill      |
|    | ubscr | End    | rvice | ervices |     | ovider | (Dec.     |
|    | ibers | Subs   | Rev   | R       |     | Emp    | Survey    |
|    |       | criber | enues | evenues |     | loyees |           |
|    |       | In     | (in   | (in     |     |        | Periods)  |
|    |       | crease | \$    | \$000s) |     |        |           |
|    |       |        | 000s) |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 34    | 2      | \$48  | N/A     | 913 | 2,727  | N/A       |
| 85 | 0,213 | 48,613 | 2,428 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 68    | 3      | \$82  | N/A     | 1,  | 4,334  | N/A       |
| 86 | 1,825 | 41,612 | 3,052 |         | 531 |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 1,23  | 5      | \     | N/A     | 2,  | 7,147  | \$96.83   |
| 87 | 0,855 | 49,030 | $1,15 |         | 305 |        |           |
|    |       |        | 1,519 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 2,06  | 8      | \     | N/A     | 3,  | 11,400 | \$98.02   |
| 88 | 9,441 | 38,586 | $1,95 |         | 209 |        |           |
|    |       |        | 9,548 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 3,50  | 1,4    | \     | \$      | 4,  | 15,927 | \$83.94   |
| 89 | 8,944 | 39,503 | $3,34 | 294,567 | 169 |        |           |
|    |       |        | 0,595 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 5,28  | 1,7    | \     | \$      | 5,  | 21,382 | \$80.90   |
| 90 | 3,055 | 74,111 | $4,54 | 456,010 | 616 |        |           |
|    |       |        | 8,820 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 7,55  | 2,2    | \     | \$      | 7,  | 26,327 | \$72.74   |
| 91 | 7,148 | 74,093 | $5,70 | 703,651 | 847 |        |           |
|    |       |        | 8,522 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 11,03 | 3,4    | \     | \$      | 10, | 34,348 | \$68.68   |
| 92 | 2,753 | 75,605 | $7,82 | 973,871 | 307 |        |           |
|    |       |        | 2,726 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 16,00 | 4,9    | \$    | \$1,    | 12, | 39,775 | \$61.48   |
| 93 | 9,461 | 76,708 | 10,89 | 361,613 | 805 |        |           |
|    |       |        | 2,175 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 24,13 | 8,1    | \$    | \$1,    | 17, | 53,902 | \$56.21   |
| 94 | 4,421 | 24,960 | 14,22 | 830,782 | 920 |        |           |
|    |       |        | 9,922 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 33,78 | 9,6    | \$    | \$2,    | 22, | 68,165 | \$51.00   |
| 95 | 5,661 | 51,240 | 19,08 | 542,570 | 663 |        |           |
|    |       |        | 1,239 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 44,04 | 10,2   | \$    | \$2,    | 30, | 84,161 | \$47.70   |
| 96 | 2,992 | 57,331 | 23,63 | 780,935 | 045 |        |           |
|    |       |        | 4,971 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 55,31 | 11,2   | \$    | \$2,    | 51, | 1      | \$42.78   |
| 97 | 2,293 | 69,301 | 27,48 | 974,205 | 600 | 09,387 |           |
|    |       |        | 5,633 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 69,20 | 13,8   | \$    | \$3,    | 65, | 1      | \$39.43   |
| 98 | 9,321 | 97,028 | 33,13 | 500,469 | 887 | 34,754 |           |
|    |       |        | 3,175 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 19 | 86,04 | 16,8   | \$    | \$4,    | 81, | 1      | \$41.24   |
| 99 | 7,003 | 37,682 | 40,01 | 085,417 | 698 | 55,817 |           |
|    |       |        | 8,489 |         |     |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 20 | 1     | 23,4   | \$    | \$3,    | 1   | 1      | \$45.27   |
| 00 | 09,47 | 31,028 | 52,46 | 882,981 | 04, | 84,449 |           |
|    | 8,031 |        | 6,020 |         | 288 |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 20 | 1     | 18,8   | \$    | \$3,    | 1   | 2      | \$47.37   |
| 01 | 28,37 | 96,481 | 65,31 | 752,826 | 27, | 03,580 |           |
|    | 4,512 |        | 6,235 |         | 540 |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 20 | 1     | 12,3   | \$    | \$3,    | 1   | 1      | \$48.40   |
| 02 | 40,76 | 92,330 | 76,50 | 895,512 | 39, | 92,410 |           |
|    | 6,842 |        | 8,187 |         | 338 |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 20 | 1     | 17,9   | \$    | \$3,    | 1   | 2      | \$49.91   |
| 03 | 58,72 | 55,139 | 87,62 | 766,267 | 62, | 05,629 |           |
|    | 1,981 |        | 4,093 |         | 986 |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 20 | 1     | 23,4   | \$1   | \$4,    | 1   | 2      | \$50.64   |
| 04 | 82,14 | 18,381 | 02,12 | 210,331 | 75, | 26,016 |           |
|    | 0,362 |        | 1,210 |         | 725 |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+
| 20 | 2     | 25,7   | \$1   | \$3,    | 1   | 2      | \$49.98   |
| 05 | 07,89 | 55,836 | 13,53 | 786,331 | 83, | 33,067 |           |
|    | 6,198 |        | 8,221 |         | 689 |        |           |
+----+-------+--------+-------+---------+-----+--------+-----------+

Source**:** CTIA, *Background on CTIA\'s Semi-Annual Wireless Industry
Survey*
<http://www.ctia.org/research_statistics/statistics/index.cfm/AID/10030>
(Annualized Wireless Industry Survey Results - December 1985 To December
2005: Reflecting Domestic U.S. Commercially-Operational Cellular, ESMR
and PCS Providers).

**Table 2: FCC's Semi-Annual Local Telephone Competition Survey:**

**Mobile Telephone Subcribership**

![](media/image1.png){width="6.489583333333333in"
height="8.552083333333334in"}

Source: Local Telephone Competition: Status as of Dec. 31, 2005, Federal
Communications Commission, July 2006 (Table 14: Mobile Wireless
Telephone Subscribers).

**Table 3: Economic Area Penetration Rates**

+---+------------------------------+-----+-----+-----+---+-----+---+---+
| E | EA Name                      | Su  | 2   | 2   | 2 | 2   | 2 | E |
| A |                              | bsc | 000 | 005 | 0 | 004 | 0 | A |
|   |                              | rib | EA  | Pe  | 0 | Pe  | 0 | d |
|   |                              | ers | P   | net | 5 | net | 4 | e |
|   |                              |     | opu | rat |   | rat | H | n |
|   |                              |     | lat | ion | H | ion | H | s |
|   |                              |     | ion | R   | H | R   | I | i |
|   |                              |     |     | ate | I | ate |   | t |
|   |                              |     |     |     |   |     |   | y |
+===+==============================+=====+=====+=====+===+=====+===+===+
| 3 | Fort Myers-Cape Coral, FL    | 6   | 6   | 95% | 2 | 78% | 1 | 2 |
| 2 |                              | 55, | 92, |     | 4 |     | 7 | 3 |
|   |                              | 340 | 265 |     | 1 |     | 9 | 4 |
|   |                              |     |     |     | 6 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 2 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Atlanta, GA-AL-NC            | 5,0 | 5,4 | 92% | 2 | 80% | 2 | 2 |
| 0 |                              | 15, | 71, |     | 3 |     | 0 | 4 |
|   |                              | 564 | 412 |     | 6 |     | 9 | 6 |
|   |                              |     |     |     | 0 |     | 6 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Las Vegas, NV-AZ-UT          | 1,5 | 1,7 | 92% | 2 | 77% | 2 | 2 |
| 5 |                              | 75, | 09, |     | 5 |     | 1 | 3 |
| 3 |                              | 070 | 797 |     | 8 |     | 5 | . |
|   |                              |     |     |     | 4 |     | 5 | 7 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Washington-Baltimore,        | 7,5 | 8,4 | 90% | 2 | 79% | 2 | 4 |
| 3 | DC-MD-VA-WV-PA               | 58, | 03, |     | 7 |     | 2 | 0 |
|   |                              | 747 | 130 |     | 3 |     | 8 | 2 |
|   |                              |     |     |     | 9 |     | 3 | . |
|   |                              |     |     |     |   |     |   | 7 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 3 | Orlando, FL                  | 3,2 | 3,6 | 90% | 3 | 74% | 2 | 2 |
| 0 |                              | 84, | 42, |     | 0 |     | 2 | 6 |
|   |                              | 186 | 540 |     | 2 |     | 8 | 5 |
|   |                              |     |     |     | 8 |     | 8 | . |
|   |                              |     |     |     |   |     |   | 8 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Jacksonville, FL-GA          | 1,6 | 1,8 | 88% | 2 | 75% | 1 | 1 |
| 9 |                              | 62, | 85, |     | 3 |     | 7 | 1 |
|   |                              | 868 | 190 |     | 0 |     | 9 | 2 |
|   |                              |     |     |     | 3 |     | 7 | . |
|   |                              |     |     |     |   |     |   | 5 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 3 | Miami-Fort Lauderdale, FL    | 4,9 | 5,6 | 88% | 2 | 74% | 2 | 4 |
| 1 |                              | 03, | 02, |     | 4 |     | 0 | 8 |
|   |                              | 372 | 222 |     | 1 |     | 8 | 3 |
|   |                              |     |     |     | 8 |     | 0 | . |
|   |                              |     |     |     |   |     |   | 2 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | Pensacola, FL                | 5   | 6   | 88% | 2 | 77% | 1 | 1 |
| 1 |                              | 49, | 23, |     | 0 |     | 7 | 5 |
|   |                              | 964 | 252 |     | 8 |     | 4 | 4 |
|   |                              |     |     |     | 0 |     | 4 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | San Diego, CA                | 2,4 | 2,8 | 88% | 2 | 78% | 2 | 6 |
| 6 |                              | 76, | 13, |     | 7 |     | 4 | 6 |
| 1 |                              | 716 | 833 |     | 8 |     | 8 | 0 |
|   |                              |     |     |     | 9 |     | 6 | . |
|   |                              |     |     |     |   |     |   | 4 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 3 | Tampa-St.                    | 2,0 | 2,3 | 85% | 2 | 72% | 1 | 8 |
| 4 | Petersburg-Clearwater, FL    | 39, | 95, |     | 0 |     | 7 | 9 |
|   |                              | 328 | 997 |     | 1 |     | 2 | 0 |
|   |                              |     |     |     | 8 |     | 7 | . |
|   |                              |     |     |     |   |     |   | 9 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Detroit-Ann Arbor-Flint, MI  | 5,8 | 6,9 | 85% | 2 | 70% | 2 | 3 |
| 7 |                              | 84, | 63, |     | 8 |     | 1 | 6 |
|   |                              | 704 | 637 |     | 3 |     | 1 | 4 |
|   |                              |     |     |     | 1 |     | 8 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | Biloxi-Gulfport-Pascagoula,  | 3   | 3   | 85% | 1 | 63% | 1 | 1 |
| 2 | MS                           | 37, | 96, |     | 8 |     | 8 | 4 |
|   |                              | 071 | 754 |     | 9 |     | 4 | 3 |
|   |                              |     |     |     | 6 |     | 4 | . |
|   |                              |     |     |     |   |     |   | 4 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Austin-San Marcos, TX        | 1,1 | 1,3 | 85% | 2 | 76% | 2 | 1 |
| 3 |                              | 48, | 49, |     | 9 |     | 4 | 5 |
| 0 |                              | 691 | 267 |     | 2 |     | 4 | 6 |
|   |                              |     |     |     | 0 |     | 0 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Birmingham, AL               | 1,3 | 1,5 | 84% | 2 | 71% | 2 | 1 |
| 8 |                              | 24, | 78, |     | 5 |     | 2 | 3 |
|   |                              | 715 | 903 |     | 5 |     | 6 | 7 |
|   |                              |     |     |     | 9 |     | 5 | . |
|   |                              |     |     |     |   |     |   | 1 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Honolulu, HI                 | 9   | 1,2 | 83% | 2 | 74% | 2 | 1 |
| 7 |                              | 99, | 11, |     | 5 |     | 2 | 8 |
| 2 |                              | 770 | 537 |     | 0 |     | 0 | 7 |
|   |                              |     |     |     | 4 |     | 0 | . |
|   |                              |     |     |     |   |     |   | 2 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Houston-Galveston-Brazoria,  | 4,6 | 5,6 | 82% | 2 | 70% | 2 | 1 |
| 3 | TX                           | 20, | 32, |     | 5 |     | 3 | 6 |
| 1 |                              | 647 | 853 |     | 1 |     | 1 | 9 |
|   |                              |     |     |     | 0 |     | 3 | . |
|   |                              |     |     |     |   |     |   | 2 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Charlotte-Gastonia-Rock      | 1,6 | 2,0 | 81% | 2 | 68% | 2 | 2 |
| 3 | Hill, NC-SC                  | 45, | 31, |     | 2 |     | 0 | 4 |
|   |                              | 981 | 519 |     | 1 |     | 1 | 0 |
|   |                              |     |     |     | 9 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 5 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Huntsville, AL-TN            | 8   | 9   | 81% | 2 | 71% | 2 | 1 |
| 4 |                              | 08, | 97, |     | 5 |     | 5 | 1 |
|   |                              | 774 | 824 |     | 7 |     | 6 | 9 |
|   |                              |     |     |     | 9 |     | 0 | . |
|   |                              |     |     |     |   |     |   | 1 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Los Angeles-Riverside-Orange | 1   | 1   | 81% | 2 | 70% | 2 | 2 |
| 6 | County, CA-AZ                | 4,6 | 8,0 |     | 6 |     | 4 | 8 |
| 0 |                              | 55, | 03, |     | 6 |     | 3 | 6 |
|   |                              | 513 | 420 |     | 2 |     | 3 | . |
|   |                              |     |     |     |   |     |   | 1 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Charleston-North Charleston, | 4   | 5   | 80% | 2 | 68% | 1 | 1 |
| 6 | SC                           | 68, | 87, |     | 0 |     | 9 | 4 |
|   |                              | 541 | 297 |     | 4 |     | 0 | 9 |
|   |                              |     |     |     | 6 |     | 8 | . |
|   |                              |     |     |     |   |     |   | 8 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | Baton Rouge, LA-MS           | 5   | 7   | 80% | 4 | 63% | 4 | 1 |
| 4 |                              | 93, | 39, |     | 3 |     | 1 | 4 |
|   |                              | 055 | 673 |     | 3 |     | 0 | 0 |
|   |                              |     |     |     | 1 |     | 3 | . |
|   |                              |     |     |     |   |     |   | 3 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Denver-Boulder-Greeley,      | 3,1 | 3,9 | 80% | 2 | 71% | 2 | 5 |
| 4 | CO-KS-NE                     | 77, | 84, |     | 3 |     | 0 | 2 |
| 1 |                              | 341 | 105 |     | 4 |     | 2 | . |
|   |                              |     |     |     | 2 |     | 5 | 0 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Phoenix-Mesa, AZ-NM          | 2,7 | 3,4 | 80% | 2 | 68% | 1 | 9 |
| 5 |                              | 40, | 07, |     | 0 |     | 8 | 3 |
| 8 |                              | 841 | 197 |     | 6 |     | 0 | . |
|   |                              |     |     |     | 8 |     | 7 | 9 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Philadelphia-Wilmington-Atl. | 5,8 | 7,3 | 79% | 2 | 69% | 2 | 7 |
| 2 | City, PA-NJ-DE-MD            | 08, | 09, |     | 7 |     | 4 | 7 |
|   |                              | 070 | 792 |     | 4 |     | 0 | 8 |
|   |                              |     |     |     | 9 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 8 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 3 | Sarasota-Bradenton, FL       | 6   | 7   | 79% | 2 | 67% | 1 | 2 |
| 3 |                              | 03, | 63, |     | 3 |     | 8 | 7 |
|   |                              | 137 | 795 |     | 7 |     | 6 | 3 |
|   |                              |     |     |     | 7 |     | 3 | . |
|   |                              |     |     |     |   |     |   | 5 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | Lafayette, LA                | 4   | 6   | 79% | 4 | 60% | 4 | 9 |
| 5 |                              | 73, | 01, |     | 1 |     | 0 | 9 |
|   |                              | 285 | 654 |     | 9 |     | 0 | . |
|   |                              |     |     |     | 3 |     | 3 | 9 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Sacramento-Yolo, CA          | 1,8 | 2,3 | 79% | 2 | 68% | 2 | 1 |
| 6 |                              | 17, | 11, |     | 5 |     | 5 | 8 |
| 4 |                              | 843 | 567 |     | 6 |     | 4 | 8 |
|   |                              |     |     |     | 7 |     | 5 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Seattle-Tacoma-Bremerton, WA | 3,2 | 4,1 | 79% | 2 | 69% | 2 | 1 |
| 7 |                              | 71, | 35, |     | 6 |     | 3 | 9 |
| 0 |                              | 644 | 291 |     | 0 |     | 3 | 0 |
|   |                              |     |     |     | 0 |     | 6 | . |
|   |                              |     |     |     |   |     |   | 4 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | New York-No. New Jer.-Long   | 2   | 2   | 78% | 2 | 69% | 2 | 8 |
| 0 | Island, NY-NJ-CT-PA-MA-VT    | 0,1 | 5,7 |     | 6 |     | 3 | 9 |
|   |                              | 21, | 12, |     | 5 |     | 2 | 0 |
|   |                              | 151 | 577 |     | 9 |     | 6 | . |
|   |                              |     |     |     |   |     |   | 5 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Raleigh-Durham-Chapel Hill,  | 1,4 | 1,8 | 78% | 2 | 69% | 1 | 1 |
| 9 | NC                           | 21, | 31, |     | 1 |     | 8 | 8 |
|   |                              | 115 | 510 |     | 9 |     | 6 | 8 |
|   |                              |     |     |     | 1 |     | 5 | . |
|   |                              |     |     |     |   |     |   | 3 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Dallas-Fort Worth, TX-AR-OK  | 5,9 | 7,6 | 78% | 2 | 66% | 2 | 1 |
| 2 |                              | 64, | 45, |     | 8 |     | 7 | 1 |
| 7 |                              | 163 | 530 |     | 2 |     | 0 | 9 |
|   |                              |     |     |     | 5 |     | 8 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | San Francisco-Oakland-San    | 7,1 | 9,1 | 78% | 2 | 69% | 2 | 2 |
| 6 | Jose, CA                     | 08, | 11, |     | 6 |     | 5 | 7 |
| 3 |                              | 019 | 806 |     | 3 |     | 9 | 1 |
|   |                              |     |     |     | 6 |     | 8 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Norfolk-Virginia             | 1,3 | 1,7 | 77% | 2 | 66% | 1 | 2 |
| 0 | Beach-Newport News, VA-NC    | 18, | 22, |     | 0 |     | 7 | 8 |
|   |                              | 081 | 764 |     | 3 |     | 1 | 9 |
|   |                              |     |     |     | 6 |     | 2 | . |
|   |                              |     |     |     |   |     |   | 8 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Savannah, GA-SC              | 5   | 6   | 77% | 1 | 60% | 1 | 9 |
| 8 |                              | 12, | 68, |     | 6 |     | 7 | 1 |
|   |                              | 403 | 214 |     | 0 |     | 6 | . |
|   |                              |     |     |     | 5 |     | 0 | 9 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 3 | Tallahassee, FL-GA           | 5   | 7   | 77% | 2 | 65% | 2 | 6 |
| 5 |                              | 53, | 20, |     | 2 |     | 1 | 3 |
|   |                              | 429 | 434 |     | 9 |     | 0 | . |
|   |                              |     |     |     | 8 |     | 5 | 5 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Louisville, KY-IN            | 1,0 | 1,4 | 77% | 2 | 67% | 2 | 1 |
| 0 |                              | 95, | 16, |     | 5 |     | 2 | 8 |
|   |                              | 457 | 914 |     | 7 |     | 3 | 0 |
|   |                              |     |     |     | 2 |     | 3 | . |
|   |                              |     |     |     |   |     |   | 9 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | New Orleans, LA-MS           | 1,3 | 1,7 | 77% | 3 | 63% | 2 | 1 |
| 3 |                              | 24, | 25, |     | 0 |     | 5 | 7 |
|   |                              | 220 | 338 |     | 4 |     | 7 | 1 |
|   |                              |     |     |     | 0 |     | 0 | . |
|   |                              |     |     |     |   |     |   | 9 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | San Antonio, TX              | 1,6 | 2,1 | 77% | 3 | 64% | 2 | 8 |
| 3 |                              | 56, | 41, |     | 1 |     | 6 | 2 |
| 4 |                              | 504 | 060 |     | 7 |     | 8 | . |
|   |                              |     |     |     | 3 |     | 7 | 9 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 3 | Boston-Worcest               | 6,0 | 7,9 | 76% | 2 | 67% | 2 | 4 |
|   | er-Lawrence-Lowell-Brockton, | 16, | 54, |     | 6 |     | 3 | 2 |
|   | MA-NH-RI-VT                  | 321 | 554 |     | 6 |     | 1 | 1 |
|   |                              |     |     |     | 4 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 8 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Richmond-Petersburg, VA      | 1,0 | 1,4 | 76% | 2 | 66% | 1 | 1 |
| 5 |                              | 98, | 46, |     | 2 |     | 8 | 2 |
|   |                              | 675 | 123 |     | 5 |     | 9 | 4 |
|   |                              |     |     |     | 0 |     | 5 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Asheville, NC                | 3   | 4   | 76% | 3 | 62% | 3 | 1 |
| 2 |                              | 35, | 44, |     | 5 |     | 6 | 2 |
|   |                              | 779 | 594 |     | 3 |     | 0 | 8 |
|   |                              |     |     |     | 8 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 6 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | Kansas City, MO-KS           | 1,8 | 2,4 | 76% | 2 | 66% | 1 | 8 |
| 9 |                              | 72, | 69, |     | 3 |     | 9 | 8 |
|   |                              | 482 | 340 |     | 2 |     | 5 | . |
|   |                              |     |     |     | 8 |     | 4 | 7 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Farmington, NM-CO            | 1   | 1   | 76% | 3 | 59% | 4 | 1 |
| 5 |                              | 48, | 93, |     | 4 |     | 5 | 6 |
| 5 |                              | 156 | 872 |     | 6 |     | 1 | . |
|   |                              |     |     |     | 2 |     | 6 | 0 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Nashville, TN-KY             | 1,8 | 2,4 | 75% | 2 | 64% | 2 | 1 |
| 1 |                              | 32, | 44, |     | 5 |     | 2 | 0 |
|   |                              | 718 | 643 |     | 2 |     | 1 | 5 |
|   |                              |     |     |     | 6 |     | 2 | . |
|   |                              |     |     |     |   |     |   | 1 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | Beaumont-Port Arthur, TX     | 3   | 4   | 75% | 3 | 57% | 3 | 8 |
| 7 |                              | 40, | 56, |     | 1 |     | 1 | 9 |
|   |                              | 858 | 637 |     | 5 |     | 8 | . |
|   |                              |     |     |     | 1 |     | 7 | 2 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Reno, NV-CA                  | 5   | 6   | 75% | 2 | 64% | 2 | 7 |
| 5 |                              | 02, | 70, |     | 2 |     | 1 | . |
| 1 |                              | 641 | 013 |     | 8 |     | 1 | 5 |
|   |                              |     |     |     | 2 |     | 5 | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Chicago-Gary-Kenosha,        | 7,6 | 1   | 74% | 2 | 65% | 1 | 5 |
| 4 | IL-IN-WI                     | 63, | 0,3 |     | 1 |     | 8 | 5 |
|   |                              | 354 | 28, |     | 7 |     | 8 | 6 |
|   |                              |     | 854 |     | 8 |     | 4 | . |
|   |                              |     |     |     |   |     |   | 5 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Portland-Salem, OR-WA        | 2,1 | 2,8 | 74% | 2 | 63% | 2 | 7 |
| 6 |                              | 22, | 83, |     | 3 |     | 2 | 6 |
| 7 |                              | 657 | 737 |     | 9 |     | 5 | . |
|   |                              |     |     |     | 2 |     | 1 | 0 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Columbia, SC                 | 6   | 9   | 73% | 2 | 63% | 2 | 1 |
| 4 |                              | 79, | 32, |     | 2 |     | 1 | 2 |
|   |                              | 824 | 115 |     | 5 |     | 7 | 5 |
|   |                              |     |     |     | 7 |     | 0 | . |
|   |                              |     |     |     |   |     |   | 9 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Wilmington, NC-SC            | 6   | 8   | 73% | 1 | 60% | 1 | 1 |
| 5 |                              | 44, | 78, |     | 8 |     | 8 | 0 |
|   |                              | 206 | 267 |     | 9 |     | 2 | 7 |
|   |                              |     |     |     | 7 |     | 8 | . |
|   |                              |     |     |     |   |     |   | 3 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Cedar Rapids, IA             | 2   | 3   | 73% | 2 | 67% | 2 | 1 |
| 0 |                              | 82, | 84, |     | 8 |     | 8 | 0 |
| 3 |                              | 140 | 577 |     | 6 |     | 2 | 1 |
|   |                              |     |     |     | 2 |     | 6 | . |
|   |                              |     |     |     |   |     |   | 3 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Knoxville, TN                | 7   | 9   | 72% | 2 | 62% | 2 | 1 |
| 4 |                              | 09, | 83, |     | 4 |     | 2 | 6 |
|   |                              | 837 | 329 |     | 9 |     | 6 | 5 |
|   |                              |     |     |     | 1 |     | 6 | . |
|   |                              |     |     |     |   |     |   | 6 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Columbus, OH                 | 1,6 | 2,3 | 72% | 2 | 61% | 2 | 1 |
| 1 |                              | 87, | 49, |     | 9 |     | 2 | 9 |
|   |                              | 113 | 060 |     | 1 |     | 7 | 0 |
|   |                              |     |     |     | 4 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 4 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Memphis, TN-AR-MS-KY         | 1,3 | 1,8 | 72% | 2 | 63% | 2 | 1 |
| 3 |                              | 48, | 82, |     | 5 |     | 3 | 0 |
|   |                              | 071 | 332 |     | 5 |     | 9 | 2 |
|   |                              |     |     |     | 2 |     | 5 | . |
|   |                              |     |     |     |   |     |   | 9 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | Columbia, MO                 | 2   | 3   | 72% | 3 | 63% | 3 | 5 |
| 8 |                              | 65, | 69, |     | 7 |     | 5 | 8 |
|   |                              | 695 | 014 |     | 4 |     | 6 | . |
|   |                              |     |     |     | 2 |     | 5 | 0 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Flagstaff, AZ-UT             | 2   | 4   | 72% | 2 | 56% | 2 | 8 |
| 5 |                              | 90, | 01, |     | 7 |     | 8 | . |
| 4 |                              | 386 | 766 |     | 8 |     | 0 | 2 |
|   |                              |     |     |     | 2 |     | 9 | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Tucson, AZ                   | 7   | 9   | 72% | 2 | 62% | 1 | 6 |
| 5 |                              | 22, | 99, |     | 0 |     | 7 | 0 |
| 9 |                              | 581 | 882 |     | 1 |     | 4 | . |
|   |                              |     |     |     | 1 |     | 1 | 0 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Fayetteville, NC             | 3   | 5   | 71% | 1 | 62% | 1 | 1 |
| 2 |                              | 76, | 28, |     | 9 |     | 8 | 6 |
|   |                              | 588 | 224 |     | 7 |     | 8 | 4 |
|   |                              |     |     |     | 1 |     | 0 | . |
|   |                              |     |     |     |   |     |   | 5 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Gree                         | 8   | 1,2 | 71% | 2 | 61% | 2 | 1 |
| 1 | nville-Spartanburg-Anderson, | 85, | 48, |     | 8 |     | 7 | 8 |
|   | SC-NC                        | 169 | 824 |     | 4 |     | 3 | 3 |
|   |                              |     |     |     | 0 |     | 1 | . |
|   |                              |     |     |     |   |     |   | 6 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Chattanooga, TN-GA           | 5   | 7   | 71% | 2 | 60% | 2 | 1 |
| 3 |                              | 14, | 20, |     | 8 |     | 4 | 4 |
|   |                              | 315 | 375 |     | 9 |     | 7 | 5 |
|   |                              |     |     |     | 2 |     | 6 | . |
|   |                              |     |     |     |   |     |   | 3 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Cincinnati-Hamilton,         | 1,5 | 2,1 | 71% | 2 | 62% | 2 | 2 |
| 9 | OH-KY-IN                     | 61, | 84, |     | 3 |     | 1 | 9 |
|   |                              | 714 | 860 |     | 5 |     | 3 | 4 |
|   |                              |     |     |     | 7 |     | 6 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | Lake Charles, LA             | 3   | 5   | 71% | 2 | 54% | 2 | 5 |
| 6 |                              | 80, | 36, |     | 9 |     | 6 | 2 |
|   |                              | 920 | 758 |     | 0 |     | 8 | . |
|   |                              |     |     |     | 6 |     | 0 | 4 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | Springfield, IL-MO           | 3   | 5   | 71% | 3 | 62% | 3 | 5 |
| 7 |                              | 64, | 17, |     | 5 |     | 5 | 8 |
|   |                              | 828 | 462 |     | 8 |     | 1 | . |
|   |                              |     |     |     | 9 |     | 8 | 2 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Minneapolis-St. Paul,        | 3,2 | 4,4 | 71% | 1 | 64% | 1 | 8 |
| 0 | MN-WI-IA                     | 05, | 98, |     | 9 |     | 5 | 2 |
| 7 |                              | 089 | 286 |     | 1 |     | 5 | . |
|   |                              |     |     |     | 0 |     | 4 | 9 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Casper, WY-ID-UT             | 2   | 4   | 71% | 4 | 61% | 4 | 5 |
| 4 |                              | 88, | 08, |     | 5 |     | 3 | . |
| 3 |                              | 281 | 708 |     | 7 |     | 7 | 1 |
|   |                              |     |     |     | 7 |     | 8 | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Idaho Falls, ID-WY           | 2   | 3   | 71% | 2 | 63% | 2 | 1 |
| 4 |                              | 15, | 06, |     | 5 |     | 5 | 0 |
| 8 |                              | 833 | 120 |     | 2 |     | 4 | . |
|   |                              |     |     |     | 2 |     | 0 | 8 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Boise City, ID-OR            | 4   | 5   | 71% | 2 | 61% | 2 | 1 |
| 5 |                              | 09, | 74, |     | 6 |     | 3 | 3 |
| 0 |                              | 295 | 876 |     | 4 |     | 9 | . |
|   |                              |     |     |     | 3 |     | 1 | 6 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Salt Lake City-Ogden, UT-ID  | 1,4 | 2,0 | 71% | 2 | 61% | 2 | 3 |
| 5 |                              | 79, | 88, |     | 1 |     | 1 | 5 |
| 2 |                              | 612 | 974 |     | 9 |     | 3 | . |
|   |                              |     |     |     | 2 |     | 7 | 6 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Albuquerque, NM-AZ           | 6   | 9   | 71% | 2 | 60% | 2 | 2 |
| 5 |                              | 51, | 21, |     | 0 |     | 0 | 0 |
| 6 |                              | 793 | 086 |     | 4 |     | 1 | . |
|   |                              |     |     |     | 6 |     | 2 | 8 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 3 | Albany, GA                   | 3   | 4   | 70% | 2 | 58% | 2 | 6 |
| 7 |                              | 26, | 68, |     | 3 |     | 5 | 2 |
|   |                              | 796 | 178 |     | 0 |     | 4 | . |
|   |                              |     |     |     | 6 |     | 0 | 7 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Indianapolis, IN-IL          | 2,1 | 3,0 | 70% | 3 | 58% | 2 | 1 |
| 7 |                              | 56, | 66, |     | 0 |     | 7 | 7 |
|   |                              | 501 | 469 |     | 2 |     | 2 | 1 |
|   |                              |     |     |     | 1 |     | 1 | . |
|   |                              |     |     |     |   |     |   | 3 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | St. Louis, MO-IL             | 2,5 | 3,5 | 70% | 2 | 61% | 2 | 1 |
| 6 |                              | 03, | 58, |     | 7 |     | 6 | 2 |
|   |                              | 004 | 651 |     | 5 |     | 1 | 7 |
|   |                              |     |     |     | 1 |     | 3 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Harrisburg-Lebanon-Carlisle, | 7   | 1,1 | 69% | 3 | 61% | 2 | 2 |
| 1 | PA                           | 79, | 25, |     | 0 |     | 9 | 9 |
|   |                              | 990 | 265 |     | 2 |     | 0 | 2 |
|   |                              |     |     |     | 8 |     | 6 | . |
|   |                              |     |     |     |   |     |   | 4 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Evansville-Henderson,        | 5   | 8   | 69% | 4 | 56% | 3 | 7 |
| 9 | IN-KY-IL                     | 85, | 54, |     | 0 |     | 8 | 5 |
|   |                              | 718 | 714 |     | 0 |     | 5 | . |
|   |                              |     |     |     | 3 |     | 1 | 3 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Odessa-Midland, TX           | 2   | 3   | 69% | 3 | 56% | 3 | 1 |
| 3 |                              | 66, | 88, |     | 4 |     | 4 | 0 |
| 5 |                              | 150 | 007 |     | 8 |     | 1 | . |
|   |                              |     |     |     | 3 |     | 1 | 1 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Staunton, VA-WV              | 2   | 3   | 68% | 2 | 57% | 1 | 5 |
| 6 |                              | 27, | 34, |     | 0 |     | 8 | 0 |
|   |                              | 848 | 087 |     | 3 |     | 4 | . |
|   |                              |     |     |     | 6 |     | 9 | 9 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | G                            | 1,2 | 1,8 | 68% | 1 | 58% | 1 | 1 |
| 8 | reensboro-Winston-Salem-High | 64, | 54, |     | 9 |     | 8 | 8 |
|   | Point, NC-VA                 | 918 | 853 |     | 8 |     | 2 | 9 |
|   |                              |     |     |     | 0 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 0 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Dayton-Springfield, OH       | 7   | 1,1 | 68% | 2 | 59% | 2 | 3 |
| 0 |                              | 75, | 33, |     | 6 |     | 3 | 1 |
|   |                              | 636 | 004 |     | 6 |     | 5 | 8 |
|   |                              |     |     |     | 2 |     | 4 | . |
|   |                              |     |     |     |   |     |   | 5 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Jackson, MS-AL-LA            | 9   | 1,4 | 68% | 3 | 56% | 2 | 4 |
| 7 |                              | 70, | 32, |     | 1 |     | 8 | 9 |
|   |                              | 771 | 518 |     | 0 |     | 8 | . |
|   |                              |     |     |     | 8 |     | 3 | 6 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | Monroe, LA                   | 2   | 3   | 68% | 4 | 59% | 4 | 5 |
| 9 |                              | 27, | 33, |     | 0 |     | 0 | 6 |
|   |                              | 890 | 519 |     | 5 |     | 4 | . |
|   |                              |     |     |     | 1 |     | 4 | 1 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | Little Rock-North Little     | 1,0 | 1,6 | 68% | 4 | 60% | 3 | 4 |
| 0 | Rock, AR                     | 98, | 14, |     | 1 |     | 9 | 6 |
|   |                              | 112 | 850 |     | 6 |     | 6 | . |
|   |                              |     |     |     | 3 |     | 8 | 0 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | Fay                          | 2   | 4   | 68% | 3 | 59% | 3 | 8 |
| 2 | etteville-Springdale-Rogers, | 74, | 05, |     | 9 |     | 6 | 8 |
|   | AR-MO-OK                     | 800 | 160 |     | 6 |     | 8 | . |
|   |                              |     |     |     | 0 |     | 5 | 4 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Wichita, KS-OK               | 8   | 1,1 | 68% | 2 | 57% | 1 | 2 |
| 2 |                              | 00, | 75, |     | 1 |     | 8 | 0 |
| 2 |                              | 782 | 577 |     | 5 |     | 6 | . |
|   |                              |     |     |     | 4 |     | 2 | 4 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Lubbock, TX                  | 2   | 3   | 68% | 2 | 60% | 2 | 2 |
| 3 |                              | 53, | 74, |     | 8 |     | 6 | 7 |
| 7 |                              | 694 | 626 |     | 4 |     | 6 | . |
|   |                              |     |     |     | 1 |     | 9 | 1 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 3 | Macon, GA                    | 5   | 7   | 67% | 2 | 56% | 1 | 6 |
| 8 |                              | 12, | 68, |     | 2 |     | 8 | 2 |
|   |                              | 836 | 701 |     | 4 |     | 6 | . |
|   |                              |     |     |     | 2 |     | 8 | 8 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Milwaukee-Racine, WI         | 1,5 | 2,2 | 67% | 2 | 61% | 2 | 3 |
| 3 |                              | 02, | 55, |     | 3 |     | 3 | 6 |
|   |                              | 765 | 183 |     | 4 |     | 3 | 6 |
|   |                              |     |     |     | 4 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 8 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | Mobile, AL                   | 4   | 6   | 67% | 3 | 63% | 2 | 7 |
| 0 |                              | 51, | 76, |     | 2 |     | 4 | 4 |
|   |                              | 303 | 258 |     | 9 |     | 3 | . |
|   |                              |     |     |     | 1 |     | 1 | 7 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Rochester, MN-IA-WI          | 2   | 3   | 67% | 3 | 61% | 3 | 5 |
| 0 |                              | 14, | 18, |     | 2 |     | 1 | 5 |
| 6 |                              | 030 | 374 |     | 4 |     | 7 | . |
|   |                              |     |     |     | 6 |     | 6 | 6 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Corpus Christi, TX           | 3   | 5   | 67% | 3 | 57% | 2 | 4 |
| 3 |                              | 66, | 49, |     | 0 |     | 8 | 6 |
| 2 |                              | 378 | 012 |     | 6 |     | 3 | . |
|   |                              |     |     |     | 6 |     | 4 | 4 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Salisbury, MD-DE-VA          | 2   | 3   | 66% | 5 | 54% | 5 | 1 |
| 4 |                              | 39, | 63, |     | 1 |     | 6 | 1 |
|   |                              | 395 | 970 |     | 0 |     | 9 | 1 |
|   |                              |     |     |     | 1 |     | 3 | . |
|   |                              |     |     |     |   |     |   | 1 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 3 | Columbus, GA-AL              | 3   | 4   | 66% | 2 | 69% | 1 | 8 |
| 9 |                              | 29, | 96, |     | 1 |     | 6 | 4 |
|   |                              | 335 | 538 |     | 8 |     | 6 | . |
|   |                              |     |     |     | 6 |     | 9 | 0 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Tupelo, MS-AL-TN             | 4   | 6   | 66% | 5 | 57% | 4 | 4 |
| 5 |                              | 11, | 25, |     | 0 |     | 8 | 9 |
|   |                              | 182 | 002 |     | 3 |     | 2 | . |
|   |                              |     |     |     | 4 |     | 0 | 7 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | Shreveport-Bossier City,     | 3   | 5   | 66% | 3 | 55% | 3 | 5 |
| 8 | LA-AR                        | 76, | 73, |     | 3 |     | 3 | 7 |
|   |                              | 462 | 616 |     | 8 |     | 8 | . |
|   |                              |     |     |     | 9 |     | 7 | 9 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | Joplin, MO-KS-OK             | 1   | 2   | 66% | 3 | 56% | 3 | 7 |
| 3 |                              | 74, | 63, |     | 1 |     | 1 | 4 |
|   |                              | 937 | 904 |     | 6 |     | 3 | . |
|   |                              |     |     |     | 2 |     | 3 | 6 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Sioux Falls, SD-IA-MN-NE     | 3   | 5   | 66% | 3 | 58% | 3 | 1 |
| 1 |                              | 44, | 19, |     | 7 |     | 5 | 5 |
| 6 |                              | 606 | 143 |     | 5 |     | 6 | . |
|   |                              |     |     |     | 4 |     | 7 | 1 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Omaha, NE-IA-MO              | 6   | 1,0 | 66% | 2 | 60% | 1 | 6 |
| 1 |                              | 90, | 44, |     | 3 |     | 9 | 2 |
| 8 |                              | 413 | 156 |     | 1 |     | 8 | . |
|   |                              |     |     |     | 0 |     | 5 | 4 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Lincoln, NE                  | 2   | 3   | 66% | 5 | 62% | 3 | 5 |
| 1 |                              | 50, | 79, |     | 4 |     | 8 | 0 |
| 9 |                              | 803 | 321 |     | 8 |     | 1 | . |
|   |                              |     |     |     | 4 |     | 9 | 2 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Tulsa, OK-KS                 | 9   | 1,3 | 66% | 2 | 59% | 2 | 7 |
| 2 |                              | 17, | 84, |     | 6 |     | 7 | 2 |
| 4 |                              | 117 | 426 |     | 9 |     | 7 | . |
|   |                              |     |     |     | 4 |     | 7 | 4 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Twin Falls, ID               | 1   | 1   | 66% | 2 | 58% | 2 | 1 |
| 4 |                              | 07, | 62, |     | 4 |     | 4 | 4 |
| 9 |                              | 304 | 397 |     | 1 |     | 2 | . |
|   |                              |     |     |     | 3 |     | 9 | 0 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Fresno, CA                   | 9   | 1,4 | 66% | 3 | 55% | 3 | 9 |
| 6 |                              | 30, | 19, |     | 1 |     | 3 | 8 |
| 2 |                              | 478 | 998 |     | 2 |     | 8 | . |
|   |                              |     |     |     | 2 |     | 7 | 6 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Eugene-Springfield, OR-CA    | 5   | 7   | 66% | 1 | 57% | 1 | 4 |
| 6 |                              | 22, | 91, |     | 8 |     | 9 | 3 |
| 6 |                              | 915 | 776 |     | 8 |     | 3 | . |
|   |                              |     |     |     | 2 |     | 8 | 1 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Portland, ME                 | 4   | 7   | 65% | 2 | 58% | 2 | 9 |
|   |                              | 89, | 48, |     | 4 |     | 6 | 8 |
|   |                              | 986 | 817 |     | 7 |     | 1 | . |
|   |                              |     |     |     | 9 |     | 4 | 5 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Albany-Schenectady-Troy, NY  | 7   | 1,1 | 65% | 3 | 57% | 2 | 1 |
|   |                              | 64, | 71, |     | 1 |     | 7 | 3 |
|   |                              | 498 | 669 |     | 3 |     | 4 | 4 |
|   |                              |     |     |     | 8 |     | 0 | . |
|   |                              |     |     |     |   |     |   | 7 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Greenville, NC               | 5   | 8   | 65% | 2 | 56% | 2 | 8 |
| 1 |                              | 32, | 23, |     | 6 |     | 6 | 7 |
|   |                              | 002 | 517 |     | 6 |     | 8 | . |
|   |                              |     |     |     | 0 |     | 7 | 7 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 2 | Augusta-Aiken, GA-SC         | 3   | 6   | 65% | 2 | 57% | 2 | 8 |
| 7 |                              | 95, | 04, |     | 0 |     | 0 | 9 |
|   |                              | 954 | 799 |     | 2 |     | 0 | . |
|   |                              |     |     |     | 1 |     | 4 | 7 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | Springfield, MO              | 5   | 8   | 65% | 3 | 56% | 3 | 4 |
| 4 |                              | 56, | 59, |     | 3 |     | 3 | 8 |
|   |                              | 416 | 559 |     | 5 |     | 0 | . |
|   |                              |     |     |     | 0 |     | 3 | 1 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Peoria-Pekin, IL             | 3   | 5   | 65% | 3 | 56% | 3 | 9 |
| 0 |                              | 44, | 28, |     | 3 |     | 4 | 0 |
| 1 |                              | 542 | 671 |     | 4 |     | 5 | . |
|   |                              |     |     |     | 3 |     | 1 | 9 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Davenport-Moline-Rock        | 3   | 5   | 65% | 2 | 57% | 2 | 1 |
| 0 | Island, IA-IL                | 65, | 58, |     | 6 |     | 5 | 0 |
| 2 |                              | 550 | 913 |     | 6 |     | 1 | 8 |
|   |                              |     |     |     | 6 |     | 4 | . |
|   |                              |     |     |     |   |     |   | 2 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Pittsburgh, PA-WV            | 1,9 | 2,9 | 64% | 2 | 57% | 2 | 2 |
| 3 |                              | 07, | 71, |     | 8 |     | 6 | 8 |
|   |                              | 756 | 829 |     | 8 |     | 4 | 4 |
|   |                              |     |     |     | 7 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 7 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Cleveland-Akron, OH-PA       | 2,9 | 4,6 | 64% | 2 | 54% | 2 | 4 |
| 5 |                              | 94, | 92, |     | 3 |     | 2 | 2 |
|   |                              | 142 | 460 |     | 6 |     | 6 | 7 |
|   |                              |     |     |     | 8 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 8 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Billings, MT-WY              | 2   | 4   | 64% | 4 | 55% | 4 | 4 |
| 4 |                              | 60, | 04, |     | 5 |     | 3 | . |
| 4 |                              | 249 | 902 |     | 8 |     | 9 | 8 |
|   |                              |     |     |     | 1 |     | 7 | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Green Bay, WI-MI             | 4   | 6   | 63% | 2 | 56% | 2 | 3 |
| 9 |                              | 19, | 71, |     | 5 |     | 4 | 4 |
|   |                              | 852 | 225 |     | 8 |     | 6 | . |
|   |                              |     |     |     | 3 |     | 8 | 1 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Appleton-Oshkosh-Neenah, WI  | 2   | 4   | 63% | 2 | 54% | 2 | 1 |
| 0 |                              | 72, | 33, |     | 1 |     | 4 | 4 |
|   |                              | 802 | 250 |     | 1 |     | 2 | 3 |
|   |                              |     |     |     | 8 |     | 7 | . |
|   |                              |     |     |     |   |     |   | 6 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Grand                        | 1,1 | 1,8 | 63% | 2 | 55% | 2 | 2 |
| 2 | Rapids-Muskegon-Holland, MI  | 79, | 81, |     | 9 |     | 2 | 0 |
|   |                              | 499 | 991 |     | 2 |     | 0 | 6 |
|   |                              |     |     |     | 6 |     | 4 | . |
|   |                              |     |     |     |   |     |   | 7 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Champaign-Urbana, IL         | 3   | 6   | 63% | 3 | 54% | 2 | 7 |
| 8 |                              | 94, | 30, |     | 0 |     | 9 | 3 |
|   |                              | 350 | 898 |     | 9 |     | 2 | . |
|   |                              |     |     |     | 7 |     | 3 | 4 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Des Moines, IA-IL-MO         | 1,0 | 1,6 | 63% | 2 | 56% | 3 | 4 |
| 0 |                              | 61, | 83, |     | 9 |     | 0 | 7 |
| 0 |                              | 186 | 257 |     | 4 |     | 1 | . |
|   |                              |     |     |     | 7 |     | 1 | 3 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Madison, WI-IL-IA            | 5   | 9   | 63% | 4 | 57% | 4 | 7 |
| 0 |                              | 91, | 33, |     | 0 |     | 2 | 1 |
| 4 |                              | 008 | 823 |     | 0 |     | 3 | . |
|   |                              |     |     |     | 9 |     | 7 | 3 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Abilene, TX                  | 1   | 2   | 63% | 3 | 52% | 3 | 2 |
| 2 |                              | 39, | 22, |     | 4 |     | 0 | 0 |
| 8 |                              | 810 | 147 |     | 4 |     | 9 | . |
|   |                              |     |     |     | 9 |     | 5 | 3 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Amarillo, TX-NM              | 3   | 4   | 63% | 2 | 56% | 1 | 1 |
| 3 |                              | 02, | 81, |     | 0 |     | 6 | 1 |
| 8 |                              | 510 | 633 |     | 3 |     | 9 | . |
|   |                              |     |     |     | 9 |     | 5 | 7 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Missoula, MT                 | 2   | 3   | 63% | 4 | 53% | 4 | 1 |
| 4 |                              | 52, | 99, |     | 7 |     | 7 | 0 |
| 6 |                              | 695 | 183 |     | 3 |     | 6 | . |
|   |                              |     |     |     | 7 |     | 2 | 7 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Redding, CA-OR               | 2   | 3   | 63% | 2 | 55% | 2 | 1 |
| 6 |                              | 13, | 36, |     | 3 |     | 0 | 4 |
| 5 |                              | 119 | 820 |     | 2 |     | 3 | . |
|   |                              |     |     |     | 5 |     | 1 | 3 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Richland-Kennewick-Pasco, WA | 4   | 6   | 63% | 2 | 54% | 2 | 2 |
| 6 |                              | 24, | 77, |     | 5 |     | 6 | 7 |
| 9 |                              | 544 | 674 |     | 8 |     | 3 | . |
|   |                              |     |     |     | 3 |     | 8 | 6 |
|   |                              |     |     |     |   |     |   | 8 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Roanoke, VA-NC-WV            | 5   | 8   | 62% | 1 | 53% | 1 | 9 |
| 7 |                              | 11, | 26, |     | 9 |     | 8 | 7 |
|   |                              | 813 | 284 |     | 8 |     | 9 | . |
|   |                              |     |     |     | 8 |     | 8 | 8 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Johnson                      | 3   | 5   | 62% | 2 | 54% | 1 | 1 |
| 5 | City-Kingsport-Bristol,      | 59, | 76, |     | 1 |     | 9 | 4 |
|   | TN-VA                        | 589 | 081 |     | 3 |     | 4 | 4 |
|   |                              |     |     |     | 4 |     | 5 | . |
|   |                              |     |     |     |   |     |   | 5 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Toledo, OH                   | 8   | 1,2 | 62% | 3 | 54% | 2 | 1 |
| 6 |                              | 00, | 94, |     | 0 |     | 8 | 6 |
|   |                              | 279 | 395 |     | 4 |     | 7 | 3 |
|   |                              |     |     |     | 9 |     | 3 | . |
|   |                              |     |     |     |   |     |   | 9 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Fort Wayne, IN               | 4   | 7   | 62% | 3 | 53% | 3 | 1 |
| 6 |                              | 50, | 25, |     | 2 |     | 2 | 5 |
|   |                              | 281 | 847 |     | 9 |     | 7 | 8 |
|   |                              |     |     |     | 4 |     | 4 | . |
|   |                              |     |     |     |   |     |   | 5 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Topeka, KS                   | 2   | 4   | 62% | 2 | 55% | 1 | 3 |
| 2 |                              | 83, | 54, |     | 3 |     | 7 | 5 |
| 3 |                              | 135 | 539 |     | 0 |     | 6 | . |
|   |                              |     |     |     | 8 |     | 0 | 6 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | McAllen-Edinburg-Mission, TX | 6   | 9   | 62% | 3 | 50% | 2 | 2 |
| 3 |                              | 08, | 78, |     | 4 |     | 9 | 2 |
| 3 |                              | 620 | 369 |     | 2 |     | 0 | 1 |
|   |                              |     |     |     | 3 |     | 2 | . |
|   |                              |     |     |     |   |     |   | 9 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Hobbs, NM-TX                 | 1   | 1   | 62% | 3 | 52% | 3 | 1 |
| 3 |                              | 17, | 90, |     | 2 |     | 1 | 1 |
| 6 |                              | 764 | 340 |     | 8 |     | 9 | . |
|   |                              |     |     |     | 3 |     | 8 | 2 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Scottsbluff, NE-WY           | 57, | 92, | 62% | 6 | 56% | 7 | 7 |
| 4 |                              | 143 | 360 |     | 4 |     | 0 | . |
| 2 |                              |     |     |     | 4 |     | 6 | 8 |
|   |                              |     |     |     | 0 |     | 4 | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Spokane, WA-ID               | 5   | 8   | 62% | 2 | 54% | 2 | 2 |
| 4 |                              | 18, | 29, |     | 8 |     | 6 | 3 |
| 7 |                              | 155 | 735 |     | 1 |     | 0 | . |
|   |                              |     |     |     | 5 |     | 9 | 6 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | North Platte, NE-CO          | 37, | 61, | 61% | 8 | 57% | 7 | 4 |
| 2 |                              | 616 | 758 |     | 7 |     | 0 | . |
| 1 |                              |     |     |     | 2 |     | 1 | 9 |
|   |                              |     |     |     | 0 |     | 8 | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Santa Fe, NM                 | 1   | 2   | 61% | 3 | 54% | 3 | 1 |
| 3 |                              | 58, | 58, |     | 0 |     | 0 | 3 |
| 9 |                              | 172 | 790 |     | 3 |     | 1 | . |
|   |                              |     |     |     | 1 |     | 4 | 0 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Hickory-Morganton, NC-TN     | 3   | 5   | 60% | 2 | 51% | 2 | 1 |
| 6 |                              | 13, | 19, |     | 5 |     | 4 | 3 |
|   |                              | 298 | 208 |     | 0 |     | 2 | 1 |
|   |                              |     |     |     | 0 |     | 8 | . |
|   |                              |     |     |     |   |     |   | 9 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | Jonesboro, AR-MO             | 1   | 3   | 60% | 4 | 51% | 4 | 5 |
| 5 |                              | 82, | 03, |     | 7 |     | 6 | 1 |
|   |                              | 232 | 852 |     | 7 |     | 5 | . |
|   |                              |     |     |     | 3 |     | 7 | 3 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Minot, ND                    | 66, | 1   | 60% | 3 | 60% | 3 | 7 |
| 1 |                              | 459 | 11, |     | 8 |     | 4 | . |
| 1 |                              |     | 195 |     | 5 |     | 6 | 0 |
|   |                              |     |     |     | 8 |     | 5 | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Bismarck, ND-MT-SD           | 1   | 1   | 60% | 4 | 52% | 5 | 6 |
| 1 |                              | 05, | 75, |     | 8 |     | 0 | . |
| 2 |                              | 492 | 427 |     | 3 |     | 0 | 2 |
|   |                              |     |     |     | 8 |     | 5 | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Fargo-Moorhead, ND-MN        | 2   | 3   | 60% | 3 | 54% | 2 | 1 |
| 1 |                              | 23, | 71, |     | 0 |     | 8 | 6 |
| 3 |                              | 859 | 691 |     | 0 |     | 0 | . |
|   |                              |     |     |     | 8 |     | 6 | 4 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Oklahoma City, OK            | 1,0 | 1,6 | 60% | 2 | 61% | 3 | 6 |
| 2 |                              | 22, | 98, |     | 5 |     | 7 | 5 |
| 5 |                              | 155 | 197 |     | 7 |     | 1 | . |
|   |                              |     |     |     | 4 |     | 4 | 0 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | El Paso, TX-NM               | 5   | 9   | 60% | 2 | 49% | 2 | 3 |
| 5 |                              | 77, | 55, |     | 4 |     | 1 | 3 |
| 7 |                              | 453 | 602 |     | 0 |     | 3 | . |
|   |                              |     |     |     | 3 |     | 1 | 0 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Elkhart-Goshen, IN-MI        | 5   | 9   | 59% | 2 | 50% | 2 | 1 |
| 5 |                              | 51, | 36, |     | 4 |     | 1 | 8 |
|   |                              | 262 | 245 |     | 3 |     | 9 | 5 |
|   |                              |     |     |     | 6 |     | 7 | . |
|   |                              |     |     |     |   |     |   | 7 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Montgomery, AL               | 2   | 4   | 59% | 2 | 68% | 1 | 6 |
| 9 |                              | 83, | 81, |     | 1 |     | 7 | 6 |
|   |                              | 576 | 137 |     | 9 |     | 2 | . |
|   |                              |     |     |     | 6 |     | 4 | 8 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | Fort Smith, AR-OK            | 1   | 3   | 59% | 3 | 51% | 3 | 4 |
| 1 |                              | 94, | 29, |     | 8 |     | 6 | 6 |
|   |                              | 148 | 136 |     | 6 |     | 5 | . |
|   |                              |     |     |     | 0 |     | 5 | 5 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Grand Island, NE             | 1   | 2   | 59% | 9 | 55% | 6 | 1 |
| 2 |                              | 68, | 88, |     | 0 |     | 6 | 1 |
| 0 |                              | 676 | 047 |     | 4 |     | 5 | . |
|   |                              |     |     |     | 3 |     | 4 | 5 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Rapid City, SD-MT-NE-ND      | 1   | 2   | 59% | 4 | 52% | 4 | 5 |
| 1 |                              | 26, | 13, |     | 6 |     | 6 | . |
| 5 |                              | 199 | 696 |     | 8 |     | 7 | 0 |
|   |                              |     |     |     | 8 |     | 2 | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Syracuse, NY-PA              | 1,1 | 1,9 | 58% | 3 | 51% | 3 | 1 |
|   |                              | 11, | 02, |     | 6 |     | 4 | 0 |
|   |                              | 128 | 640 |     | 6 |     | 6 | 4 |
|   |                              |     |     |     | 7 |     | 1 | . |
|   |                              |     |     |     |   |     |   | 7 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Rochester, NY-PA             | 8   | 1,4 | 58% | 4 | 52% | 3 | 1 |
|   |                              | 65, | 93, |     | 0 |     | 5 | 6 |
|   |                              | 630 | 518 |     | 1 |     | 3 | 7 |
|   |                              |     |     |     | 7 |     | 0 | . |
|   |                              |     |     |     |   |     |   | 2 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 8 | Buffalo-Niagara Falls, NY-PA | 8   | 1,5 | 58% | 2 | 51% | 2 | 2 |
|   |                              | 79, | 07, |     | 9 |     | 5 | 1 |
|   |                              | 395 | 759 |     | 8 |     | 9 | 2 |
|   |                              |     |     |     | 0 |     | 7 | . |
|   |                              |     |     |     |   |     |   | 8 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 6 | Traverse City, MI            | 1   | 2   | 58% | 4 | 54% | 4 | 5 |
| 1 |                              | 65, | 86, |     | 2 |     | 1 | 0 |
|   |                              | 381 | 745 |     | 2 |     | 9 | . |
|   |                              |     |     |     | 0 |     | 2 | 6 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Paducah, KY-IL               | 1   | 2   | 57% | 5 | 46% | 6 | 7 |
| 2 |                              | 28, | 26, |     | 6 |     | 1 | 0 |
|   |                              | 444 | 586 |     | 3 |     | 3 | . |
|   |                              |     |     |     | 0 |     | 7 | 0 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Sioux City, IA-NE-SD         | 1   | 2   | 57% | 3 | 48% | 3 | 3 |
| 1 |                              | 43, | 52, |     | 6 |     | 4 | 9 |
| 7 |                              | 266 | 656 |     | 7 |     | 3 | . |
|   |                              |     |     |     | 1 |     | 7 | 5 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Western Oklahoma, OK         | 79, | 1   | 57% | 2 | 52% | 2 | 1 |
| 2 |                              | 124 | 39, |     | 5 |     | 9 | 2 |
| 6 |                              |     | 761 |     | 7 |     | 5 | . |
|   |                              |     |     |     | 4 |     | 6 | 0 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Anchorage, AK                | 3   | 6   | 57% | 4 | 51% | 4 | 1 |
| 7 |                              | 55, | 26, |     | 1 |     | 4 | . |
| 1 |                              | 240 | 932 |     | 9 |     | 3 | 0 |
|   |                              |     |     |     | 8 |     | 6 | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Bangor, ME                   | 2   | 5   | 56% | 4 | 51% | 4 | 2 |
|   |                              | 94, | 26, |     | 9 |     | 8 | 0 |
|   |                              | 771 | 106 |     | 3 |     | 6 | . |
|   |                              |     |     |     | 2 |     | 2 | 9 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Burlington, VT-NY            | 3   | 6   | 56% | 4 | 47% | 4 | 5 |
|   |                              | 39, | 05, |     | 8 |     | 6 | 7 |
|   |                              | 019 | 393 |     | 8 |     | 8 | . |
|   |                              |     |     |     | 5 |     | 6 | 6 |
|   |                              |     |     |     |   |     |   | 2 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Lexington, KY-TN-VA-WV       | 1,0 | 1,8 | 56% | 2 | 47% | 2 | 8 |
| 7 |                              | 38, | 51, |     | 7 |     | 2 | 0 |
|   |                              | 532 | 367 |     | 6 |     | 2 | . |
|   |                              |     |     |     | 8 |     | 9 | 3 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Grand Forks, ND-MN           | 1   | 2   | 56% | 3 | 49% | 3 | 1 |
| 1 |                              | 29, | 30, |     | 9 |     | 9 | 0 |
| 0 |                              | 534 | 253 |     | 2 |     | 7 | . |
|   |                              |     |     |     | 2 |     | 3 | 1 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 9 | State College, PA            | 4   | 8   | 55% | 4 | 49% | 3 | 9 |
|   |                              | 45, | 09, |     | 0 |     | 7 | 2 |
|   |                              | 347 | 979 |     | 3 |     | 2 | . |
|   |                              |     |     |     | 5 |     | 4 | 4 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Duluth-Superior, MN-WI       | 1   | 3   | 55% | 3 | 48% | 3 | 1 |
| 0 |                              | 91, | 50, |     | 4 |     | 7 | 8 |
| 9 |                              | 475 | 059 |     | 6 |     | 2 | . |
|   |                              |     |     |     | 4 |     | 0 | 5 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Pueblo, CO-NM                | 1   | 2   | 54% | 2 | 49% | 2 | 8 |
| 4 |                              | 51, | 79, |     | 6 |     | 3 | . |
| 0 |                              | 911 | 600 |     | 5 |     | 8 | 7 |
|   |                              |     |     |     | 4 |     | 5 | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 3 | Dothan, AL-FL-GA             | 1   | 3   | 51% | 2 | 58% | 2 | 5 |
| 6 |                              | 68, | 32, |     | 0 |     | 2 | 3 |
|   |                              | 520 | 409 |     | 3 |     | 2 | . |
|   |                              |     |     |     | 9 |     | 5 | 7 |
|   |                              |     |     |     |   |     |   | 0 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Wausau, WI                   | 2   | 4   | 51% | 2 | 45% | 2 | 3 |
| 0 |                              | 50, | 87, |     | 1 |     | 3 | 4 |
| 8 |                              | 248 | 723 |     | 7 |     | 1 | . |
|   |                              |     |     |     | 7 |     | 4 | 1 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 4 | Charleston, WV-KY-OH         | 6   | 1,1 | 50% | 2 | 44% | 2 | 8 |
| 8 |                              | 02, | 99, |     | 5 |     | 3 | 5 |
|   |                              | 908 | 373 |     | 9 |     | 2 | . |
|   |                              |     |     |     | 0 |     | 3 | 3 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Great Falls, MT              | 83, | 1   | 50% | 4 | 44% | 4 | 4 |
| 4 |                              | 336 | 66, |     | 4 |     | 2 | . |
| 5 |                              |     | 564 |     | 0 |     | 9 | 2 |
|   |                              |     |     |     | 9 |     | 0 | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Wheeling, WV-OH              | 1   | 3   | 49% | 4 | 42% | 4 | 1 |
| 2 |                              | 58, | 27, |     | 1 |     | 1 | 2 |
|   |                              | 946 | 645 |     | 5 |     | 8 | 4 |
|   |                              |     |     |     | 8 |     | 8 | . |
|   |                              |     |     |     |   |     |   | 5 |
|   |                              |     |     |     |   |     |   | 4 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | La Crosse, WI-MN             | 1   | 2   | 49% | 4 | 44% | 4 | 5 |
| 0 |                              | 18, | 41, |     | 0 |     | 0 | 3 |
| 5 |                              | 583 | 903 |     | 0 |     | 4 | . |
|   |                              |     |     |     | 8 |     | 5 | 6 |
|   |                              |     |     |     |   |     |   | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Erie, PA                     | 2   | 5   | 48% | 4 | 44% | 4 | 1 |
| 4 |                              | 51, | 19, |     | 2 |     | 0 | 1 |
|   |                              | 423 | 348 |     | 5 |     | 4 | 6 |
|   |                              |     |     |     | 5 |     | 9 | . |
|   |                              |     |     |     |   |     |   | 4 |
|   |                              |     |     |     |   |     |   | 1 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Pendleton, OR-WA             | 96, | 2   | 48% | 2 | 43% | 3 | 8 |
| 6 |                              | 098 | 00, |     | 8 |     | 3 | . |
| 8 |                              |     | 681 |     | 6 |     | 2 | 6 |
|   |                              |     |     |     | 1 |     | 7 | 7 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 7 | Greenville, MS               | 1   | 2   | 47% | 3 | 40% | 3 | 4 |
| 6 |                              | 19, | 52, |     | 2 |     | 4 | 0 |
|   |                              | 346 | 280 |     | 4 |     | 1 | . |
|   |                              |     |     |     | 9 |     | 1 | 9 |
|   |                              |     |     |     |   |     |   | 6 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | San Angelo, TX               | 89, | 2   | 44% | 3 | 37% | 2 | 1 |
| 2 |                              | 637 | 02, |     | 1 |     | 8 | 0 |
| 9 |                              |     | 679 |     | 6 |     | 7 | . |
|   |                              |     |     |     | 7 |     | 1 | 0 |
|   |                              |     |     |     |   |     |   | 5 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 5 | Northern Michigan, MI        | 1   | 2   | 41% | 4 | 38% | 4 | 2 |
| 8 |                              | 10, | 69, |     | 4 |     | 5 | 8 |
|   |                              | 176 | 986 |     | 3 |     | 6 | . |
|   |                              |     |     |     | 7 |     | 3 | 5 |
|   |                              |     |     |     |   |     |   | 3 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+
| 1 | Aberdeen, SD                 | \*  | 82, | \*  | \ | \*  | \ | 5 |
| 1 |                              |     | 608 |     | * |     | * | . |
| 4 |                              |     |     |     |   |     |   | 3 |
|   |                              |     |     |     |   |     |   | 9 |
+---+------------------------------+-----+-----+-----+---+-----+---+---+

\* Data withheld to maintain firm confidentiality.

Source: Federal Communications Commission internal analysis based on
preliminary year-end 2005 filings for Numbering Resource Utilization in
the United States. Population based on 2000 Census. Density is persons
per square mile.

**Table 4: Top 25 Mobile Telephone Operators by Subscribers**

**(in thousands)**

  ---- ----------------------- ---------- ---------------------- ----------
       Year-End 2004                      Year-End 2005          

       Operator                Total      Operator               Total

  1    Cingular Wireless       49,109     Cingular Wireless      54,144

  2    Verizon Wireless        43,816     Verizon Wireless       51,337

  3    Sprint PCS              21,507     Sprint Nextel (3) (4)  44,815

  4    T-Mobile                17,314     T-Mobile               21,690

  5    Nextel                  16,247     Alltel (5)             10,662

  6    Alltel                  8,626      US Cellular            4,945

  7    US Cellular             4,945      Nextel Partners (4)    2,018

  8    Dobson Comm.            1,609      MetroPCS (6)           2,000

  9    Nextel Partners         1,602      Leap                   1,668

  10   Leap                    1,569      Dobson Comm.           1,543

  11   MetroPCS                1,500      Centennial (7)         1,338

  12   Western Wireless        1,395      Alamosa PCS (4) (8)    1,000

  13   Centennial (1)          1,108      Suncom                 966

  14   Suncom                  951        Rural Cellular         706

  15   Alamosa PCS             915        Cellular South         500

  16   Qwest (2)               754        Cincinnati Bell        496
                                          Wireless               

  17   Rural Cellular          730        iPCS (9)               495

  18   Cincinnati Bell         481        Ubiquitel (4)          448
       Wireless                                                  

  19   US Unwired              469        Midwest Wireless (5)   440

  20   Cellular South          400        Ntelos                 336

  21   AirGate PCS             400        SouthernLINC           260

  22   Midwest Wireless        400        Shenendoah Telecomm.   162

  23   Ubiquitel               497        Blugrass Cellular      130

  24   SouthernLINC            260        Alaska Commun.         113

  25   iPCS                    249        Surewest Wireless      54
  ---- ----------------------- ---------- ---------------------- ----------

Sources: For 2004, *see* *Tenth Report*, at 15993. For 2005, publicly
available company documents such as operators' news releases and filings
made with the Securities and Exchange Commission. Midwest Wireless,
Company Facts (visited Apr. 20, 2006)
\<http://www.midwestwireless.com/Home/AboutUs/CompanyFacts.htm\>
(Midwest Wireless); B. Parmley, *Bluegrass Cellular Launches Wireless
Service in Somerset and Announces New Sales Staff*, Somerset
Commonwealth Journal, Apr. 2, 2006, at D1 (Bluegrass Cellular); Cellular
South Comments; SouthernLINC, *Frequently Asked Questions* (visited June
15, 2005) \<http://www.solinc.com/faqs.asp\> (Southern LINC); *MetroPCS
Reaches Two Million Customers on Four Year Anniversary of Service*, News
Release, MetroPCS, Feb. 7, 2006 (MetroPCS).

Notes

(1) As of Nov. 30, 2003, includes Puerto Rico, the US Virgin Islands,
    and the Dominican Republic.

(2) In the second quarter of 2004, existing Qwest subscribers began
    transitioning to Sprint PCS's network as Qwest exited the
    facilities-based provision of wireless service. Sprint expected this
    transfer to be substantively complete by the end of the first
    quarter of 2005. Sprint, SEC Form 10K, filed Apr. 29, 2005, at 4.
    *See also Ninth Report,* at 20627-20628.

(3) On August 12, 2005, Sprint PCS completed its merger with Nextel.
    This total includes Direct Post-Paid Subscribers (36.977 million),
    Direct Pre-Paid Subscribers (Boost subsidiary, with 2.684 million)
    and Wholesale Subscribers (5.154 million).

(4) In 2005, Sprint Nextel acquired three affiliates - US Unwired, Gulf
    Coast, and IWO. Sprint Nextel completed its acquisition of Alamosa
    on Feb. 1, 2006 and its acquisition of Nextel Partners on June
    26, 2006. Sprint Nextel has also agreed to acquire UbiquiTel.

(5) On August 1, 2005, Alltel completed its acquisition of Western
    Wireless. On November 18, 2005, Alltel announced an agreement to
    purchase Midwest Wireless.

(6) As of February 2006.

(7) As of Nov. 30, 2004, includes Puerto Rico, the US Virgin Islands,
    and the Dominican Republic.

(8) On Feb. 15, 2005, Alamosa completed its acquisition of AirGate PCS.

(9) On July 1, 2005, iPCS completed its merger with Horizon PCS, another
    Sprint PCS affiliate. Horizon PCS reported 189,000 subscribers as of
    Dec. 31, 2004.

**Table 5: NRUF-Estimated Mobile Telephone Subscribers**

+-------------------+---------------+-------------------+-------------+
|                   | Subscribers   | Increase from     | Penetration |
|                   |               | previous year     | Rate        |
|                   | (millions)    |                   |             |
|                   |               | (millions)        |             |
+-------------------+---------------+-------------------+-------------+
| 2001              | 128.5         | n/a               | 45 %        |
+-------------------+---------------+-------------------+-------------+
| 2002              | 141.8         | 13.3              | 49 %        |
+-------------------+---------------+-------------------+-------------+
| 2003              | 160.6         | 18.8              | 54 %        |
+-------------------+---------------+-------------------+-------------+
| 2004              | 184.7         | 24.1              | 62 %        |
+-------------------+---------------+-------------------+-------------+
| 2005              | 213.0         | 28.3              | 71 %        |
+-------------------+---------------+-------------------+-------------+

**Table 6: Estimated Mobile Telephone Rollouts**

**by County**

  ------------- ----------- ------------- --------- ------------ ---------
  Total Number  Number of   POPs          \% of     Square Miles \% of
  of Providers  Counties    Contained in  Total US  Contained in Total US
  in a County               Those         POPs      Those        Square
                            Counties (1)            Counties     Miles

  3 or More     2674        279699484     98.0%     2,468,670    68.4%

  4 or More     2097        267640610     93.8%     1,839,104    51.0%

  5 or More     1167        145030235     50.8%     965,569      26.8%

  6 or More     414         50092268      17.6%     292,820      8.1%

  7 or More     66          6706603       2.4%      42,059       1.2%
  ------------- ----------- ------------- --------- ------------ ---------

Source: Federal Communications Commission estimates based on publicly
available information.

Notes:

(1) POPs from the 2000 Census;

(2) United States and Puerto Rico

**Table 7: Mobile Telephone Digital Coverage**

  ------------------ --------------- ---------- -------------- ------------
  Technology         POPs in Covered \% of      Square Miles   \% of Total
                     Counties (1)    Total POPs Contained in   Square Miles
                                     (2)        Those Counties 

  CDMA               283,583,958     99.4%      3,322,475      92.2%

  TDMA / GSM         279,589,296     98.0%      3,004,001      83.3%

  iDEN               267,610,225     93.8%      1,887,718      52.3%

  Total Digital      285,230,516     100.0%     3,606,933      100.0%
  ------------------ --------------- ---------- -------------- ------------

Source: Federal Communications Commission estimates based on publicly
available information.

Notes:

Broadband PCS and digital SMR licensees are analyzed by county; cellular
licensees are analyzed by cellular market areas ("CMAs").

(1) POPs from the 2000 Census

(2) United States and Puerto Rico

**Table 8: Mobile Telephone NextGen Coverage**

  -------------------------------- ------------- -------- ----------- --------
  Technology                       POPs in       \% of    Square      \% of
                                   Covered       Total    Miles       Total
                                   Counties (1)  POPs (2) Contained   Square
                                                          in Those    Miles
                                                          Counties    

  CDMA Path (1xRTT/EVDO)           282,726,629   99.1%    2,818,949   78.2%

  GSM Path (GPRS/EDGE/WCDMA/HSDPA) 269,022,781   94.3%    1,893,335   52.5%

  WCDMA/HSDPA                      57,524,389    20.2%    82,159      2.3%

  EVDO                             178,642,051   62.6%    478,792     13.3%
  -------------------------------- ------------- -------- ----------- --------

Source: Federal Communications Commission estimates based on publicly
available information.

Notes:

(1) POPs from the 2000 Census

(2) United States and Puerto Rico

**Table 9: Change in CPI**

  ------ ------- -------- ---------- -------- ----------- -------- ----------- -------- ----------- --------
         CPI              Cellular            All                  Local                Long        
                          CPI                 Telephone            Telephone            Distance    
                                              CPI                  CPI                  Telephone   
                                                                                        CPI         

         Index   Annual   Index      Annual   Index Value Annual   Index Value Annual   Index Value Annual
         Value   Change   Value      Change               Change               Change               Change

  Dec    100              100                 100                  100                  100          
  1997                                                                                              

  1998   101.6            95.1                100.7                101.6                100.5       

  1999   103.8   2.2%     84.9       -10.7%   100.1       -0.6%    103.4       1.8%     98.2        -2.3%

  2000   107.3   3.4%     76         -10.5%   98.5        -1.6%    107.7       4.1%     91.8        -6.5%

  2001   110.3   2.8%     68.1       -10.4%   99.3        0.8%     113.3       5.2%     88.8        -3.3%

  2002   112.1   1.6%     67.4       -1.0%    99.7        0.4%     118.5       4.5%     84.9        -4.4%

  2003   114.6   2.3%     66.8       -0.9%    98.3        -1.4%    123.3       4.1%     77.8        -8.4%

  2004   117.7   2.7%     66.2       -0.9%    95.8        -2.5%    125.1       1.5%     70.9        -8.9%

  2005   121.7   3.4%     65         -1.8%    94.9        -0.9%    128.5       2.7%     67.5        -4.8%

                                                                                                    

  Dec            21.7%               -35.0%               -5.1%                28.5%                -32.5%
  1997                                                                                              
  to                                                                                                
  2005                                                                                              
  ------ ------- -------- ---------- -------- ----------- -------- ----------- -------- ----------- --------

Source: Bureau of Labor Statistics.

**Table 10: Average Revenue Per Minute**

  ------------ ------------- ------------- ---------------- ---------------
               Average Local Minutes of    Average Revenue  Annual Change
               Monthly Bill  Use Per Month Per Minute       

  1993         \$61.49       140           \$0.44           

  1994         \$56.21       119           \$0.47           8%

  1995         \$51.00       119           \$0.43           -9%

  1996         \$47.70       125           \$0.38           -11%

  1997         \$42.78       117           \$0.37           -4%

  1998         \$39.43       136           \$0.29           -21%

  1999         \$41.24       185           \$0.22           -23%

  2000         \$45.27       255           \$0.18           -20%

  2001         \$47.37       380           \$0.12           -30%

  2002         \$48.40       427           \$0.11           -9%

  2003         \$49.91       507           \$0.10           -13%

  2004         \$50.64       584           \$0.09           -12%

  2005         \$49.98       740           \$0.07           -22%
  ------------ ------------- ------------- ---------------- ---------------

Note: Data covers the last six months of each year.

Source: *See* Appendix A, Table 1, at 87 (ARPU); *Dec 2005 CTIA Survey*,
at 217-218 (minutes of use).

**Table 11: Market Entry Over Time**

+------------+-------+-------+-------+-------+-------+-------+-------+
|            | Pe    |       |       |       |       |       |       |
|            | rcent |       |       |       |       |       |       |
|            | of    |       |       |       |       |       |       |
|            | Total |       |       |       |       |       |       |
|            | US    |       |       |       |       |       |       |
|            | POPs  |       |       |       |       |       |       |
|            | Co    |       |       |       |       |       |       |
|            | vered |       |       |       |       |       |       |
+------------+-------+-------+-------+-------+-------+-------+-------+
| Total      | 11th  | Tenth | Ninth | E     | Se    | Sixth | Fifth |
| Number of  | R     |       | R     | ighth | venth | R     | R     |
| Providers  | eport | R     | eport | R     | R     | eport | eport |
| in a       |       | eport |       | eport | eport |       |       |
| County     |       |       |       |       |       |       |       |
+------------+-------+-------+-------+-------+-------+-------+-------+
| 3 or more  | 98.0% | 96.9% | 96.8% | 94.7% | 94.1% | 90.8% | 87.8% |
+------------+-------+-------+-------+-------+-------+-------+-------+
| 4 or more  | 93.8% | 93.2% | 93.0% | 89.3% | 88.7% | 84.4% | 79.8% |
+------------+-------+-------+-------+-------+-------+-------+-------+
| 5 or more  | 50.8% | 87.3% | 87.5% | 82.6% | 80.4% | 75.1% | 68.5% |
+------------+-------+-------+-------+-------+-------+-------+-------+
| 6 or more  | 17.6% | 41.3% | 75.8% | 71.1% | 53.1% | 46.7% | 34.6% |
+------------+-------+-------+-------+-------+-------+-------+-------+
| 7 or more  | 2.4%  | 12.6% | 29.5% | 25.4% | 21.2% | 11.9% | 4.4%  |
+------------+-------+-------+-------+-------+-------+-------+-------+

Source: FCC estimates

**Table 12: Mobile Market Structure and Performance**

**in Selected Countries**

+-----------+----------+--------------+------+-----------+------------+
| Country   | Number   | Penetration  | MOUs | Revenue   | Data       |
|           | of       | (%)          |      | per       |            |
|           |          |              |      |           | (% of      |
|           | Players  |              |      | Minute    | ARPU)      |
|           |          |              |      | (\$)      |            |
+-----------+----------+--------------+------+-----------+------------+
| **Mobile  |          |              |      |           |            |
| Party     |          |              |      |           |            |
| Pays**    |          |              |      |           |            |
+-----------+----------+--------------+------+-----------+------------+
| USA       | 4+       | 70           | 798  | 0.07      | 10         |
+-----------+----------+--------------+------+-----------+------------+
| Canada    | 3        | 53           | 403  | 0.11      | 9          |
+-----------+----------+--------------+------+-----------+------------+
| Hong Kong | 5        | 106          | 395  | 0.04      | 15         |
+-----------+----------+--------------+------+-----------+------------+
| Singapore | 3        | 98           | 313  | 0.08      | 20         |
+-----------+----------+--------------+------+-----------+------------+
| **Calling |          |              |      |           |            |
| Party     |          |              |      |           |            |
| Pays**    |          |              |      |           |            |
+-----------+----------+--------------+------+-----------+------------+
| UK        | 5        | 113          | 146  | 0.21      | 22         |
+-----------+----------+--------------+------+-----------+------------+
| Germany   | 4        | 97           | 81   | 0.28      | 18         |
+-----------+----------+--------------+------+-----------+------------+
| Italy     | 4        | 123          | 126  | 0.21      | 16         |
+-----------+----------+--------------+------+-----------+------------+
| Sweden    | 4        | 114          | 141  | 0.17      | 7          |
+-----------+----------+--------------+------+-----------+------------+
| France    | 3        | 79           | 235  | 0.17      | 14         |
+-----------+----------+--------------+------+-----------+------------+
| Spain     | 3        | 108          | 150  | 0.22      | 14         |
+-----------+----------+--------------+------+-----------+------------+
| Finland   | 3        | 101          | 279  | 0.11      | 14         |
+-----------+----------+--------------+------+-----------+------------+
| Japan     | 3        | 74           | 147  | 0.27      | 26         |
+-----------+----------+--------------+------+-----------+------------+
| South     | 3        | 79           | 322  | 0.10      | 18         |
| Korea     |          |              |      |           |            |
+-----------+----------+--------------+------+-----------+------------+
| Australia | 4        | 95           | 178  | 0.17      | 15         |
+-----------+----------+--------------+------+-----------+------------+

Sources: *Interactive Global Wireless Matrix 4Q05,* Merrill Lynch,
Telecom Services Research. In markets where calling party pays is used,
figures for minutes of use (MOUs) may be somewhat understated, and the
revenue figures used to calculate ARPU somewhat overstated, relative to
markets where mobile party pays is used. Consequently, figures for
revenue per minute (ARPU divided by MOUs) probably overstate the
difference between revenue per minute in the United States (along with
other mobile party pays markets) and calling party pays markets. *See*
Section VI.D, International Comparisons, *supra*.

**APPENDIX B**

**Maps**

**Table of Contents**

Map 1: Mobile Telephone Operator Coverage Estimated by County 100

Map 2: A-Side Cellular Coverage Estimated by RF Contour Signals 101

Map 3: B-Side Cellular Coverage Estimated by RF Contour Signals 102

Map 4: Mobile Telephone Penetration Estimated by Economic Area 103

Map 5: CDMA Coverage Estimated by County 104

Map 6: TDMA/GSM Coverage Estimated by County 105

Map 7: iDEN Coverage Estimated by County 106

Map 8: Estimated Rollout of Next Generation Networks Estimated by County
107

Table 1: Geographic Licensing Schemes 108

Map 9: Basic Trading Areas 109

Map 10: Major Trading Areas 110

Map 11: Cellular Market Areas 111

Map 12: Economic Areas 112

**Map 1**

![](media/image2.png){width="6.49375in" height="8.403472222222222in"}

**Map 2**

![](media/image3.png){width="6.492361111111111in"
height="8.402777777777779in"}

**Map 3**

![](media/image4.png){width="6.492361111111111in"
height="8.402777777777779in"}

**Map** **4**

![](media/image5.png){width="6.49375in" height="8.403472222222222in"}

**Map 5**

![](media/image6.png){width="6.49375in" height="8.403472222222222in"}

**Map 6**

![](media/image7.png){width="6.49375in" height="8.403472222222222in"}

**Map 7**

![](media/image8.png){width="6.49375in" height="8.403472222222222in"}

**Map 8**

![](media/image9.png){width="6.49375in" height="8.403472222222222in"}

**Table 1: Geographic Licensing Schemes**

  ------------------------------- ----------------- ----------------------
  Geographic Licensing Schemes    Number of Market  Note
                                  Areas             

  **Basic Trading Areas (BTAs)**  **493**           **BTAs make up MTAs**

  **Major Trading Areas (MTAs)**  **51**            

  **Cellular Market Areas         **734**           **Also known as MSAs
  (CMAs)**                                          and RSAs**

  **Economic Areas (EAs)**        **175**           
  ------------------------------- ----------------- ----------------------

**Map 9**

![](media/image10.png){width="6.49375in" height="8.403472222222222in"}

**Map 10**

![](media/image11.png){width="6.49375in" height="8.403472222222222in"}

**Map 11**

![](media/image12.png){width="6.49375in" height="8.403472222222222in"}

**Map 12**

![](media/image13.png){width="6.49375in" height="8.403472222222222in"}

**APPENDIX C**

**List of Commenters**

[Comments]{.underline}

Cellular South, Inc.

CTIA -- The Wireless Association

Leap Wireless International, Inc.

Mobile Satellite Ventures Subsidiary LLC

National Telecommunications Cooperative Association ("NTCA")

RSA 1 Limited Partnership dba Cellular 29 Plus & Iowa RSA 2 Limited
Partnership ("Cellular 29")

Southern Communications Services, Inc. dba SouthernLINC Wireless

Texas RSA 7B3, Inc dba People Wireless ("People Wireless")

[Replies to Comments]{.underline}

Cingular Wireless LLC

National Telecommunications Cooperative Association

Rural Telecommunications Group, Inc. ("RTG")

T-Mobile USA, Inc. ("T-Mobile")

Virgin Mobile, USA, LLC ("Virgin Mobil")

**STATEMENT OF CHAIRMAN KEVIN J. MARTIN**

> *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, FCC
> 06-142*

This year's Competition Report demonstrates that the competitive
marketplace for wireless services is continuing to bring consumers more
choice, better services, and lower prices. The number of minutes of use
went up 27 percent in 2005 and the price paid by consumers for each of
those minutes went down by 27 percent. Ninety-eight percent of the total
U.S. population lives in counties with access to three or more different
operators offering mobile telephone service, which is higher than in any
previous year. Wireless subscribership has grown with usage.
Approximately 28 million additional wireless subscribers signed up in
2005, bringing the total to 213 million subscribers and increasing the
nationwide penetration rate to 71 percent.

In addition, new and innovative wireless broadband services are being
deployed throughout the country on a competitive basis. Nationwide and
regional carriers have deployed EV-DO, a technology that is available to
nearly two-thirds of the U.S. population. In response to these EV-DO
deployments, a nationwide carrier has launched a rival wireless
broadband network using a technology called HSDPA. These developments
are only the beginning -- I expect deployment of innovative wireless
broadband networks will accelerate now that the Commission has completed
its auction of spectrum for advanced wireless services.

Competition among mobile telephone carriers has lowered the price
consumers pay for mobile telephone service, stimulating rapid subscriber
growth and greater usage of mobile phones. Competition has also
encouraged mobile telephone carriers to improve service quality and to
begin deploying significantly faster broadband technologies on their
networks. These results demonstrate how a competitive marketplace --
rather than economic regulation -- provides the greatest benefits to the
American consumer.

**CONCURRING STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

> *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.

As in previous years, I concur in this year's CMRS Competition Report. I
want to begin by repeating my observation that the quality of our
reports is improving and by thanking the Bureau staff for their hard
work in producing the item we release today. I am pleased the Commission
is devoting more resources to fulfilling Congress's mandate that we
review and analyze the competitive conditions for commercial mobile
services.

I only concur because we still have a long way to go to meet the mandate
of Congress to analyze whether there is "effective competition" in the
mobile services market. As in years past, we do not provide an adequate
definition of the term. The need for a clearly-stated,
objectively-measurable definition of "effective competition" gets more
compelling every year. Today's report is the first to incorporate data
reflecting the move from five to four national carriers (brought about
by the Sprint-Nextel merger). Our conclusion that competition remains
effective post-merger would be more credible if we had defined that term
ahead of time and ***then*** assessed whether current competition data
meets our definition. Instead, we come at the problem
backwards---gathering some data throughout the year and, when report
time rolls around, letting the data drive us to an undefined conclusion
that competition is present. Not only does this *ad hoc* process lack
methodological discipline, but it leaves consumers, industry, and
Congress with no clear idea of how this Commission will react to further
changes in the market.

I also believe that any credible definition of "effective competition"
must take account of the effects arising out of the cross-ownership of
wireless and wireline companies. In this era of convergence, we often
hear that new technologies will bring competition to markets currently
dominated by incumbents. But what about when the same company or
companies dominate both the new and the old markets? Will a parent
company really allow a subsidiary to introduce products that cannibalize
existing revenue streams? I expect that this issue will become
increasingly important in the wireless industry---especially with the
next generation of broadband services---and I hope that future CMRS
reports will take account of it.

I am also concerned about our cursory examination of whether wireless
customers have access to product information that allows them to make
suitable buying decisions. This, too, is part of competition. So many
consumers who I meet have complaints about their wireless bills. It is
instructive that a number of states have taken steps, or are considering
doing so, to address this problem legislatively. Moreover, we continue
to receive a significant (albeit declining) number of consumer
complaints each quarter, around half of which concern billing and rate
issues. All this indicates that further investigation is warranted, and
I hope next year's report addresses this particular question in greater
depth.

Finally, we really need to develop new methods to measure coverage in
rural areas. As today's report acknowledges, one important flaw in our
present methodology is the assumption that if one part of a county (such
as an interstate highway) receives coverage, then every part of the
county receives coverage. Though gathering more granular data may be
difficult, I think we need to investigate whether a sampling methodology
may be appropriate. The present method distorts reality.

So that's the path I'd like to see us embark on for the next report.
Nothing that I have said should detract from the good stories that our
mobile industry has to report, including growing subscribership and
dramatically increasing minutes of use. We need to monitor and study all
these developments accurately and in their many ramifications in order
to make sure that consumers can reap maximum benefits from the successes
of this dynamic industry.

**STATEMENT OF**

**COMMISSIONER DEBORAH TAYLOR TATE**

> *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*

Congress requires the Commission to report annually on the state of
competition in Commercial Mobile Radio Services (CMRS), and I believe
that today's report shows a healthy and competitive wireless industry.
Wireless technology has become a vital part of the world economy.
According to CTIA, in the first six months of 2006 alone, more than \$10
billion dollars was invested in the wireless industry. U.S. consumers
have adopted wireless technologies at a breathtaking pace. As today's
report indicates, as of December 2005, there were approximately 213
million mobile telephone subscribers, which translates into a nationwide
penetration rate of approximately 71 percent.

Wireless telephones are becoming even more versatile. For instance,
several companies have recently partnered with cellular carriers to
provide news, sports, and entertainment television clips to your cell
phone. Others have announced special phone services for kids so that
parents can track their child's location. Consumers continue to increase
their use of mobile telephones for voice and data services. The average
amount of time U.S. mobile subscribers spend talking on their mobile
phones rose to 740 minutes per month in the second half of 2005, an
increase of more than 120 minutes from a year earlier.

I also am particularly pleased that this report highlights the growth of
broadband data services provided by wireless providers. With the
recently auctioned advanced wireless spectrum, I know that this trend
will only compound. I am also intrigued by the developments in creating
mesh broadband networks using unlicensed portions of the spectrum. It is
important to see that wireless broadband continues to develop in order
to present an additional viable option to consumers, not only in core
"lead" markets, but across the entire nation.

Finally, I would like to provide some feedback to the wireless industry.
My colleagues and I are keenly aware of how important communications
technologies are when public safety or homeland security concerns become
paramount. I commend the wireless industry for the role it has played
regarding public safety and encourage CMRS carriers' to continue to work
with federal and state entities on these critical matters. Moreover, I
am pleased that wireless informal complaints have decreased from 4,616
in the first quarter of 2006 to 4,050 in the second quarter of 2006, but
encourage that more consumer friendly policies be examined. As an FCC
Commissioner, I encourage the wireless industry to continue to innovate
and create the next great new product. In particular, I hope the
industry continues to play a role in the deployment of broadband to more
consumers. Wireless providers will be critical to getting broadband out
to that last, most difficult mile.

**STATEMENT OF**

**COMMISSIONER ROBERT M. McDOWELL**

> *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*

First, many thanks to the staff of the Wireless Telecommunications
Bureau for this fine effort. This report and analysis is thoughtful and
comprehensive, and I appreciate your careful attention and hard work.

With respect to the substance, I am particularly pleased to see so many
positive developments in the wireless sector. Over the last 13 years,
wireless subscriber growth has grown exponentially and competition among
numerous providers has flourished. Ninety-eight percent of the total
U.S. population continues to live in counties where three or more
different operators compete to offer wireless service, while nearly 94
percent of the U.S. population continues to live in counties with four
or more different operators competing to offer service. Consumers have
benefited from this competition -- new services abound and prices have
declined.

The overall wireless penetration rate in our country is now at 71
percent -- and our report notes one analyst's view that just about
everyone between the ages of 20 and 49 has a wireless phone. Moreover,
innovative broadband services using advanced technologies allow
customers to use new multimedia phones to watch TV, download songs,
receive information and access content, such as sports, news and
weather, at broadband speeds. Mobile phones are providing consumers with
a personal computer-type broadband experience. Additionally, I applaud
the competitive wireless industry for beginning to invest the necessary
capital that permits consumers the flexibility to pull the content of
their choice at the time and place of their choice.

At the same time, prices are decreasing. Our report estimates that
revenue per minute (RPM) declined 22 percent last year alone. RPM
currently stands at \$0.07, as compared with \$0.47 in December 1994 --
a decline of 86 percent. This is great news for consumers.

I am delighted that the trend is positive, and I will continue to watch
with great interest future developments in the wireless industry.

[^1]: *See* Section IV.A.2, Prepaid Service, *infra*.

[^2]: *See* Section VI.D, International Comparisons, *infra*.

[^3]: Commercial Mobile Services came to be known as the Commercial
    Mobile Radio Services, or "CMRS." CMRS includes a large number of
    terrestrial services and some mobile satellite services. *See* 47
    C.F.R. § 20.9(10).

[^4]: The Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-66,
    Title VI, § 6002(b), amending the Communications Act of 1934 and
    codified at 47 U.S.C. § 332(c). As in the past, this report bases
    its analysis on a consumer-oriented view of wireless services by
    focusing on specific product categories, regardless of their
    regulatory classification. In some cases, this includes an analysis
    of offerings outside the umbrella of "services" specifically
    designated by the Commission as CMRS. However, because providers of
    these other services can compete with CMRS providers, the Commission
    believes that it is important to consider them in the analysis. As
    the Commission said, paraphrasing the Department of Justice/Federal
    Trade Commission guidelines on merger review, "When one product is a
    reasonable substitute for the other in the eyes of consumers, it is
    to be included in the relevant product market even though the
    products themselves are not identical." Application of Echostar
    Communications Corporation, General Motors Corporation, and Hughes
    Electronics Corporation (Transferors) and Echostar Communications
    Corporation (Transferee), *Hearing Designation Order*, 17 FCC Rcd
    20559, 20606 (2002).

[^5]: 47 U.S.C. § 332(c)(1)(C).

[^6]: *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, *First Report*, 10 FCC Rcd 8844 (1995) ("*First Report*");
    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, *Second Report*, 12 FCC Rcd 11266 (1997) ("*Second
    Report*"); 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, *Third Report*, 13 FCC Rcd 19746 (1998) ("*Third
    Report*"); 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, *Fourth Report*, 14 FCC Rcd 10145 (1999) ("*Fourth
    Report*"); Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Fifth Report*, 15 FCC Rcd 17660 (2000) ("*Fifth
    Report*"); Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Sixth Report*, 16 FCC Rcd 13350 (2001) ("*Sixth
    Report*"); 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, *Seventh Report*, 17 FCC Rcd 12985 (2002) ("*Seventh
    Report*"); 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, *Eighth Report*, 18 FCC Rcd 14783 (2003) ("*Eighth
    Report*"); 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, *Ninth Report*, 19 FCC Rcd 20597 (2004) ("*Ninth
    Report*"); 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, *Tenth Report*, 20 FCC Rcd 15908 (2005) ("*Tenth
    Report*"). The reports can also be found on the FCC's web site at
    \<http://wireless.fcc.gov/cmrsreports.html\>.

[^7]: This report, like the others before it, discusses CMRS as a whole
    because Congress called on the Commission to report on "competitive
    market conditions with respect to commercial mobile services." 47
    U.S.C. § 332(c)(1)(C). Any individual proceeding in which the
    Commission defines relevant product and geographic markets, such as
    an application for approval of a license transfer, may present facts
    pointing to narrower or broader markets than any used, suggested, or
    implied in this report.

[^8]: 47 U.S.C. § 332 (c)(1)(C).

[^9]: *Ninth Report*, at 20602-20603 and 20607.

[^10]: WTB Seeks Comment on CMRS Market Competition, WT Docket No.
    06-17, *Public Notice,* 21 FCC Rcd 211 (2006) ("*Eleventh CMRS
    PN*"). *See also*, WTB Seeks Comment on CMRS Market Competition, WT
    Docket No. 05-71, *Public Notice,* 20 FCC Rcd 4073 (2005) ("*Tenth
    CMRS PN*"); 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, WT Docket No. 04-111, *Notice of Inquiry*, 19 FCC Rcd 5608
    (2004) ("*Ninth CMRS NOI*"); 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, WT Docket No. 02-379, *Notice of Inquiry*, 17 FCC
    Rcd 24923 (2002) ("*Eighth CMRS NOI*").

[^11]: *See* Appendix C, *infra*, for a list of parties who filed
    comments in response to the *Eleventh CMRS PN*.

[^12]: *See* CTIA-The Wireless Association, *PN* *Comments*, at ii, 6
    (filed Feb. 17, 2006) ("CTIA Comments"); T-Mobile USA, *PN Reply
    Comments*, at 1-4 (filed Mar. 6, 2006) ("T-Mobile Reply Comments");
    Cingular Wireless, *PN Reply Comments*, at 1-4 (filed Mar. 6, 2006).

[^13]: *See* Cellular South, *PN Comments*, at 3 (filed Feb. 17, 2006)
    ("Cellular South Comments").

[^14]: *Id*.; Cellular 29 Plus and Lyrix Wireless, *PN Comments*, at 3-4
    (filed Feb. 17, 2006).

[^15]: *See* *also* Wireless Telecommunications Bureau Announces Agenda
    and Speakers For Public Forum For The 7^th^ Annual Commercial Mobile
    Radio Services Competition Report, *Public Notice*, DA 02-422 (rel.
    Feb. 25, 2002). *See* FCC, *Commercial Mobile Radio Services (CMRS)
    Competition Report Public Forum,*
    \<http://wireless.fcc.gov/cmrs-crforum.html\> for access to
    participants' presentations and forum transcript. The direct link to
    the forum transcript is
    \<http://wireless.fcc.gov/services/cmrs/presentations/020228.pdf\>
    ("*Transcript*").

[^16]: *See* Section VI.A.1, Pricing Trends, *infra.*

[^17]: *See* CTIA, *Wireless Industry Indices: Semi-Annual Data Survey
    Results* (results through December 2005) ("*Dec 2005 CTIA Survey*").
    *See* note Error: Reference source not found, *infra*, for a
    discussion of data reported by CTIA.

[^18]: *See* Section VI.B.1, Subscriber Growth, *infra*, for a further
    discussion of NRUF data*.* Carriers submit the data to NeuStar,
    Inc., who consolidate the data into a database and supply it to the
    Commission upon request.

[^19]: *See Seventh Report*, at 13005, 13049.

[^20]: Rate centers are small geographic areas used by local exchange
    carriers for a variety of reasons, including the determination of
    toll rates. *See* Harry Newton, [Newton's Telecom Dictionary: 16^th^
    Expanded & Updated Edition]{.smallcaps}, CMP Books, July 2000, at
    732. Urban rate centers are generally smaller than rural rate
    centers. The smallest rate centers are a few square miles in size,
    while some rural rate centers are hundreds of square miles in size.
    Rate centers are generally smaller than counties: there are roughly
    18,000 rate centers in the United States, compared to roughly 3,200
    counties.

[^21]: There are 172 EAs, each of which is an aggregation of counties.
    *See* Kenneth P. Johnson, *Redefinition of the EA Economic Areas*,
    [Survey Of Current Business]{.smallcaps}, Feb. 1995, at 75
    (*Redefinition of the EA*). For its spectrum auctions, the FCC has
    defined four additional EAs: Guam and the Northern Mariana Islands
    (173); Puerto Rico and the U.S. Virgin Islands (174); American Samoa
    (175); and Gulf of Mexico (176). *See* FCC, *FCC Auctions: Maps*
    (visited Mar. 25, 2002)
    \<http://wireless.fcc.gov/auctions/data/maps.html\>. In November
    2004, the Bureau of Economic Analysis released updated definitions
    of EAs; however, for this report we use the previous release of
    definitions. *See* *New BEA Economic Areas For 2004*, Bureau of
    Economic Analysis, Nov. 17, 2004.

[^22]: *Seventh Report*, at 13005; *See* Section VI.B.4, Sub-National
    Penetration Rates, *infra*.

[^23]: *Ninth Report*, at 20618-20620.

[^24]: The HHI is calculated by summing the squares of the individual
    market shares of all firms competing in the relevant market. *See*
    Section III.C.2, Concentration Measures for Mobile Telephone
    Services, *infra*.

[^25]: *See* Section III.C.1, Number of Mobile Telephone Competitors,
    *infra.*

[^26]: Basic Trading Areas ("BTAs") are Material Copyright (c) 1992 Rand
    McNally & Company. Rights granted pursuant to a license from Rand
    McNally & Company through an agreement with the Federal
    Communications Commission. BTAs are geographic areas drawn based on
    the counties in which residents of a given BTA make the bulk of
    their shopping goods purchases. Rand McNally's BTA specification
    contains 487 geographic areas covering the 50 states and the
    District of Columbia. For its spectrum auctions, the Commission
    added additional BTA-like areas for: American Samoa; Guam; Northern
    Mariana Islands; San Juan, Puerto Rico; Mayagüez/Aguadilla-Ponce,
    Puerto Rico; and the U.S. Virgin Islands.

[^27]: BTAs can be sub-divided into counties. The United States is made
    up of approximately 3,200 counties versus 493 BTAs.

[^28]: For a complete list of cellular and PCS licenses on a
    county-by-county basis, *see* FCC Wireless Telecommunications
    Bureau, *Broadband PCS Data*,
    \<http://wireless.fcc.gov/services/broadbandpcs/data/\>; FCC
    Wireless Telecommunications Bureau, *Cellular Services Data*,
    \<http://wireless.fcc.gov/services/cellular/data/\>.

[^29]: POPs is an industry term referring to population, usually the
    number of people covered by a given wireless license or footprint.
    One "POP" equals one person.

[^30]: We further note, however, that in the analysis of the
    Cingular-At&T Wireless transaction, the Commission concluded that
    two important factors to consider in determining whether competitive
    market conduct and performance will be observed are the presence and
    capacity of other carriers, rather than simply their current market
    shares. *See* Applications of AT&T Wireless Services, Inc.,
    Transferor, and Cingular Wireless Corp., Transferee, *Memorandum
    Opinion and Order*, 19 FCC Rcd 21522, 21593-21595 (2004).

[^31]: *See Eighth Report*, at 14792.

[^32]: Although we integrate the analysis of mobile voice and data
    services for the reasons indicated here, below we define separate
    product markets for mobile voice services and mobile data services.
    *See* Section III.A, Services and Product Market Definition,
    *infra*. Accordingly, our integration of the analysis of mobile
    voice and data services in the context of this report should not be
    taken as an indication that the Commission will consider mobile
    voice and data services as belonging in the same product market in a
    different context.

[^33]: *See* 47 C.F.R. §§ 22.900, 24.200, 90.601.

[^34]: Wireless telemetry is the use of wireless technology to monitor
    mobile or fixed equipment in a remote location, such as the remote
    monitoring of utility meters by utility and energy companies. *See
    Eighth Report*, at 14864-14865.

[^35]: 47 C.F.R. § 20.9(10). This rule section also contains an
    exception for "mobile satellite licensees and other entities that
    sell or lease space segment capacity, to the extent that it does not
    provide commercial radio service directly to end users." The
    exception permits such entities to provide space segment capacity to
    commercial mobile radio service providers on a non-common carrier
    basis, if authorized by the Commission.

[^36]: The 2 GHz MSS band refers to the 2000-2020 MHz uplink
    (Earth-to-space transmissions) and 2180-2200 MHz downlink
    (space-to-Earth transmissions) frequencies.

[^37]: The Big LEO (low-earth orbit) band MSS allocation consists of an
    uplink at 1610-1626.5 MHz and a downlink at 2483.5-2500 MHz and is
    sometimes referred to as the 1.6/2.4 GHz band.

[^38]: The L-Band has MSS allocations at 1525-1559 MHz (downlink) and
    1626.5-1660.5 MHz (uplink).

[^39]: *See* Flexibility for Delivery of Communications by Mobile
    Satellite Service Providers in the 2 GHz Band, the L-Band, and the
    1.6/2.4 GHz bands; Review of the Spectrum Sharing Plan Among
    Non-Geostationary Satellite Orbit Mobile Satellite Service Systems
    in the 1.6/2.4 GHz Bands, *Report and Order and Notice of Proposed
    Rulemaking*, 18 FCC Rcd 1962, 1964 (2003) ("*Satellite Flexibility
    Order"*), *modified sua sponte*, *Order on Reconsideration*, 18 FCC
    Rcd 13590 (2003), *on reconsideration*, *Memorandum Opinion and
    Order and Second Order on Reconsideration*, 20 FCC Rcd 4616 (2005),
    *further recon pending*.

[^40]: *Satellite Flexibility Order*, at 1984.

[^41]: Mobile Satellite Ventures Subsidiary LLC, *Order and
    Authorization*, 19 FCC Rcd 22144 (Int'l Bur. 2004); Globalstar LLC,
    *Order and Authorization*, 21 FCC Rcd 398 (Int'l Bur. 2006).

[^42]: Sprint Nextel was created by the merger of Sprint Corp.
    ("Sprint") and Nextel Communications, Inc. ("Nextel"). *See Tenth
    Report*, at 15931.

[^43]: Verizon Wireless is a joint venture of Verizon Communications,
    Inc. ("Verizon") and Vodafone Group PLC ("Vodafone"). Verizon owns
    55 percent of Verizon Wireless, and Vodafone owns 45 percent. *See*
    Verizon Communications, Inc., SEC Form 10-K, Mar. 14, 2006, at 11.

[^44]: T-Mobile USA is a wholly-owned subsidiary of Deutsche Telekom AG
    ("Deutsche Telekom").

[^45]: Cingular Wireless is a joint venture of AT&T, Inc. ("AT&T")
    (formerly known as SBC Communications, Inc.) and BellSouth
    Corporation ("BellSouth"). Cingular Wireless, LLC, SEC Form 10-K,
    Feb. 24, 2006, at 3. On March 5, 2006, AT&T and Bellsouth announced
    plans to merge. AT&T and Bellsouth, *AT&T, BellSouth to Merge*, News
    Release, Mar. 5, 2006.

[^46]: Colette M. Fleming *et al.*, *Wireless 411*, UBS Warburg, Equity
    Research, Apr. 25, 2006, at 19 ("*4Q05 Wireless 411*").

[^47]: Due to its sizeable customer base and extensive geographic (but
    limited population) coverage, some analysts refer to Alltel as a
    "super-regional." Ric Prentis and Eric Mallis, *Leap Wireless
    International*, Raymond James, Equity Research, Apr. 3, 2006, at 23
    ("Alltel is a super-regional operator given its large customer base
    and geographical footprint, but it does not have enough licenses in
    Top 50 markets to be considered a national operator"). In addition,
    Alltel has a very low roaming rate with Verizon Wireless which
    allows it to offer customers attractive national rate plans. Phil
    Cusick and Richard Choe, *Wireless 101: A U.S. Wireless Industry
    Primer*, Bear Stearns, Equity Research, June 2005, at 60. One
    analyst reports that "Alltel believes customers view their business
    as 'national' because of their national roaming agreement with
    Verizon." Simon Flannery and Jessica Yau, *Alltel Corporation,
    Conference Takeaways: On Track with Western Deal*, Morgan Stanley,
    Equity Research, May 5, 2005, at 1.

[^48]: Interconnection and Resale Obligations Pertaining to Commercial
    Mobile Radio Services, *First Report and Order*, 11 FCC Rcd 18455,
    18457 (1996). *See*, *also*, Implementation of the Commercial
    Spectrum Enhancement Act and Modernization of the Commission's
    Competitive Bidding Rules and Procedures, *Second Report and Order
    and Second Further Notice of Proposed Rule Making*, 21 FCC Rcd 4753
    (2006) ("*Designated Entity Second Report*");  *Order on
    Reconsideration of the Second Report and Order*, FCC 06-78 (rel.
    June 2, 2006) ("*Designated Entity Order on Reconsideration*") (The
    Commission recently adopted rules to limit the award of designated
    entity benefits to any applicant or licensee that has "impermissible
    material relationships" or an "attributable material relationship"
    created by certain agreements with one or more other entities for
    the lease or resale (including under a wholesale arrangement) of its
    spectrum capacity.).

[^49]: Virgin Mobile, *PN Reply Comments*, at 2 (filed Mar. 6, 2006)
    ("Virgin Mobile Reply Comments").

[^50]: Mark Walsh, *Prepaid Cellphone Plans*, [NYTimes.com]{.smallcaps},
    Aug. 11, 2005.

[^51]: *See* Appendix A, Table 2, *infra*.

[^52]: Virgin Mobile Reply Comments, at 6-7 (citing the Yankee Group).

[^53]: TracFone Wireless, *TracFone Wireless Fact Sheet*,
    \<http://www.tracfone.com/about.jsp?task=about&currentView=factSheet\>
    (visited Apr. 19, 2006).

[^54]: That is, without an equity interest from a facilities-based
    carrier.

[^55]: *See* Section 2, Prepaid Service, *infra*, for some of the
    reasons for this increased interest.

[^56]: Mark Walsh, *Prepaid Cellphone Plans*, [NYTimes.com]{.smallcaps},
    Aug. 11, 2005.

[^57]: Virgin Mobile Reply Comments, at 6.

[^58]: *Id*., at 2. For a detailed discussion of the venture, *see
    Seventh Report*, at 13026. Sprint Nextel also targets the teenage
    market through a subsidiary with its iDEN-based push-to-talk
    product, using an alternative prepaid brand, "Boost Mobile." Nextel,
    SEC Form 10-K (filed Mar. 15, 2005), at 2. *See* *Ninth Report*, at
    20615, for more history on the venture.

[^59]: Virgin Mobile Reply Comments, at 4.

[^60]: Tim Horan, *Datatimes*, CIBC World Markets, Dec. 16, 2005.

[^61]: *Mobile ESPN Expands Retail Distribution to Sprint Stores*, News
    Release, Mobile ESPN, Apr. 5, 2006.

[^62]: Tim Horan, *Datatimes*, CIBC World Markets, Nov. 16, 2005.

[^63]: *The Cisneros Group Launches First Hispanic Wireless Service
    Provider,* News Release, Movida Communications, Apr. 20, 2005.

[^64]: Clearwire, *Service Plans/Coverage Areas* (visited June 5, 2006)
    \<http://www.clearwire.com/store/service_areas.php\>.

[^65]: Clearwire, *Service Plans* (visited June 5, 2006)
    \<http://www.clearwire.com/store/service_plans.php\>.

[^66]: *See Tenth Report*, at 15922.

[^67]: *Clearwire Becomes First International Wireless Broadband Company
    to Offer Simple, Reliable Internet Phone Service*, News Release,
    Clearwire, April 10, 2006*.* The VOIP service was first offered to
    Clearwire's customers in Stockton, CA, and the company will only
    sell the VOIP service to those customers who qualify for Enhanced
    911 service. *Id*.

[^68]: *NASCAR Nextel FanView Gives Fans a New Perspective*, News
    Release, Sprint Nextel and NASCAR, Feb. 9, 2005*.*

[^69]: Kelly Hill, *Sprint Nextel Delves Deeper into 4G with New
    Devices, 'Global Reach,'* RCR Wireless News, May 25, 2006; *Sprint
    and Samsung to Explore Wireless Broadband*, News Release, Sprint
    Nextel, Sept. 16, 2005; *Sprint and Motorola in Wireless Broadband
    Development Pact*, News Release, Sprint Nextel, June 30, 2005;
    *Sprint and Intel to Explore Wireless Broadband Technologies*, News
    Release, Sprint Nextel, May 5, 2005.\[to be updated to reflect 2.5
    GHz efforts\]

[^70]: *Sprint Nextel Announces 4G Wireless Broadband Initiative with
    Intel, Motorola and Samsung*, News Release, Sprint Nextel, Aug. 8,
    2006.

[^71]: Applications of Nextel Communications, Inc. and Sprint
    Corporation for Consent to Transfer Control of Licenses and
    Authorizations, File Nos. 0002031766, *et al.*, WT Docket No. 05-63,
    *Memorandum Opinion and Order*, at ¶¶ 163-165, FCC 05-148 (rel. Aug.
    8, 2005)*.*

[^72]: *BellSouth Expands Availability of Wireless Broadband in Athens*,
    News Release, BellSouth, Nov. 17, 2005; BellSouth, *Experience the
    Power and Freedom of Wireless Broadband* (visited June 5, 2006)
    \<http://www.wirelessbb.bellsouth.net/sales/asp/WBB_OrderNow.asp\>*.*

[^73]: *Id.*

[^74]: USA Mobility, *Business Solutions -- Wireless Messaging
    Solutions* (visited June 22, 2006)
    \<<http://www.usamobility.com/bus_solutions/wireless_messaging/>\>;
    Tenth Report, at 15923.

[^75]: Space Data Corp., *Overview of SkySite Network* (visited June 22,
    2006) \<<http://www.spacedata.net/technology.htm>\>; Motient,
    *Welcome to Motient* (visited June 22, 2006)
    <http://www.motient.com/index.php>; *Tenth Report*, at 15923.

[^76]: In order to place a satellite telephone call, an "outbound"
    communication from an MSS mobile phone is transmitted up to the
    satellite, using "service link" frequencies. The satellite then
    retransmits the signal back down to the earth, using "feeder link"
    frequencies, to a gateway ground station, where the call is
    interconnected with terrestrial networks, such as the PSTN. The
    return or "inbound" communication works the exact opposite way. The
    communication from the terrestrial network is transmitted from the
    gateway earth station up to the satellite, and then retransmitted by
    the satellite back down to the MSS mobile telephone. In systems with
    inter-satellite links, the inbound and outbound communications may
    be transmitted through multiple satellites in order to complete the
    connection between the originating mobile telephone and the
    receiving gateway ground station.

[^77]: This data is not based on information that is subject to a
    protective order.

[^78]: The Commission has buildout rules for geographic area licenses,
    which do not require operators to deploy networks such that the
    entire geographic area of a specific license receives coverage. For
    example, the construction requirements for the 30 megahertz
    broadband PCS licenses state that an operator's network must serve
    an area containing at least one-third of the license area's
    population within five years of the license being granted and
    two-thirds of the population within 10 years. Licensees may, in the
    alternative, provide substantial service to their licensed area
    within the appropriate five- and ten-year benchmarks. *See* 47
    C.F.R. § 24.203(a). Similarly, the construction requirements for the
    10 and 15 megahertz broadband PCS licenses state that an operator
    must cover one-quarter of a license area's population, or provide
    "substantial service," within five years of being licensed. *See* 47
    C.F.R. § 24.203(b). The details concerning exactly which geographic
    areas or portions of the population should be covered to meet these
    requirements are left to the operators. In addition, decisions about
    whether to increase coverage above these requirements are left to
    the operators. For information on the buildout requirements for
    cellular licenses, *see* 47 C.F.R. §§ 22.946, 22.947,
    22.949, 22.951. For information on the buildout requirements for
    non-site based SMR licenses, *see* 47 C.F.R. §§ 90.665 and 90.685. 

[^79]: All population figures are based on the Bureau of the Census's
    2000 county population.

[^80]: *See* Appendix B, Maps 2-3, *infra*. Utilizing information filed
    by cellular licensees with the Commission, we found that less than
    one-tenth of one percent of the US population lacked cellular
    coverage. FCC internal analysis.

[^81]: Cellular licensees were originally awarded a geographical area
    (CMA) as a license area, but they only retained that portion of the
    CMA where they had built out and expanded their wireless networks.
    *See* Amendment of Part 22 of the Commission's Rules to Provide for
    the Filing and Processing of Applications for Unserved Areas in the
    Cellular Service and to Modify other Cellular Rules, *First Report
    and Order and Memorandum Opinion and Order on Reconsideration*, 6
    FCC Rcd 6185, 6196-6200 (1991). Initial cellular system operators
    were given a five-year period during which to expand their systems
    within the CMAs in which they were licensees. *Id*.

[^82]: *See* Appendix A, Table 5, *infra*.

[^83]: *Id.* We note that the land area of these counties, 2.5 million
    square miles, is 50 percent larger than the combined land area of
    the 25 member countries of the expanded European Union (1.5 million
    square miles).

[^84]: *See* Appendix A, Table 9, *infra*.

[^85]: *S**ee* *Tenth Report*, at 15931.

[^86]: The HHI is calculated by summing the squares of the individual
    market shares of all firms competing in the relevant market. When a
    single firm is the sole supplier in the relevant market (a pure
    monopoly), the HHI attains its maximum value of 10,000 (100 x 100).
    As the structure of a market becomes progressively more atomistic,
    the value of HHI approaches 0.

[^87]: For example, if four carriers are identified as participants in
    the relevant product and geographic market and each carrier accounts
    for 25 percent of total sales, the value of HHI would be 2500
    \[(25)^2^ x 4\]. If the number of carriers increases to five, each
    with a 20 percent market share, the value of HHI would decline to
    2000 \[(20)^2^ x 5\]. On the other hand, if there are still only
    four carriers but the top carrier has a 40 percent market share
    while each of the remaining three carriers has 20 percent, the value
    of HHI would increase from 2500 to 2800 \[(40)^2^ + (20)^2^ x 3\].

[^88]: The methodology used to compile NRUF data is described in Section
    4, Sub-National Penetration Rates.

[^89]: *See* Section 4, Sub-National Penetration Rates, *infra*. As
    discussed in note Error: Reference source not found, the use of EAs
    also reduces distortions inherent in the use of NRUF data. In
    addition to the inherent limitations of the NRUF data detailed
    below, the methodology used to calculate the HHIs for EAs has its
    own limitations. The methodology gives equal weight to a mobile
    carrier that reports assigned numbers in one county as it does to a
    carrier that reports assigned numbers in all counties, or at least
    more than one county, within the EA. In effect, the methodology is
    based on the implicit assumption that the EA is the relevant
    geographic market, so that each carrier with assigned numbers in the
    EA is competing head to head with all other carriers operating in
    the EA. However, to the extent that carriers have different coverage
    areas that do not overlap, not all carriers with assigned numbers in
    an EA are in fact direct competitors. The implication is that the
    HHIs for EAs will tend to understate systematically the actual level
    of market concentration because the underlying geographic market
    definition is overly broad. On the other hand, there may be factors
    that would cause the relevant geographic market to be broader.

[^90]: In other contexts, such as the Commission's review of license
    transfers and assignments, the relevant geographic market for
    calculating HHIs may be greater or less than an EA.

[^91]: *See* Appendix A, Table 3, *infra*. The simple mean (not weighted
    by population) is 2901.

[^92]: *See Tenth Report*, at 15926.

[^93]: The average cost of serving a given market tends to decline with
    higher population density and urbanization because high
    concentrations of subscribers make it easier for operators to
    provide adequate coverage with less infrastructure deployment. *See*
    Eugence C. Signorini, *Wireless Coverage in the United States:
    Leaving a Lot to Be Desired*, [The Yankee Group Report]{.smallcaps},
    Vol. 1, No. 11, Aug. 2000, at 8.

[^94]: *Tenth Report*, at 15927.

[^95]: Glen Campbell *et al*., *Interactive Global Wireless Matrix
    4Q05*, Merrill Lynch, Telecom Services Research, Apr. 2006
    ("*Interactive Global Wireless Matrix 4Q05*").

[^96]: In August 2005, Dutch regulators cleared telecommunications
    company Royal KPN's takeover of its smaller mobile telephone
    competitor Telfort, allowing the number of national mobile operators
    in Netherlands to decline from five to four. *Royal KPN Gets
    Go-Signal in \$1.3b Telfort Takeover*, [Telecom Asia
    Daily]{.smallcaps}, Aug. 31, 2005.

[^97]: *Interactive Global Wireless Matrix 4Q05*.

[^98]: *Id*.

[^99]: The subscriber shares used to calculate HHIs for European mobile
    markets were taken from *Interactive Global Wireless Matrix 4Q05*.

[^100]: *Id*.

[^101]: *See* Section III.C.2, *supra*, and Section III.E.2, *infra*,
    for a fuller discussion of how economies of scale may affect market
    structure.

[^102]: *See* Jonathan B. Baker, *Developments in Antitrust Economics*,
    [Journal of Economic Perspectives]{.smallcaps}, Vol. 13, No. 1,
    Winter 1999, at 182.

[^103]: 2000 Biennial Regulatory Review, Spectrum Aggregation Limits for
    Commercial Mobile Radio Services, *Report and Order*, 16 FCC Rcd
    22668, at 22693 (2001) ("*Spectrum Cap Order*").

[^104]: FCC Adopts Measures to Increase Rural Investment and Facilitate
    Deployment of Spectrum-Based Services in Rural Areas, *News
    Release*, Federal Communications Commission, Jul. 8, 2004 ("Rural
    Order PN"). Until then, the Commission had retained the cellular
    cross-interest rule in RSAs, while at the same time creating a
    waiver process in recognition that there may be RSAs in which such
    cross interests would not create a significant likelihood of
    substantial competitive harm.

[^105]: Generally, "footprint" is an industry term of art referring to
    the total geographic area in which a wireless provider offers
    service or is licensed to offer service.

[^106]: The Commission must consent to the transfer of control or
    assignment of all non pro-forma spectrum licenses used to provide
    wireless telecommunications services. 47 C.F.R. § 1.948.

[^107]: *See Fifth Report*, at 17699. For a complete discussion of the
    motivations for this phenomenon, *see Fourth Report*, at
    10159-10160.

[^108]: *See Seventh Report*, at 12997. One study found bigger companies
    get better equipment prices because of their size. Shawn Young, *As
    Wireless Firms Grow, So Can Costs*, [Wall Street
    Journal]{.smallcaps}, Apr. 29, 2004, at B4. However, the study also
    found that the cost of signing up new customers increases as
    wireless companies get bigger.

[^109]: *Sprint Nextel Completes Merger*, News Release, Sprint Nextel,
    Aug. 12, 2005; *Sprint Nextel Says It Intends to Pursue Appraisal
    Process with Nextel Partners*, News Release, Sprint Nextel, Aug. 17,
    2005; FCC Consents to Sprint Corporation Acquisition of Nextel
    Communications Licenses and Authorizations, *News Release*, Federal
    Communications Commission, Aug. 3, 2005.

[^110]: Ric Prentiss, *et al.*, *UbiquiTel Inc.*, Raymond James, Equity
    Research, Apr. 21, 2006, at 1.

[^111]: Ric Prentis and Eric Mallis, *Leap Wireless International*,
    Raymond James, Equity Research, Apr. 3, 2005, at 23. As of November
    2004, there were 12 Sprint affiliates, including Alamosa Holdings
    Inc., US Unwired Inc., AirGate PCS Inc., UbiquiTel Inc., Horizon PCS
    Inc., Shenandoah Telecommunications Co., Enterpise Wireless, Gulf
    Coast Wireless, iPCS Inc, Independent Wireless One (IWO), Northern
    PCS, and Swiftel. Phil Cusick and Richard Choe, *Airgate PCS Inc.*,
    Bear Stearns, Equity Research, Nov. 24, 2004, at 19. In February
    2005, Alamosa completed its acquisition of AirGate, while iPCS
    completed its acquisition of Horizon PCS in July. *Alamosa Closes
    Acquisition of AirGate PCS*, News Release, Alamosa, Feb. 15, 2005;
    *iPCS Announces Closing of Merger with Horizon PCS*, News Release,
    iPCS, July 1, 2005. Sprint Nextel completed its acquisition of
    Nextel Partners in June 2006 and of UbiquiTel in July 2006. *Sprint
    Nextel Completes Acquisition of Nextel Partners*, News Release, June
    26, 2006; *Sprint Nextel Completes Acquisition of Wireless Affiliate
    UbiquiTel Inc.*, News Release, July 1, 2006.

[^112]: Timothy Horan *et al.*, *Sprint Acquires PCS Affiliate UbiquiTel
    for \$1.3B*, Daily Datatimes, CIBC, Apr. 21, 2006, at 3 ("We expect
    \[Sprint Nextel\] to acquire the remaining smaller affiliates").
    *See*, *also*, Ric Prentis and Eric Mallis, *Leap Wireless
    International*, Raymond James, Equity Research, Apr. 3, 2005, at 23
    ("We would expect Sprint-Nextel will acquire more of its affiliates
    in the coming quarters"); Phil Cusick, et al., *U.S. Wireless
    Services*, Bear Stearns, Equity Research, April 2006, at 11 ("We
    believe UbiquiTel, iPCS, Shentel, and other remaining private Sprint
    affiliates may announce deals in the next few months \[to be
    bought\]"). The remaining affiliates include two public companies
    (ShenTel and iPCS) and two private companies (Swiftel and Northern
    PCS). Sprint Nextel stated it is currently in talks with ShenTel and
    Swiftel and in litigation with iPCS and Northern PCS. Ric Prentiss
    *et al.*, *UbiquiTel Inc.*, Raymond James, Equity Research, Apr. 21,
    2006, at 1. Sprint Nextel's acquisitions of its affiliates may be
    driven by a desire to settle legal disputes with its affiliates over
    whether Sprint's integration with Nextel conflicts with Sprint's
    obligations to its affiliates. *See Tenth Report*, at 15933.

[^113]: *Alltel Agrees to Purchase Midwest Wireless for \$1 Billion in
    Cash*, News Release, Alltel, Nov. 18, 2005. *See*, *also*,
    Application Transferring Control of Licenses Held by Midwest
    Wireless Communications L.L.C., Midwest Wireless Iowa L.L.C.,
    Midwest Wireless Wisconsin L.L.C., and Switch 2000 L.L.C. to Alltel
    Communications, Inc., Lead File No. 0002391997 (filed December 2,
    2005).

[^114]: *Id*.

[^115]: *Id*.

[^116]: *Id*.

[^117]: The use of the term "affiliations" and the discussion of the
    various relationships between these entities in this section are
    made in the context of general business matters and are not
    indicative of how these relationships may or may not be
    characterized in the context of the Commission\'s designated entity
    rules.  *See* 47 C.F.R. 1.2110; *see also* *Designated Entity Second
    Report*; *Designated Entity Order on Reconsideration*.

[^118]: *See* Section 3, Roaming, *infra*.

[^119]: *See Tenth Report*, at 15932, note 127.

[^120]: *See* *Tenth Report*, at 15929-15933; Section 1, Sales and
    Swaps, *supra*.

[^121]: Ric Prentis and Eric Mallis, *Leap Wireless International*,
    Raymond James, Equity Research, Apr. 3, 2006, at 23.

[^122]: *See* *DOJ/FTC Guidelines* at §3.0; s*ee also* Dennis W. Carlton
    and Jeffrey M. Perloff, *Modern Industrial Organization* (3^rd^
    ed.), Addison, Wellsley, Longman, Inc., 1999, at 77.

[^123]: *See Spectrum Cap Order*, 16 FCC Rcd at 22688-91, ¶¶ 39-43.

[^124]: *See*, *e.g.*, Thomas W. Hazlett, *The Wireless Craze, The
    Unlimited Bandwidth Myth, The Spectrum Auction Faux Pas, and the
    Punchline to Ronald Coase's "Big Joke"*, Working Paper 01-01,
    AEI-Brookings Joint Center for Regulatory Studies, Jan. 2001;
    *Spectrum Framework Review: Implementation Plan*, Consultation
    Document, Office of Communications, Jan. 13, 2005, at 77 and 81-82.

[^125]: *Ninth Report*, at 20631.

[^126]: *See* Appendix B, Table 1 and Maps 11-14, *infra*, for
    descriptions and maps of various geographical licensing schemes
    employed by the Commission.

[^127]: Under the original cellular licensing rules, one of the two
    cellular channel blocks in each market (the B block) was awarded to
    a local wireline carrier, while the other block (the A block) was
    awarded competitively to a carrier other than a local wireline
    incumbent. After awarding the first 30 MSA licenses pursuant to
    comparative hearing rules, the Commission adopted rules in 1984 and
    1986 to award the remaining cellular MSA and RSA licenses through
    lotteries. By 1991, lotteries had been held for every MSA and RSA,
    and licenses were awarded to the lottery winners in most instances.
    In some RSA markets, however, the initial lottery winner was
    disqualified from receiving the license because of a successful
    petition to deny or other Commission action. Implementation of
    Competitive Bidding Rules to License Certain Rural Service Areas,
    *Report and Order*, 17 FCC Rcd 1960, 1961-1962 (2002). In 1997, the
    Commission auctioned cellular spectrum in areas unbuilt by the
    original cellular licensees. *See* FCC, *Auction 12: Cellular
    Unserved* (visited Apr. 12, 2002)
    \<<http://wireless.fcc.gov/auctions/12/>\>. In 2002, the Commission
    auctioned three RSA licenses where the initial lottery winner had
    been disqualified. *See* FCC, *Auction 45: Cellular RSA* (visited
    Jun. 7, 2002)
    \<[http://wireless.fcc.gov/auctions/45/](http://wireless.fcc.gov/auctions/12/)\>.

[^128]: *See* Section VI.B.1, Subscriber Growth, *infra*.

[^129]: The first auction was for two license blocks of 30 megahertz
    each. FCC Grants 99 Licenses For Broadband Personal Communications
    Services In Major Trading Areas*, News Release*, FCC, Jun. 23, 1995.
    The Commission has had five additional broadband PCS auctions. *See*
    FCC, *Auctions Home* (visited Apr. 29, 2003)
    \<http://wireless.fcc.gov/auctions/\>. Three licenses were also
    awarded as part of a pioneer preference program in 1994. Three
    Pioneer Preference PCS Applications Granted, *News Release*, FCC,
    Dec. 14, 1994.

[^130]: The Commission's broadband PCS allocation includes 20 megahertz
    of spectrum at 1910 MHz - 1930 MHz for unlicensed broadband PCS.

[^131]: Major Trading Areas are Material Copyright (c) 1992 Rand McNally
    & Company. Rights granted pursuant to a license from Rand McNally &
    Company through an arrangement with the Federal Communications
    Commission. Rand McNally's MTA specification contains 47 geographic
    areas covering the 50 states and the District of Columbia. For its
    spectrum auctions, the Commission has added three MTA‑like areas:
    Guam and the Northern Mariana Islands, Puerto Rico and the U.S.
    Virgin Islands, and American Samoa. In addition, Alaska was
    separated from the Seattle MTA into its own MTA‑like area. MTAs are
    combinations of two or more BTAs. *See* note Error: Reference source
    not found for a description of BTAs.

[^132]: The Commission has also reconfigured returned C block licenses.
    *See* *Tenth Report*, at 15935, note 150.

[^133]: The "900 MHz" SMR band refers to spectrum allocated in the
    896-901 and 935-940 MHz bands; the "800 MHz" band refers to spectrum
    allocated in the 806-824 and 851-869 MHz bands. *See* 47 C.F.R.
    § 90.603; *see also* 47 C.F.R. § 90.7 (defining "specialized mobile
    radio system").

[^134]: The Commission has held multiple auctions for SMR licenses. FCC,
    *FCC Auctions* (visited Mar. 7, 2002)
    \<http://wireless.fcc.gov/auctions/\>.

[^135]: There are five megahertz in the 900 MHz band (200 paired
    channels x 12.5 kHz/channel). *See* 47 C.F.R. § 90.617, Table 4B.
    There are 21.5 megahertz in the 800 MHz band: 14 megahertz in the
    800 SMR Service (280 paired channels x 25 kHz/channel) and 7.5
    megahertz in the 800 MHz General Category (150 paired channels x 25
    kHz/channel). *See* 47 C.F.R. § 90.615, Table 1 (SMR General
    Category) and 47 C.F.R. § 90.617, Table 4A (SMR Service). In 2000,
    the Commission amended its rules to allow Business and
    Industrial/Land Transportation licensees in the 800 MHz band to use
    their spectrum for CMRS operations under certain conditions.
    Implementation of Sections 309(j) and 337 of the Communications Act
    of 1934 as Amended Promotion of Spectrum Efficient Technologies on
    Certain Part 90 Frequencies; Establishment of Public Service Radio
    Pool in the Private Mobile Frequencies Below 800 MHz; Petition for
    Rule Making of The American Mobile Telecommunications Association,
    *Report and Order and Further Notice of Proposed Rule Making*, 15
    FCC Rcd 22709, 22760-61 (2000). This could make up to five megahertz
    of additional spectrum available for digital SMR providers: 2.5
    megahertz in the Industrial/Land Transportation Category (50 paired
    channels x 25 kHz/channel) and 2.5 megahertz in the Business
    Category (50 paired channels x 25 kHz/channel). *See* 47 C.F.R.
    § 90.617, Tables 2A and 3A. As discussed below in Section III.E.1.b,
    *infra*, the configuration of the 800 MHz band is changing as a
    result of a new band plan adopted by the Commission.

[^136]: Principles for Reallocation of Spectrum to Encourage the
    Development of Telecommunications Technologies for the New
    Millennium, *Policy Statement*, 14 FCC Rcd 19868 (1999); *see also*
    Applications of Various Subsidiaries and Affiliates of Geotek
    Communications, Inc., Debtor-In-Possession, Assignors, and
    Wilmington Trust Company or Hughes Electric Corporation, Assignees,
    For Consent to Assignment of 900 MHz Specialized Mobile Radio
    Licenses, *Memorandum Opinion and Order*, 15 FCC Rcd 790, 802
    (2000).

[^137]: Dispatch services allow two-way, real-time, voice communications
    between fixed units and mobile units (*e.g.*, between a taxicab
    dispatch office and a taxi) or between two or more mobile units
    (*e.g.*, between a car and a truck). *See Fifth Report*, at
    17727-17728, for a detailed discussion. A number of providers
    continue to provide both commercial and private dispatch services at
    800 MHz, 900 MHz, 220 MHz, 217-219 MHz, and 450-470 MHz. *See*
    Applications of Motorola, Inc.; Motorola SMR, Inc.; and Motorola
    Communications and Electronics, Inc. Assignors; and FCI 900, Inc.,
    Assignee, For Consent to Assignment of 900 MHz Specialized Mobile
    Radio Licenses, *Order*, 16 FCC Rcd 8451 (2001) ("*Motorola
    Order*"). Dispatch and SMR are often used interchangeably, although
    SMR refers to specific spectrum ranges.

[^138]: *See* The Strategis Group, *The State of the SMR Industry:
    Nextel and Dispatch Communications*, Sept. 2000, at 57; The
    Strategis Group, *U.S. Dispatch Markets*, Jan. 2000, at 1. *See
    also* *Motorola Order*, at 8457.

[^139]: According to Nextel, "\[We are\] referred to as an 'SMR
    provider' . . ., although \[our\] services compete directly with and
    are regulated virtually identically to those of cellular and PCS
    providers." Nextel, Automatic and Manual Roaming Obligations
    Pertaining to Commercial Mobile Radio Services, WT Docket No.
    00-193, *Comments*, at note 4 (filed Jan. 5, 2001). However, in
    comparison with cellular and broadband PCS providers, digital SMR
    providers are more focused on the business than the individual
    consumer market. *See,* *e.g.,* Nextel Communications, Inc., SEC
    Form 10-Q, Nov. 14, 2000, at 16.

[^140]: *See* Section IV.B.1.e, Data-Only Networks and Technology
    Deployment, *infra.*

[^141]: Some areas may have fewer than eight active licenses because
    certain auction winners or licensees have defaulted on payments to
    the Commission, because some licensees did not meet their buildout
    requirements, some licensees returned their licenses, or some
    licenses remained unsold in an auction.

[^142]: 47 C.F.R. § 24.714 (PCS); 47 C.F.R. § 22.948 (cellular); 47
    C.F.R. §§ 90.813 and 90.911 (auctioned SMR). As a result of
    partitioning and disaggregation, there often are more than eight
    cellular and broadband PCS licenses in a market.

[^143]: No more than 10 megahertz of SMR spectrum was attributable to an
    entity under the cap. 47 C.F.R. § 20.6(b).

[^144]: 47 C.F.R. § 20.6(a).

[^145]: *Spectrum Cap Order*, at 22669. The increase to 55 megahertz
    took effect February 13, 2002. *See* 67 Fed. Reg. 1626 (Jan. 14,
    2002). All non pro forma license transfers are still subject to
    review by the Commission to determine whether they are in the public
    interest. *Spectrum Cap Order*, at 22670-22671.

[^146]: FCC Adopts Solution to Interference Problem Faced by 800 MHz
    Public Safety Radio Systems, *News Release*, Federal Communications
    Commission, Jul. 8, 2004.

[^147]: FCC, *Paging (Lower) Bandplan*,
    \<http://wireless.fcc.gov/auctions/data/bandplans/pagingLwrband.pdf\>;
    FCC, *929 and 931 MHz Paging Bandplan*,
    \<http://wireless.fcc.gov/auctions/data/bandplans/auc26bnd.pdf\>.

[^148]: *Id.*

[^149]: Revision of Part 22 and Part 90 of the Commission's Rules to
    Facilitate Future Development of Paging Systems, Implementation of
    Section 309(j) of the Communications Act -- Competitive Bidding,
    *Notice of Proposed Rulemaking*, 11 FCC Rcd 3108, 3109-3110 (1996).

[^150]: *See* 929 and 931 MHz Paging Auction Closes, *Public Notice*, DA
    00-508 (rel. Mar. 6, 2000); *Seventh Report*, at 13050-13051.

[^151]: Lower and Upper Paging Bands Auction Closes, *Public Notice*, DA
    03-1836 (rel. May 30, 2003).

[^152]: Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding Narrowband PCS, PP Docket No. 93-253, *Third
    Memorandum Opinion and Order and Further Notice of Proposed
    Rulemaking*, 10 FCC Rcd 175 (1994).

[^153]: Announcing the High Bidders in the Auction of Ten Nationwide
    Narrowband PCS Licenses; Winning Bids Total \$617,006,674, *Public
    Notice*, PNWL 94-4 (Aug. 2, 1994).

[^154]: *Id.*; Announcing the High Bidders in the Auction of 30 Regional
    Narrowband PCS Licenses; Winning Bids Total \$490,901,787, *Public
    Notice,* PNWL 94-27 (rel. Nov. 9, 1994).

[^155]: Regional Narrowband PCS Spectrum Auction Closes, *Public
    Notice*, DA 03-3006 (rel. Oct. 1, 2003); Narrowband PCS Spectrum
    Auction Closes, *Public Notice*, DA 03-3012 (rel. Oct. 2, 2003).
    *See, also, Ninth Report*, at 20636-20637.

[^156]: *See Eighth Report*, at 14798-14799.

[^157]: Reallocation and Service Rules for the 698-746 MHz Spectrum Band
    (Television Channels 52-59), GN Docket No. 01-74, *Notice of
    Proposed Rulemaking*, 16 FCC Rcd 7278, 7282 (2001).

[^158]: The Commission has allocated 24 megahertz of the Upper 700 MHz
    band for use by public safety entities, pursuant to Section 337(a)
    of the Communications Act. 47 U.S.C. § 337(a).

[^159]: *See* Reallocation and Service Rules for the 698-746 MHz
    Spectrum Band (Television Channels 52-59), GN Docket No. 01-74,
    *Report and Order*, 17 FCC Rcd 1022 (2002) ("*Lower 700 MHz Report
    and Order*"); Service Rules for the 746-764 and 776-794 MHz Bands,
    and Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, *Third Report and Order*, 16 FCC Rcd 2703 (2001); Service
    Rules for the 746-764 and 776-794 MHz Bands, and Revisions to Part
    27 of the Commission's Rules, WT Docket No. 99-168, *Second
    Memorandum Opinion and Order*, 16 FCC Rcd 1239 (2001); Service Rules
    for the 746-764 and 776-794 MHz Bands, and Revisions to Part 27 of
    the Commission's Rules, WT Docket No. 99-168, *Memorandum Opinion
    and Order and Further Notice of Proposed Rulemaking*, 15 FCC Rcd
    20845 (2000); Service Rules for the 746-764 and 776-794 MHz Bands,
    and Revisions to Part 27 of the Commission's Rules, WT Docket No.
    99-168, *Second Report and Order*, 15 FCC Rcd 5299 (2000) ("*Upper
    700 MHz Second Report and Order*")*.*

[^160]: *Id.*

[^161]: *Lower 700 MHz Report and Order*, at 1032.

[^162]: *Id.*, at 1028.

[^163]: *See* Deficit Reduction Act of 2005, Pub. L. No. 109-171, 120
    Stat. 4 (2006) ("DRA") (amending Section 309(j)(14) and Section
    337(e) of the Communications Act, as amended). Title III of the DRA
    is the DTV Act.

[^164]: Balanced Budget Act of 1997, Pub. L. No. 105-33, 111 Stat. 251 §
    3003 (1997) (adding new Section 309(j)(14) to the Communications Act
    of 1934, as amended); § 3007 (uncodified; reproduced at 47 U.S.C.
    § 309(j) note 3); Consolidated Appropriations Act, 2000, Pub. L. No.
    106-113, 113 Stat. 2502, App. E, § 213, 145 Cong. Rec. H12493-94
    (Nov. 17, 1999) ("Consolidated Appropriations Act"); 47 U.S.C. §
    309(j)(14)(C)(ii).

[^165]: Auction Reform Act of 2002, Pub. L. No. 107-195, 116 Stat. 715
    ("*Auction Reform Act*").

[^166]: *See* 47 U.S.C. § 309(j)(15), as added by the *Auction Reform
    Act*.

[^167]: 47 U.S.C. § 309(j)(15)(C)(iii), as enacted by the *Auction
    Reform Act*.

[^168]: Lower 700 MHz Band Auction Closes, *Public Notice*, DA 02-2323
    (rel. Sept. 20, 2002). *See* *also* *Ninth Report*, at 20638.

[^169]: Lower 700 MHz Band Auction Closes, *Public Notice*, DA 03-1978
    (rel. June 18, 2003); Auction of Lower 700 MHz Band Licenses Closes,
    *Public Notice*, DA 05-2239 (rel. Aug. 5, 2005).

[^170]: In light of these statutory changes, the Commission recently
    issued a Notice of Proposed Rule Making that revisits some of the
    Commission's early decisions regarding the 700 MHz band licenses by
    seeking public comment on a variety of licensing and service rules
    affecting recovered analog broadcast spectrum in these bands. *See*
    Notice of Proposed Rule Making, Fourth Further Notice of Proposed
    Rule Making, and Second Further Notice of Proposed Rule Making, FCC
    06-114 (rel. Aug. 10, 2006).

[^171]: DTV Act of 2005 § 3002.

[^172]: *Id.* § 3003. "Recovered analog spectrum" is defined in the DTV
    Act of 2005. *Id.*

[^173]: DTV Act of 2005 §§ 3003(a), 3004 (establishing a Digital
    Television and Public Safety Fund).

[^174]: DTV Act of 2005 § 3003.

[^175]: 47 C.F.R §§ 20.901(a) and 24.3.

[^176]: Advanced Wireless Services (AWS) is the collective term we use
    for new and innovative fixed and mobile terrestrial wireless
    applications using bandwidth that is sufficient for the provision of
    a variety of applications, including those using voice and data
    (such as internet browsing, message services, and full-motion video)
    content.

[^177]: *Tenth Report*, at 15941. The Commercial Spectrum Enhancement
    Act, signed into law on December 23, 2004, establishes a Spectrum
    Relocation Fund to reimburse federal agencies operating on certain
    frequencies that have been reallocated to non-federal use, including
    the 1710-1755 MHz band, for the cost of relocating their operations.
    *See* Commercial Spectrum Enhancement Act, Pub. L. No. 108-494, 118
    Stat. 3986, Title II (2004).

[^178]: Service Rules for Advanced Wireless Services in the 1.7 GHz and
    2.1 GHz Bands, WT Docket No. 02-353, *Report and Order*, 18 FCC Rcd
    25162 (2003) (*AWS-1 Service Rules Report and Order*); *Order on
    Reconsideration*, FCC 05-149 (rel. Aug. 15, 2005) (*AWS-1 Service
    Rules Order on Reconsideration*).

[^179]: 47 C.F.R. Part 27.

[^180]: *Designated Entity Second Report*; *Designated Entity Order on
    Reconsideration*.

[^181]: *See AWS-1 Service Rules Order on Reconsideration* at ¶¶ 10-21.

[^182]: *See* Implementation of the Commercial Spectrum Enhancement Act
    and Modernization of the Commission's Competitive Bidding Rules and
    Procedures, *Second Report and Order and Second Further Notice of
    Proposed Rule Making*, 21 FCC Rcd 4753 (2006), *Order on
    Reconsideration*, FCC 06-78 (rel. June 2, 2006).

[^183]: *See* Amendment of Part 2 of the Commission's Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, including Third
    Generation Wireless Systems, ET Docket No. 00-258, Services Rules
    for Advanced Wireless Services in the 1.7 GHz and 2.1 GHz Bands, WT
    Docket No. 02-353, *Ninth Report and Order and Order*, FCC 06-45
    (rel. Apr. 21, 2006).

[^184]: *See* Public Notice, "Auction of Advanced Wireless Services
    Licenses Scheduled For June 29, 2006," AU Docket No. 06-30, FCC
    06-47 (rel. Apr. 12, 2006); Public Notice, "Auction of Advanced
    Wireless Services Licenses Rescheduled for August 9, 2006," AU
    Docket No. 06-30, FCC 06-71 (rel. May 19, 2006).

[^185]: Amendment of Part 2 of the Commission's Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, Including Third
    Generation Wireless Systems, ET Docket No. 00-258, *Sixth Report and
    Order, Third* *Memorandum Opinion and Order and Fifth Memorandum
    Opinion and Order*, 19 FCC Rcd 20720 (2004); Service Rules for
    Advanced Wireless Services in the 1915-1920 MHz, 1995-2000 MHz,
    2020-2025 MHz and 2175-2180 MHz Bands; Service Rules for Advanced
    Wireless Services in the 1.7 GHz and 2.1 GHz Bands, WT Docket No.
    04-356; WT Docket No. 02-353, *Notice of Proposed Rulemaking*, 19
    FCC Rcd 19263 (2004) (*AWS-2 Service Rules NPRM*).

[^186]: *See* Amendment Of Part 2 Of The Commissions Rules To Allocate
    Spectrum Below 3 Ghz For Mobile And Fixed Services To Support The
    Introduction Of New Advanced Wireless Services, Including Third
    Generation Wireless Systems, ET Docket No. 00-258, *Eighth Report
    and Order, Fifth Notice of Proposed Rule Making and Order*, FCC
    05-172 (2005).

[^187]: Amendment of Parts 1, 21, 73, 74, and 101 of the Commission's
    Rules to Facilitate the Provision of Fixed and Mobile Broadband
    Access, Educational, and Other Advanced Services in the 2150-2162
    and 2500-2690 MHz Bands, WT Docket No. 03-66, *Report and Order and
    Further Notice of Proposed Rulemaking*, 19 FCC Rcd 14165 (2004). The
    rules for this band were initially established in 1963 but have
    evolved significantly since that time. In October 2002, three
    organizations representing MDS and ITFS providers -- the Wireless
    Communications Association International, the National ITFS
    Association, and the Catholic Television Network (collectively, the
    Coalition) -- submitted a proposal to the FCC requesting that it
    substantially change the rules governing this band. In April 2003,
    the FCC released a Notice of Proposed Rulemaking seeking comment on
    the Coalition proposal and on other ways to foster efficient and
    effective use of this spectrum.

[^188]: Amendment of Parts 1, 21, 73, 74, and 101 of the Commission's
    Rules to Facilitate the Provision of Fixed and Mobile Broadband
    Access, Educational, and Other Advanced Services in the 2150-2162
    and 2500-2690 MHz Bands, WT Docket No. 03-66, *et al.*, *Order on
    Reconsideration and Fifth Memorandum Opinion and Order and Third
    Memorandum Opinion and Order and Second Report and Order*, FCC 06-46
    (rel. Apr. 27, 2006).

[^189]: *See* William J. Baumol and Robert D. Willig, *Fixed Cost, Sunk
    Cost, Entry Barriers and Sustainability of Monopoly*, [Quarterly
    Journal of Economics]{.smallcaps}, Vol. 96, Aug. 1981, at 406-431;
    Joe S. Bain, *Barriers to New Competition*, 1956, at 55; William S.
    Comanor and Thomas A. Wilson, *Advertising Market Structure and
    Performance*, [The Review of Economics and Statistics]{.smallcaps},
    Vol. 49, Nov. 1967, at 425.

[^190]: Section IV.B.4, Advertising and Marketing, *infra*.

[^191]: *Sixth Report*, at 13350.

[^192]: For example, In 2003, the Commission released a *Notice of
    Proposed Rulemaking* in 2003 to examine ways to promote the rapid
    and efficient deployment of spectrum-based services in rural areas.
    Facilitating the Provision of Spectrum-Based Service to Rural Areas
    and Promoting Opportunities for Rural Telephone Companies to Provide
    Spectrum-Based Services, *Notice of Proposed Rulemaking*, 18 FCC Rcd
    20802 (2003) ("*Rural NPRM*"). More recently, the *11^th^ CMRS NOI*
    included questions on a range of rural wireless issues.

[^193]: The federal government has multiple ways of defining rural,
    reflecting the multiple purposes for which the definitions are used.
    *Eighth Report,* at 14834; *Rural NPRM*, at 20808-11.

[^194]: Biennial Regulatory Review, Spectrum Aggregation Limits for
    Wireless Telecommunications Carriers, *Report and Order*, 15 FCC Rcd
    9219, 9256 at note 203 (1999).

[^195]: Facilitating the Provision of Spectrum-Based Services to Rural
    Areas and Promoting Opportunities for Rural Telephone Companies To
    Provide Spectrum-Based Services, *Report and Order*, 19 FCC Rcd.
    19078, at 19087-19088 (2004) ("We recognize, however, that the
    application of a single, comprehensive definition for 'rural area'
    may not be appropriate for all purposes. . .Rather than establish
    the 100 persons per square mile or less designation as a uniform
    definition to be applied in all cases, we instead believe that it is
    more appropriate to treat this definition as a presumption that will
    apply for current or future Commission wireless radio service rules,
    policies and analyses for which the term 'rural area' has not been
    expressly defined. By doing so, we maintain continuity with respect
    to existing definitions of 'rural' that have been tailored to apply
    to specific policies, while also providing a practical guideline.").

[^196]: We note that this definition was supported by many of the
    commenters responding to the *Ninth Report NOI*. *See Ninth Report*,
    note 266, at 20642. In the *Eighth Report*, the Commission analyzed
    service availability in rural areas using three different proxy
    definitions, and similar results were obtained for each definition.
    *Eighth Report*, at 14835-37.

[^197]: In its 2005 Wireless Survey, NTCA found that its "survey
    respondents are facing considerable competition from other
    carriers---the average respondent indicated that their company
    competes with between two and five other carriers." CTIA Comments,
    at 22-23 (citing NTCA's 2005 Wireless Survey). However, NTCA
    cautions that these numbers may be misleading, as many competitors
    may serve only a small portion of a rural area. NTCA, *PN Comments*,
    at 4 (filed Feb. 17, 2006).

[^198]: *Ninth Report*, at 20643; *Tenth Report*, at 15945.

[^199]: CTIA Comments, at 23 and 25.

[^200]: Cellular South Comments, at 3.

[^201]: T-Mobile Reply Comments, at 6.

[^202]: *See* Raina Smyth *et al.*, *Telecom Services: Initiation of
    Coverage: High Payout Rural Telecoms Offer Near-term Opportunities,
    Long-term Risks*, Morgan Stanley, Equity Research, Apr. 17, 2006, at
    3 ("wireless competition is gradually increasing in the non-metro
    markets where the RLECs operate"); and Jason Armstrong *et al*.,
    *Global Telecom Weekly*, Goldman Sachs, Equity Research, Mar. 3,
    2006, at 2 ("Line loss trends accelerated across most RLECs owing to
    wireless substitution").

[^203]: John Byrne, *Sprint Simplifies Plan Structure,* [Kagan Wireless
    Market Stats]{.smallcaps}, July 22, 2005, at 3-4 ("Regional and
    local carriers with national plans report surprisingly low
    per-minute pricing"). Another analyst wrote, "\[W\]ith the national
    carriers expanding their networks into rural areas, rural wireless
    carriers were forced to modify/lower their pricing, which in turn
    has been pressuring their ARPUs." Tim Horan, *Implications of AT's
    Results On U.S. Wireless Industry*, Daily Datatimes, CIBC World
    Markets, Jan. 23, 2006.

[^204]: An example is when AT&T introduced its digital-one-rate plan in
    May 1998, which was the first plan to include a large quantity of
    monthly minutes at a fixed rate and no long distance charges when
    used on the operator's network. *See Fourth Report*, at 10155, and
    *Fifth Report*, at 17677-78.

[^205]: *See AT&T Launches First National One-Rate Wireless Service
    Plan*, News Release, AT&T Corp., May 7, 1998.

[^206]: *See Tenth Report*, at 15946. One analyst estimated that 54
    percent of adult postpaid users, and 81% of all teens (13 to 17
    years of age), were on a family plan in 2005. *Yankee Group Reveals
    Family and Prepaid Plans Continue to Drive Growth in the United
    States*, News Release, Yankee Group, June 12, 2006.

[^207]: *See Tenth Report*, at 15946.

[^208]: Timothy Horan, *et al.*, *Alltel Launches New Mobile-to-Anyone
    Service*, Daily Datatimes, CIBC, Apr. 24, 2006, at 2; Timothy Horan,
    *et al.*, *SunCom Launches New Mobile-to-Anyone Service*, Daily
    Datatimes, CIBC, Mar. 2, 2006, at 3.

[^209]: Ken Belson, *Alltel to Offer Free-Calling Plan, With Limits*,
    [NYTimes.com]{.smallcaps}, Apr. 21, 2006, at 1.

[^210]: Timothy Horan, *et al.*, *SunCom Launches New Mobile-to-Anyone
    Service*, Daily Datatimes, CIBC, Mar. 2, 2006, at 3.

[^211]: Ken Belson, *Alltel to Offer Free-Calling Plan, With Limits*,
    [NYTimes.com]{.smallcaps}, Apr. 21, 2006, at 1.

[^212]: *Id*.

[^213]: *Id*.

[^214]: [Communications Daily]{.smallcaps}, Mar. 9, 2006, at 12.

[^215]: Timothy Horan *et al.*, *Alltel Launches New Mobile-to-Anyone
    Service*, Daily Datatimes, CIBC, Apr. 24, 2006, at 2.

[^216]: *See Tenth Report*, at 15946. The Commission has initiated two
    separate proceedings on this matter. *See* "Wireless
    Telecommunications Bureau Seeks Comment on Petition for Declaratory
    Ruling Filed by CTIA Regarding Whether Early Termination Fees are
    'Rates Charged' Within 47 U.S.C. Section 332(c)(3)(A)," *Public
    Notice*, 20 FCC Rcd 9100 (2005); "Wireless Telecommunications Bureau
    Seeks Comment on Petition for Declaratory Ruling Filed by SunCom,
    and Opposition and Cross-Petition for Declaratory Ruling Filed by
    Debra Edwards, Seeking Determination of Whether State Law Claims
    Regarding Early Termination Fees are Subject to Preemption Under 47
    U.S.C. Section 332(c)(3)(A)," *Public Notice*, 20 FCC Rcd 9103
    (2005).

[^217]: *From Yankee Group Summit, Verizon Wireless CEO: Verizon
    Wireless to Pro-Rate Early Termination Fees; Will Add Customer
    Loyalty Benefits*, News Release, Verizon Wireless, June 28, 2006.

[^218]: *Id.*

[^219]: *Citing Negative Impact on Industry, Verizon Wireless to
    Pro-Rate ETFs*, [TRDaily]{.smallcaps}, June 29, 2006.

[^220]: Simon Flannery *et al*., *Prepaid Takes Share in Quarterly
    Wireless Survey*, Morgan Stanley, Equity Research, Jan. 17, 2006,
    at 1. But prepaid subscribers have lower levels of bad debt, are
    cheaper to acquire, and pay more on a per-minute basis than postpaid
    subscribers. Simon Flannery *et al*., *Prepaid Wireless: Revisiting
    a Diamond in the Rough*, Morgan Stanley, Equity Research, Apr. 6,
    2005, at 5 ("*Diamond in the Rough*"). "Prepaid offerings will
    almost certainly have a detrimental effect on key wireless metrics
    such as ARPU, churn and MOUs. Ultimately, however, if prepaid
    service can add to profitability and free cash flow and generate a
    respectable return on investment, it is worth pursuing." *Id*., at
    6.

[^221]: Li Yuan, *Pay First, Call Later*, [Wall Street
    Journal]{.smallcaps}, Apr. 25, 2005, at R10 ("*Pay First*"); Yuki
    Noguchi, *The Push Behind Prepaid*, [Washington Post]{.smallcaps},
    June 2, 2005, at D01 ("*The Push Behind Prepaid")*.

[^222]: Only about 58 percent of the US population has prime credit.
    *Diamond in the Rough*, at 4. *See*, *also*, Roger Cheng, *Pre-Paid
    Customers Gain Traction With Wireless Carriers*, MarketWatch, Feb
    22, 2006, at 1, citing Todd Rethemeier, an analyst for Soleil
    Securities Group ("We\'re running out of good customers in this
    industry. Do you know anyone who doesn\'t have a cellphone?").

[^223]: Roger Cheng, *Pre-Paid Customers Gain Traction With Wireless
    Carriers*, MarketWatch, Feb 22, 2006, at 1 ('"There\'s greater
    growth in prepaid,' said Sprint Chief Financial Officer Paul Saleh.
    'That\'s what\'s happening in the market. It\'s really on a
    fast-growth pace.' As a result, the big carriers have increasingly
    accepted higher credit risks and aggressively pursued the market.").

[^224]: *See* Section 2, Resale/MVNO Providers, *supra*. According to
    one analyst, "each of the major carriers has recently launched or
    re-launched its prepaid service, which is another move to increase
    penetration of lower income brackets at the expense of ARPU and
    margins." Simon Flannery and Vance Edelson, *Wireless Carriers
    Susceptible to Slowing Industry Growth*, Morgan Stanley, Equity
    Research, May 25, 2005, at 2. *See*, *also*, Kelly K. Spors, *Paying
    Before You Talk on a Cellphone*, [Wall Street Journal]{.smallcaps},
    July 24, 2005.

[^225]: David Janazzo *et al*., *US Wireless Matrix 4Q05*, Merrill
    Lynch, Equity Research, Mar. 24, 2006, at 16 ("*US Wireless Matrix
    4Q05*").

[^226]: Simon Flannery *et al*., *Prepaid Takes Share in Quarterly
    Wireless Survey*, Morgan Stanley, Equity Research, Jan. 17, 2006, at
    1.

[^227]: Sprint Nextel does not offer prepaid plans under its own name,
    but markets prepaid offerings through its subsidiary brand, Boost
    Mobile. This percentage excludes subscribers to its Virgin Mobile
    joint venture, who are counted as wholesale subscribers. *See*
    Section 2, Resale/MVNO Providers, *supra*, for a discussion of
    Virgin Mobile and Boost Mobile.

[^228]: *4Q05 Wireless 411*, at 8.

[^229]: *Ninth Report*, at 20645.

[^230]: *Id.*, at 20646.

[^231]: *Id.* *See* *also* Sandeep Junnarkar, *A Dizzying Array of
    Options for Using the Web on Cellphones*, [New York
    Times]{.smallcaps}, June 23, 2005 ("*Options for Using the Web on
    Cellphones*").

[^232]: Cingular Wireless, *Media and Services* (visited March 30, 2006)
    \<www.cingular.com\>; Nextel, *Services* (visited March 30, 2006)
    \<www.sprint.com\>. *See, also*, *Cell Services That Go Beyond the
    Call*, [Consumer Reports]{.smallcaps}, Jan. 2006, at 22 (noting that
    Sprint offers unlimited access, email, and instant messages for a
    fixed monthly fee)("*Cell Services That Go Beyond the Call*").

[^233]: *See* Section IV.B.6, Mobile Data Services and Applications,
    *infra*.

[^234]: *See, e.g.*, *Options for Using the Web on Cellphones*.

[^235]: *See, e.g.,* Cingular Wireless, *Media and Services* (visited
    March 30, 2006) \<www.cingular.com\>. *See also*, *Options for Using
    the Web on Cellphones* (noting that Cingular Wireless, in contrast
    to other carriers, offers metered wireless data plans that track
    usage based on the number of megabytes downloaded).

[^236]: *Cell Services That Go Beyond the Call* (noting that Verizon
    deducts from a subscriber's airtime for using its data plans).

[^237]: *See, e.g.,* Cingular Wireless, *Media and Services* (visited
    March 30, 2006) \<www.cingular.com\> ("*Cingular Media and
    Services"*); Sprint, *Sprint PCS Vision* *Guide,* at 77 (visited
    March 30, 2006) \<www.sprint.com\>.

[^238]: *Telephia Reports Mobile Data Usage Adoption Hits 50 Percent
    Mark, With Text Messaging Consumption Leading the Way*, News
    Release, Telephia, Apr. 5, 2006 ("*Telephia Reports Mobile Data
    Usage Adoption*"). Telephia's estimates are based on consumer
    billing records.

[^239]: *Id*.

[^240]: *Cingular Media and Services*; Nextel, *Services* (visited March
    30, 2006) \<www.sprint.com\>. *See also*, *Options for Using the Web
    on Cellphones*.

[^241]: *Cingular Media and Services*; T-Mobile, *Services &
    Accessories* (visited March 30, 2006) \<www.t-mobile.com\>
    ("*T-Mobile Services & Accessories"*) ; Nextel, *Services* (visited
    March 30, 2006) \<www.sprint.com\> ("*Nextel Services"*).

[^242]: *T-Mobile Services & Accessories*; *Nextel Services*. *See,
    also*, *Cell Services That Go Beyond the Call* (noting that Sprint
    and T-Mobile both offer unlimited text messaging for a fixed monthly
    fee, and that Verizon Wireless offers unlimited messaging to anyone
    within the Verizon Wireless network for a fixed monthly fee).

[^243]: *Cingular Media and Services*; *T-Mobile Services &
    Accessories*; *Nextel Services*. In general, these carriers were
    charging \$0.25 per message to send a photo message or other type of
    multimedia message on a pay-as-you-go basis, versus \$0.10 per
    message for a text message.

[^244]: *Telephia Reports Mobile Data Usage Adoption*.

[^245]: *T-Mobile Services & Accessories*.

[^246]: *See, e.g.,* *Cingular Media and Services*.

[^247]: *Id.*; Sprint, *Sprint PCS Vision* *Guide,* at 77 (visited March
    30, 2006) \<www.sprint.com\>.

[^248]: *See, e.g.,* Verizon Wireless, *Get It Now* (visited March 30,
    2006) \<www.verizonwireless.com\>.

[^249]: *See* Section IV.B.6, Mobile Data Services and Applications,
    *infra*, for a discussion of over-the-air music downloading services
    for cellphones. For information on video services for cellphones,
    *see* *Tenth Report*, at 15960; *see, also*, *Implementation of
    Section 19 of the 1992 Cable Act (Annual Assessment of the Status of
    Competition in the Market for the Delivery of Video Programming)*,
    *2006 Report*, ¶¶ 133-134 (2006).

[^250]: *See, e.g.*, *Sprint TV Live Launches on Sprint Multimedia
    Handsets*, Press Release, Sprint, Sept. 26, 2005 (announcing the
    availability of a new TV package for cellphones for a monthly
    subscription fee); *Watch This! Cingular Video™ Now Available*,
    Press Release, Cingular, Mar. 7, 2006 (indicating that, in addition
    to video content that is bundled with an unlimited use data package,
    premium content is available on a monthly subscription basis, while
    certain other content is available on a pay-per-view basis for a
    24-hour period). *See also*, *Tenth Report*, at 15961.

[^251]: *Sprint Launches the First Instant, Over the Air Music Download
    Service in the U.S.*, Press Release, Sprint, Oct. 31, 2005; *V CAST
    Music From Verizon Wireless: Call Your Music*, Press Release,
    Verizon Wireless, Jan. 17, 2006.

[^252]: Cingular Wireless, *Data Connect* (visited April 14, 2006)
    \<www.cingular.com\>; Sprint, *Wireless Laptop Access Plans*
    (visited April 14, 2006) \<www.sprint.com\>; T-Mobile, *Internet &
    E-mail Plans* (visited April 14, 2006) \<www.t-mobile.com\>; Verizon
    Wireless, *NationalAccess* (visited April 14, 2006)
    \<www.verizonwireless.com\>.

[^253]: Verizon Wireless, *BroadbandAccess* (visited April 14, 2006)
    \<www.verizonwireless.com\>; *Sprint Begins Launch of EV-DO Wireless
    High-Speed Data Service*, Press Release, Sprint, July 7, 2005;
    *Cingular Launches 3G Network*, Press Release, Cingular, Dec. 6,
    2005; Walter S. Mossberg, *Cingular Joins Rivals With Fast, Reliable
    Wireless Broadband*, [Wall Street Journal]{.smallcaps}, Jan. 19,
    2006, p. A9. *See, also*, Amol Sharma and Dionne Searcey, *Cell
    Carriers to Web Customers: Use Us, But Not Too Much*, [Wall Street
    Journal]{.smallcaps}, May 11, 2006, p. B1.

[^254]: *Ninth Report*, at 20648.

[^255]: Neil Gandal, David Salant, and Leonard Waverman, *Standards in
    Wireless Telephone Networks*, [Telecommunications
    Policy]{.smallcaps}, Vol. 27, 2003 ("*Standards in Wireless
    Telephone Networks*"). The authors note that, although the European
    Community backed away from mandating a single standard for
    third-generation services, the absence of a mandate has had little
    practical effect as all European mobile operators have opted for the
    same standard and migration path. *Id*., at 330.

[^256]: *Id*., at 329-330.

[^257]: *Id*.

[^258]: Carl Shapiro and Hal R. Varian, *Information Rules*, Harvard
    Business School Press, 1999, at 261-296; Simon Flannery *et al*.,
    *3G Economics a Cause for Concern*, Morgan Stanley, Equity Research,
    Feb. 1, 2005, at 11 ("*3G Economics a Cause for Concern*").

[^259]: *3G Economics a Cause for Concern*, at 10-11.

[^260]: PCS, digital SMR, and cellular networks are all "cellular"
    systems since all divide service regions into many small areas
    called "cells." Cells can be as small as an individual building or
    as large as 20 miles across. Each cell serves as a base station for
    mobile users to obtain connection to the fixed network and is
    equipped with its own radio transmitters/receivers and associated
    antennas. Service regions are divided into cells so that individual
    radio frequencies may be reused in different cells ("frequency
    reuse"), in order to enhance frequency efficiency. When a person
    makes a call on a wireless phone, the connection is made to the
    nearest base station, which connects with the local wireline phone
    network or another wireless operator. When a person is using a
    wireless phone and approaches the boundary of one cell, the wireless
    network senses that the signal is becoming weak and automatically
    hands off the call to the base station in the next cell. *See Sixth
    Report*, at 13361, note 55.

[^261]: *See* SectionVI.B.1, Subscriber Growth, *infra*.

[^262]: *See* note Error: Reference source not found, *infra*, for a
    discussion of the cellular analog requirement and its sunset.

[^263]: *See, e.g.,* Cingular Wireless, SEC Form 10-K, filed Feb. 24,
    2006, at 8-9 (noting that TDMA is used by Cingular in some markets
    pending subscriber migration to GSM-based technologies, and also
    that, as of the end of 2005, more than 86 percent of its subscriber
    base was GSM-equipped and 95 percent of its minutes were being
    carried by its GSM network).

[^264]: For purposes of this report, all of the network technologies
    beyond 2G that carriers have deployed, as well as those that they
    plan to deploy in the future, are generally referred to as
    "next-generation network technologies." The International
    Telecommunication Union ("ITU") has defined 3G network technologies
    as those that can offer maximum data transfer speeds of 2 megabits
    per second ("Mbps") from a fixed location, 384 kbps at pedestrian
    speeds, and 144 kbps at traveling speeds of 100 kilometers per hour.
    *See Fifth Report*, at 17695. There is ambiguity among other
    industry players, however, as to which network technologies
    constitute 3G and which constitute interim technologies, often
    labeled "2.5G." *See Seventh Report*, at 12990 and 13038. Therefore,
    this report uses a more general label to describe all of the
    technologies beyond 2G.

[^265]: *See* Section IV.B.1.c, Technology Choices and Upgrades of
    Mobile Telephone Carriers, *infra.*

[^266]: *See Seventh Report*, at 12990. This upgrade is also labeled
    GSM/GPRS because many TDMA/GSM carriers are upgrading their TDMA
    markets with GSM and GPRS simultaneously.

[^267]: *Tenth Report*, at 15951.

[^268]: *Id.*.

[^269]: *See, e.g.*, Novatel Wireless, *Products: Merlin U730 Wireless
    PC Modem Card* (visited May 12, 2006) \<www.novatelwireless.com\>.

[^270]: *See Seventh Report*, at 12990; *Ninth Report*, at 20650.

[^271]: *Id*.

[^272]: *Standards in Wireless Telephone Networks*, at 328.

[^273]: In addition, all operators using cellular spectrum must deploy
    AMPS, an analog technology, throughout the part of their networks
    using cellular spectrum. *See* 47 C.F.R. §§ 22.901, 22.933. In 2002,
    the Commission decided to eliminate the requirement after a
    five-year transition period. Year 2000 Biennial Regulatory Review --
    Amendment of Part 22 of The Commission's Rules to Modify or
    Eliminate Outdated Rules Affecting The Cellular Radiotelephone
    Service and Other Commercial Mobile Radio Services, *Report and
    Order*, 17 FCC Rcd 18401, 18414 (2002).

[^274]: Verizon Wireless, SEC Form 10-K, filed Mar. 14, 2006, at 9.

[^275]: *Id*.

[^276]: *See* *Tenth Report*, at 15961.

[^277]: *See Ninth Report*, at 20652.

[^278]: Verizon Wireless, SEC Form 10-K, filed Mar. 14, 2006, at 9.

[^279]: *Id*.

[^280]: *Ninth Report*, at 20652.

[^281]: *Tenth Report*, at 15952.

[^282]: Sprint Nextel, SEC Form 10-K, filed March 31, 2006, at 8.

[^283]: *Sprint Begins Launch of EV-DO Wireless High-Speed Data
    Service*, Press Release, Sprint, July 7, 2005.

[^284]: *See Ninth Report*, at 20653.

[^285]: Sprint Nextel, SEC Form 10-K, filed March 31, 2006, at 7.

[^286]: *Id*.

[^287]: *Id*., at 5.

[^288]: *Tenth Report*, at 15952.

[^289]: Alltel, SEC Form 10-K, filed March 10, 2006, at 10.

[^290]: *Id*.

[^291]: *Id*.

[^292]: *Id*.

[^293]: *Tenth Report*, at 15953.

[^294]: Cingular Wireless, SEC Form 10-K, filed Feb. 24, 2006, at 9.

[^295]: *Id*.

[^296]: *Tenth Report*, at 15953. *See, also*, Cingular Wireless, SEC
    Form 10-K, filed Feb. 24, 2006, at 14 (stating Cingular's belief
    that it is well positioned to offer competitive 3G services and that
    its WCDMA/HSDPA technology is superior to EV-DO in terms of peak
    speed and applicability to voice as well as data).

[^297]: *See* Section IV.B.6, Mobile Data Services and Applications,
    *infra*.

[^298]: Cingular Wireless, SEC Form 10-K, filed Feb. 24, 2006, at 6. As
    noted in the *Tenth Report*, prior to its merger with AT&T Wireless
    Cingular had deployed GSM/GPRS technology across its entire network
    footprint and had upgraded its data network to EDGE with respect to
    two-thirds of its covered network POPs. See *Tenth Report*, at
    15953, note 274. As of the end of 2005, more than 86% of Cingular's
    subscriber base was equipped with GSM/GPRS devices. Cingular
    Wireless, SEC Form 10-K, filed Feb. 24, 2006, at 9.

[^299]: *Id*., at 6.

[^300]: *Id*., at 9-10.

[^301]: Mark Shuper *et al*., *The North American 3G Wireless Report*,
    Morgan Stanley, Equity Research, Feb. 28, 2006, at 4 ("*North
    American 3G*"); Cingular Wireless, SEC Form 10-K, filed Feb. 24,
    2006, at 14.

[^302]: *North American 3G*, at 4.

[^303]: Broadband PCS-based and digital SMR-based coverage are estimated
    using counties, and cellular-based coverage is estimated using CMAs.
    The caveats mentioned in Section B, Sources of Information, and in
    Section II.C.1, Number of Mobile Telephone Competitors, *supra*,
    apply to this analysis as well.

[^304]: *See* Appendix B, Maps 5-8, *infra*.

[^305]: *See* Appendix B, Map 9, *infra*.

[^306]: *See* Appendix A, Table 7, *infra*.

[^307]: *Id*.

[^308]: *See* Appendix B, Map 9, *infra*.

[^309]: *See* Section III.B.3, Data-Only Providers, *supra*; Clearwire
    Corporation, SEC Form S-1, filed May 11, 2006, at 53.

[^310]: *See* *Tenth Report*, at 15954; Clearwire Corporation, SEC Form
    S-1, filed May 11, 2006, at 53.

[^311]: *See Tenth Report*, at 15954; Clearwire, *Service Plans*
    (visited June 5, 2006)
    \<http://www.clearwire.com/store/service_plans.php\>.

[^312]: *See* *Tenth Report*, at 15954; Clearwire Corporation, SEC Form
    S-1, filed May 11, 2006, at 82.

[^313]: Kelly Hill, *Sprint Nextel Delves Deeper into 4G with New
    Devices, 'Global Reach,'* RCR Wireless News, May 25, 2006; *Sprint
    and Samsung to Explore Wireless Broadband*, News Release, Sprint
    Nextel, Sept. 16, 2005; *Sprint and Motorola in Wireless Broadband
    Development Pact*, News Release, Sprint Nextel, June 30, 2005;
    *Sprint and Intel to Explore Wireless Broadband Technologies*, News
    Release, Sprint Nextel, May 5, 2005*.*

[^314]: *NASCAR Nextel FanView Gives Fans a New Perspective*, News
    Release, Sprint Nextel and NASCAR, Feb. 9, 2005*.*

[^315]: *See* Section III.B.3, Data-Only Providers, *supra*.

[^316]: *BellSouth to Launch Wireless Broadband in August*, News
    Release, BellSouth and Navini Networks, June 7, 2005*.*

[^317]: BellSouth, *Wireless Broadband Service - Products* (visited June
    5, 2006)
    \<http://www.wirelessbb.bellsouth.net/sales/asp/wbb_Products.asp\>*.*

[^318]: *See Tenth Report*, at 15955.

[^319]: *Id*; USA Mobility, *Wireless Messaging Network Advantages --
    Messaging Reliability* (visited June 22, 2006)
    \<http://www.usamobility.com/bus_solutions/wireless_messaging/network_advantages/default.htm\>*.*

[^320]: Mobitex Technology, *Velocita Wireless* (visited June 22, 2006)
    \<http://www.mobitex.com/operators/reference_operators/4-2-18_cingular.asp\>.
    In October 2004, Cingular Wireless spun off its Cingular Interactive
    unit, which included the Mobitex network, and the unit was acquired
    by an affiliate of Cerberus Capital Management, L.P., which changed
    its name to Velocita Wireless. In February 2006, Sprint Nextel
    completed its acquisition of Velocita Wireless. *Acquisition of
    Cingular Interactive Completed, Company Changes Name to Velocita
    Wireless*, News Release, Velocita Wireless, Oct. 26, 2004; *Sprint
    Nextel Completes Acquisition of Velocita Wireless*, News Release,
    Velocita Wireless, Feb. 28, 2006.

[^321]: *Motient Communications to Initiate Changes to DataTAC Network
    Coverage*, News Release, Motient, Feb. 10, 2006; *Tenth Report*, at
    15955.

[^322]: *Id.,* at 15955-15956; Space Data Corp., Coverage Area (visited
    June 6, 2006) \<http://www.spacedata.net/coverage.htm\>.

[^323]: CNNMoney, *Money 101 Glossary* (visited Mar. 20, 2003)
    \<http://money.cnn.com/services/glossary/c.html.\>. There are
    differing opinions on what constitutes capital spending versus
    non-capital spending.

[^324]: *Eighth Report*, at 14818.

[^325]: Phil Cusick, Richard Choe, and Colin V. Morawski, *U.S. Wireless
    Services: Preview of First-Quarter 2006 Results*, Bear Stearns,
    Equity Research, Apr. 2006, at 70; *Tenth Report*, at 15956. It does
    not appear that this increase is due to Hurricane Katrina. For
    example, one measure of the hurricane's impact on expenditures,
    capex as a percentage of service revenues, is not appreciably
    different for carriers in the last half of 2005 than it was in
    previous periods. Phil Cusick, Richard Choe, and Colin V. Morawski,
    *U.S. Wireless Services: Preview of First-Quarter 2006 Results*,
    Bear Stearns, Equity Research, Apr. 2006, at 70. However, the
    hurricane did impose some additional costs on many carriers. Colette
    M. Fleming *et al.*, *Wireless 411*, UBS Warburg, Equity Research,
    Jan. 3, 2006, at 12 ("*3Q05 Wireless 411*"), at 53
    ("Hurricane-related charges adversely impacted cash costs in the
    third quarter of 2005 for many carriers. Cingular reported \$96
    million of charges due to significant damage in Louisiana,
    Mississippi, Alabama, and Texas markets. Verizon Wireless incurred
    hurricane-related costs of \$44 million and Sprint Nextel recorded
    hurricane-related charges of \$65 million for its wireless
    business.").

[^326]: *Ninth Report*, at 20656. *See*, *also*, *4Q05 Wireless 411*, at
    14 ("We believe the trend of fewer cell site additions will continue
    given that the majority of capital expenditures will relate to
    capacity increases and 3G deployment (which will generally involve
    adding capacity and equipment upgrade to existing cell sites), as
    well as quality enhancements such as better in-building coverage.")

[^327]: The fees that a carrier collects from non-subscribers using its
    network are called "outcollect" fees, and the fees that a carrier
    pays for its subscribers to roam on other networks are called
    "incollect" fees. Margo McCall, *Roaming Feeds Regional Carriers*,
    [Wireless Week]{.smallcaps}, Mar. 26, 2001, at 23.

[^328]: *See* *4Q05 Wireless 411*, at 47 (Table 22: Roaming Revenues as
    a Percentage of Total Service Revenues).

[^329]: *Tenth Report*, at 15956.

[^330]: *4Q05 Wireless 411*, at 41. *See*, *also*, *4Q05 Wireless 411*,
    at 46, for year-over-year growth in roaming revenues.

[^331]: *See* Appendix A, Table 1, *infra*.

[^332]: *Id*.

[^333]: *4Q05 Wireless 411*, at 13.

[^334]: Amol Sharma, *Sprint and Alltel Announce 10-Year Roaming-Service
    Deal*, [Wall Street Journal]{.smallcaps}, May 9, 2006, at B4.

[^335]: *Id*.

[^336]: Philip Cusick, *AT/S Roaming Deal Could be Big Positive for
    Alltel, Small Positive for Sprint*, Bear Stearns, Equity Research,
    May 9, 2006.

[^337]: An experience good is a product or service that the customer
    must consume before determining its quality. *See* Dennis W. Carlton
    and Jeffrey M. Perloff, *Modern Industrial Organization* (3^rd^
    ed.), Addison, Wellsley, Longman, Inc., 1999, at 484.

[^338]: Alice Z. Cuneo, AT&T Deal Signals Spending Falloff, [Advertising
    Age]{.smallcaps}, Mar. 13, 2006, at 8 (citing Advertising Age and
    TNS Media Intelligence).

[^339]: *Id.*

[^340]: Ken Belson, *Best Cellphone Company? All of Them, to Hear Them
    Say It*, [New York Times]{.smallcaps}, May 3, 2006, at C3.

[^341]: This includes AT&T Inc., Sprint Nextel Corp., and Verizon
    Communications, with their wireless divisions accounting for a
    significant part of those advertising dollars. *TNS Media
    Intelligence Reports U.S. Advertising Expenditures Increased 3.0
    Percent in 2005*, [TNS Media Intelligence]{.smallcaps}, News
    Release, Feb. 27, 2006; Sue Marek, *Wireless Ad Dollars on the
    Rise*, [Executive Profile Wire]{.smallcaps}, Jan. 1, 2006.

[^342]: Todd Wasserman, *Nielsen: 2005 advertising spending jumped
    7.4%*, [Brandweek]{.smallcaps}, Feb. 27, 2006, at 12.

[^343]: *J.D. Power and Associates Reports: The Number of Call Quality
    Problems Experienced With a Wireless Service has Declined for a
    Second Consecutive Year*, Press Release, J.D. Power and Associates,
    Mar. 16, 2006.

[^344]: Antone Gonsalves, *Wireless Carriers Cutting Churn Rates*,
    [TechWeb News]{.smallcaps}, Nov. 30, 2005.

[^345]: *Ninth Report.*, at 20657-20658.

[^346]: *Tenth Report*, 15958.

[^347]: *Id*.

[^348]: Cingular Wireless, SEC Form 10-K, filed Feb. 24, 2006, at 9.

[^349]: *Id.*, at 10.

[^350]: *Id*. Cingular also maintains that network integration will
    reduce costs by eliminating approximately 7,600 cell sites.

[^351]: Bruce Mohl, *The Fewest Dropped Calls*, [Boston
    Globe]{.smallcaps}, Apr. 23, 2006.

[^352]: *Tenth Report*, at 15958, citing Phil Cusick and Richard Choe,
    *Characteristics of Wireless Subscribers and Non-Users*, Bear
    Stearns, Equity Research, Feb. 2005, at 25.

[^353]: Bruce Mohl, *The Fewest Dropped Calls*, [Boston
    Globe]{.smallcaps}, Apr. 23, 2006.

[^354]: *Id*.

[^355]: *See Eighth Report*, at 14824-14825.

[^356]: *See Tenth Report*, at 15959, citing David Kesmodel, *T-Mobile
    Offers More Details On Coverage to Ease Concerns*, [Wall Street
    Journal]{.smallcaps}, Apr. 27, 2005.

[^357]: *Id*. More specifically, the top rating means that customers
    have a 95 percent chance of making a call without it being dropped.

[^358]: *Id*.

[^359]: *Id.*

[^360]: *Id*.

[^361]: *See* Section VI.C, Quality of Service, *infra*.

[^362]: *See* *Eighth Report*, at 14843-14856; *Ninth Report*, at
    20659-20661.

[^363]: *Tenth Report*, at 15961.

[^364]: *Id*.

[^365]: Walter S. Mossberg, *Sprint Brings Music Direct to Cellphones,
    But Price is Too High*, [Wall Street Journal]{.smallcaps}, Nov. 17,
    2005, p. B1 ("*Sprint Brings Music Direct to Cellphones*"); *Eighth
    Report*, at 14848-14849.

[^366]: *Sprint Launches the First Instant, Over the Air Music Download
    Service in the U.S.*, Press Release, Sprint, Oct. 31, 2005; *Sprint
    Brings Music Direct to Cellphones*; Li Yuan, *Sprint Launches
    Service That Sells Song Downloads*, [Wall Street
    Journal]{.smallcaps}, Oct. 31, 2005, p. B6.

[^367]: *Verizon Wireless Introduces V CAST Music*, Press Release,
    Verizon Wireless, Jan. 5, 2006; Jesse Drucker, *Verizon Wireless
    Prepares Launch of Music Service*, [Wall Street
    Journal]{.smallcaps}, Jan. 6, 2006, p. A14; *Verizon Wireless
    Unveils V Cast Music Service*, [Communications Daily]{.smallcaps},
    Vol. 26, No. 4, Jan. 6, 2006, pp. 1-2.

[^368]: Jesse Drucker, *Verizon Wireless Prepares Launch of Music
    Service*, [Wall Street Journal]{.smallcaps}, Jan. 6, 2006, p. A14.

[^369]: Walter S. Mossberg, *Music-Playing Cellphones Hit a Flat Note*,
    [Wall Street Journal]{.smallcaps}, Sept. 14, 2005, p. D1; *Cingular
    Offers Radio Service*, [Wall Street Journal]{.smallcaps}, Nov. 14,
    2005.

[^370]: *Tenth Report*, at 15960.

[^371]: *Id*.

[^372]: *Sprint Begins Launch of EV-DO Wireless High-Speed Data
    Service*, Press Release, Sprint, July 7, 2005.

[^373]: *Sprint Premieres High-Speed Entertainment and Information
    Services Via Sprint Power Vision™ Network*, Press Release, Sprint,
    Oct. 31, 2005; Mark Shuper *et al*., *The North American 3G Wireless
    Report*, Morgan Stanley, Equity Research, Feb. 28, 2006, at 4
    ("*North American 3G*").

[^374]: *Cingular Launches 3G Network*, Press Release, Cingular, Dec. 6,
    2005; *North American 3G*, at 4.

[^375]: *Watch This! Cingular Video™ Now Available*, Press Release,
    Cingular, Mar. 7, 2006.

[^376]: Simon Flannery *et al*., *4Q05 Trend Tracker*, Morgan Stanley,
    Equity Research, Mar. 30, 2006, at 35 ("*4Q05 Trend Tracker*").

[^377]: *Tenth Report*, at 15961.

[^378]: *Id*.; *4Q05 Trend Tracker*, at 35.

[^379]: *Id*.

[^380]: *North American 3G*, at 5.

[^381]: Walter S. Mossberg, *ESPN Cellphone Has Great Sports Content But
    Many Trade-Offs*, [Wall Street Journal]{.smallcaps}, Feb. 16, 2006.

[^382]: *Id*.

[^383]: *Id*.; Shawn Young, *New Cellphone Service to Offer
    Entertainment to Young, Affluent*, [Wall Street
    Journal]{.smallcaps}, May 2, 2006, p. D6.

[^384]: *Id*.

[^385]: *See Eighth Report*, at 14826.

[^386]: *Best Cell Service*, [Consumer Reports]{.smallcaps}, Jan. 2006,
    at 20.

[^387]: *Ninth Report*, at 20662.

[^388]: *US Wireless Matrix 4Q05*, at 14.

[^389]: *Id.,* at 4, 14; *Tenth Report*, at 15963. One analyst
    attributes this decline to the following factors: "(1) greater
    industry maturity - many customers have already switched several
    times and are settling with the carrier most suitable for their
    needs; (2) industry structure rationalization and larger size -
    carriers seem reluctant to engage in a price war that would result
    in repricing a very large base of incumbent subscribers; and (3)
    less perceived differentiation \[of\] terms of service and network
    quality." Jason Armstrong *et al*., *Global Telecom Weekly*, Goldman
    Sachs, Equity Research, Apr. 22, 2005, at 2. S*ee*, *also*, *3Q05
    Wireless 411*, at 4 ("Significantly improved retention efforts
    (better deals on upgrade handsets, incentives for signing longer
    contracts, better customer service, and higher network spending)
    following the implementation of local number portability in November
    2003, have led to lower churn rates, in our view. Also, industry
    consolidation has aided churn rates as there are fewer operators to
    choose from."). Another analyst attributes reductions in churn
    "largely to improvements in customer service over the last year."
    Antone Gonsalves, *Wireless Carriers Cutting Churn Rates*, [TechWeb
    News]{.smallcaps}, Nov. 30, 2005 (citing In-Stat analyst David
    Chamberlain).

[^390]: *North American 3G*, at 6.

[^391]: Timothy Horan *et al*., *Despite Recent Concerns, Wireless
    Pricing Remains Relatively Stable*, CIBC World Markets, Equity
    Research, Jan. 26, 2006, at 4. As another analyst wrote, "We
    continue to believe that lower churn will be the primary driver of
    both improved subscriber and profitability growth." Timothy Horan
    *et al*., *Raising 3Q Wireless Subs Forecast On Continued Strong
    Demand*, CIBC, Equity Research, Sept. 19, 2005, at 3.

[^392]: 47 C.F.R. § 52.21(l).

[^393]: 47 C.F.R § 52.31(a); Verizon Wireless\'s Petition for Partial
    Forbearance From Commercial Mobile Radio Services Number Portability
    Obligation and Telephone Number Portability, WT Docket No. 01-184,
    Telephone Number Portability, CC Docket No. 95-116, *Memorandum
    Opinion and Order*, 17 FCC Rcd 14972, 14986, para. 31 (2002)
    ("*Verizon Wireless LNP Order"*).

[^394]: *Verizon Wireless LNP Order*, 17 FCC Rcd at 14986, ¶ 31.

[^395]: Craig Stroup and John Vu, *Numbering Resource Utilization in the
    United States as of June 30, 2005*, Federal Communications
    Commission, May 2006, at 34 ("*May 2006 NRUF Report*"). This figure
    excludes significant porting activity between Cingular and AT&T
    Wireless following the closing of their merger in October 2004.

[^396]: *Id.*

[^397]: *Id*.

[^398]: *Tenth Report*, at 15964.

[^399]: *May 2006 NRUF Report,* at 34.

[^400]: *Id.*

[^401]: *Ninth Report*, at 20664.

[^402]: *3Q05 Wireless 411*, at 4.

[^403]: Phil Cusick and Richard Choe, *Wireless 101: A U.S. Wireless
    Industry Primer*, Bear Stearns, Equity Research, June 2005, at 10.
    *See*, *also*, *Drops in Cellular Fees to Slow: Sprint Exec*,
    [Boston.com]{.smallcaps}, Mar. 29, 2006 (referring to the "fiercely
    competitive market"); and *Analysts, Carriers Disagree on Wireless
    Pricing*, [Communications Daily]{.smallcaps}, Mar. 31, 2006, at 8
    (referring to the "super-competitive wireless pricing market").

[^404]: *4Q05 Wireless 411*, at 55.

[^405]: *See Fourth Report*, at 10164-10165.

[^406]: *Drops in Cellular Fees to Slow: Sprint Exec*,
    [Boston.com]{.smallcaps}, Mar. 29, 2006 (citing Ovum analyst Roger
    Entner). *See*, *also*, *Analysts, Carriers Disagree on Wireless
    Pricing*, [Communications Daily]{.smallcaps}, Mar. 31, 2006, at 8
    (citing Susan Eustis, principal at Wintergreen Research).

[^407]: Fees for actual service are only one element of cost that
    consumers face. One analyst estimated that the average price a
    consumer paid for a wireless handset had fallen from \$128 in 1999
    to \$88 in 2003, a decline of 31 percent. *Likelihood Of Purchasing
    New Cell Phone Is On The Rise*, News Release, J.D. Powers and
    Associates, Oct. 23, 2003.

[^408]: *Econ One Wireless Survey: Wireless Costs Rise*, News Release,
    Econ One, Jan. 20, 2005; *Econ One Wireless Survey: Wireless Costs
    Down*, News Release, Econ One, Jan. 17, 2006. The survey is based on
    an analysis of pricing plan data collected from carriers' web sites.
    *Transcript*, at 78.

[^409]: This does not include any additional charges for roaming or
    long-distance service.

[^410]: The analysis assumes a 70 percent peak/30 percent off-peak split
    in the kind of minutes used.

[^411]: *See* Appendix A, Table 7, *infra*. The Consumer Price Index
    ("CPI") is a measure of the average change over time in the prices
    paid by urban consumers for a fixed market basket of consumer goods
    and services. The basket of goods includes over 200 categories
    including items such as food and beverages, housing, apparel,
    transportation, medical care, recreation, education, and
    communications. The CPI provides a way for consumers to compare what
    the market basket of goods and services costs this month with what
    the same market basket cost a month or a year ago. Starting in
    December of 1997, this basket of goods included a category for
    cellular telephone services. All CPI figures discussed in this
    paragraph were taken from BLS databases found on the BLS Internet
    site at \<http://www.bls.gov\>. The index used in this analysis, the
    CPI for All Urban Consumers (CPI-U), represents about 87 percent of
    the total U.S. population. Bureau of Labor Statistics, *Consumer
    Price Index: Frequently Asked Questions* (visited May 1, 2006)
    \<http://www.bls.gov/cpi/cpifaq.htm\>. While the CPI-U is
    urban-oriented, it does include expenditure patterns of some of the
    rural population. *Transcript*, at 59. Information submitted by
    companies for the CPI is provided on a voluntary basis.
    *Transcript*, at 53.

[^412]: *Transcript*, at 50. The Cellular CPI includes charges from all
    telephone companies that supply "cellular telephone services," which
    are defined as "domestic personal consumer phone services where the
    telephone instrument is portable and it sends/receives signals for
    calls by wireless transmission." This measure does not include
    business calls, telephone equipment rentals, portable radios, and
    pagers. Bureau of Labor Statistics, *How BLS Measures Price Change
    for Cellular Telephone Service in the Consumer Price Index* (visited
    May 1, 2006) \<http://www.bls.gov/cpi/cpifactc.htm\>.

[^413]: From December 1997 compared to the annual index.

[^414]: *See US Wireless Matrix 4Q05*, at 42.

[^415]: Note that this version of ARPU is CTIA's "average monthly local
    bill" and does not include toll or roaming revenues where they are
    not priced into a calling plan. *See* note Error: Reference source
    not found, *infra.*

[^416]: *See* Appendix A, Table 9, *infra*.

[^417]: *See* Appendix A, Table 1, *infra*. There are different ways of
    calculating ARPU. The measure used here, CTIA's "average local
    monthly bill," does not include toll or roaming revenues (CTIA calls
    it "the equivalent of 'local ARPU'"). *Dec 2005 CTIA Survey*, at
    199. CTIA defines an alternative measure of ARPU, which includes
    roaming revenues but not toll revenue. For a comparison between
    these two measures, *see* *Dec 2005 CTIA Survey*, at 200.

[^418]: *See* Section 1, Pricing Trends, *supra*. *See*, *also*, Simon
    Flannery *et al*., *3Q05 Preview*, Morgan Stanley, Equity Research,
    Oct. 14, 2005, at 21 ("We continue to attribute the weakness \[in
    ARPU\] to the advent of cheaper minutes in the form of free nights
    and weekends, free in-network calling, free incoming minutes,
    rollover and family plans").

[^419]: *See* *4Q05 Trend Tracker*, at 37. *See*, *also*, Phil Cusick
    *et al*., *Mid-Quarter Update*, Bear Stearns, Equity Research, Jan.
    27, 2006, at 1 ("Voice ARPU is being pressured by the industry focus
    on family and prepaid plans, which we expect to continue as the
    industry matures. Our checks indicate that \~50% of customers at VZW
    and Cingular are on a family plan of some sort"); and, Phil Cusick
    *et al*., *ARPU Upside For 2006?*, Bear Stearns, Equity Research,
    Jan. 30, 2006, at 1 ("We believe that a substantial portion of Big
    Four subscriber growth since the second of half 2004 came from
    family plans for customers who typically spend far less than the
    industry average").

[^420]: *4Q05 Trend Tracker*, at 37.

[^421]: *Id*.

[^422]: *Id.*, at 35.

[^423]: *Id*.

[^424]: Carriers began reporting NRUF data biannually beginning with the
    period ending June 2000. In addition, the Commission's local
    competition and broadband data gathering program, adopted in March
    2000, provides more data on mobile subscribership. The FCC used to
    require only mobile wireless carriers with over 10,000
    facility-based subscribers in a state to report the number of their
    subscribers in those states twice a year to the Commission. *See*
    Local Competition and Broadband Reporting, *Report and Order*, 15
    FCC Rcd 7717, 7743 (2000). In 2004, however, the Commission changed
    the requirement so that all carriers must report the number of their
    subscribers, regardless of how many they serve, beginning in June
    30, 2005. Local Telephone Competition and Broadband Reporting,
    *Report and Order*, 19 FCC Rcd 22340, 22345 (2004). In their Dec.
    31, 2005 filings, operators reported that they served 203 million
    subscribers. *See* Appendix A, Table 2, *infra*.

[^425]: When the North American Numbering Plan ("NANP") was established
    in 1947, only 86 area codes were assigned to carriers in the United
    States. Only 61 new codes were added during the next 50 years. But
    the rate of activation has increased dramatically since then.
    Between January 1, 1997 and December 31, 2000, 84 new codes were
    activated in the United States. Because the remaining supply of
    unassigned area codes is dwindling, and because a premature
    exhaustion of area codes imposes significant costs on consumers, the
    Commission has taken a number of steps to ensure that the limited
    numbering resources are used efficiently. Among other things, the
    Commission requires carriers to submit data on numbering resource
    utilization and forecasts twice a year. Federal Communications
    Commission*, Numbering Resource Utilization in the United States as
    of June 30, 2001* (Nov. 2001), at 1, 2. This information is
    submitted to the FCC on Form 502. *Id.*

[^426]: Federal Communications Commission*, Numbering Resource
    Utilization in the United States as of June 30, 2001* (Nov. 2001),
    at 1, 2. An assigned number is one that is in use by an end-user
    customer. *Id*., at 3. Carriers also report other phone number
    categories, including: intermediate -- numbers given to other
    companies; aging -- numbers held out of circulation; administrative
    -- numbers for internal uses; reserved -- numbers reserved for later
    activation; and available -- numbers available to be assigned. *Id*.
    Assigned numbers are not necessarily from facilities-based carriers.
    A reseller can assign a number to an end user. This does not
    double-count in the assigned total, since the facilities-based
    carrier only counts that number as an "intermediate" number given to
    the reseller. *Id.*

[^427]: *See Dec 2005 CTIA Survey*. The CTIA effort is a voluntary
    survey of both its member and non-member facilities-based providers
    of wireless service. CTIA asks majority owners of corporations to
    report information for the entire corporation, which helps eliminate
    double counting. To encourage honest reporting, the surveys are
    tabulated by an independent accounting firm under terms of
    confidentiality and are later destroyed. CTIA receives only the
    aggregate, national totals. Not all wireless carriers submit
    surveys, however. In order to develop an estimate of total U.S.
    wireless subscribership, CTIA identifies the markets which are not
    represented in the survey responses. Then, CTIA uses third-party
    estimates or extrapolates from surrogate and/or historical data to
    create an estimate of subscribership for those markets. *See Eighth
    Report*, at 14813, note 211.

[^428]: The advantages of NRUF data over CTIA's survey are discussed in
    the *Seventh Report*, at 13004.

[^429]: FCC estimate, based on preliminary year-end 2005 filings for
    Numbering Resource Utilization in the United States, adjusted for
    porting. In NURF, carriers do not report numbers that have been
    ported to them. *See* Section 2, Local Number Portability, *supra*.
    Therefore, in order to develop an estimate of wireless
    susbcribership, it is necessary to adjust the raw NRUF data to
    account for wireless subscribers who have transferred their wireline
    numbers to wireless accounts. Porting adjustments are developed from
    the telephone number porting database managed by the Local Number
    Portability Administrator, which is currently NeuStar, Inc. The
    database contains all ported numbers currently in service. It also
    contains information about when the number was most recently ported
    (to a carrier other than the carrier to which the number originally
    was assigned) or, in some cases, when the database was updated to
    reflect a new area code. *Trends in Telephone Service*, Federal
    Communications Commission, Apr. 2005, at 8-2 -- 8-3.

[^430]: The nationwide penetration rate is calculated by dividing total
    mobile telephone subscribers by the total U.S. population. According
    to the Bureau of the Census, the combined population of the 50
    states, the District of Columbia, and Puerto Rico as of July 1, 2005
    was estimated to be 300.3 million. *See* U.S. Census Bureau,
    *National and State Population Estimates:* *Annual Population
    Estimates 2000 to 2005* (visited Apr. 25, 2006)
    \<http://www.census.gov/popest/states/tables/NST-EST2005-01.xls \>.
    The number of subscribers refers to the number of separate wireless
    accounts. A particular individual may have more than one wireless
    account.

[^431]: *See* Appendix A, Table 5, *infra*.

[^432]: *See* Appendix A, Table 1, *infra*.

[^433]: *Id*.

[^434]: Timothy Horan *et al*., *4Q05 Mid-Quarter Review*, CIBC, Equity
    Research, Jan. 30, 2006, at 2; Simon Flannery *et al*.,
    *Deteriorating Wireless Trends*, Morgan Stanley, Equity Research,
    Jan. 9, 2006, at 2; Phil Cusick *et al*., *4Q05 Wireless Preview*,
    Bear Stearns, Equity Research, Jan. 17, 2006, at 5.

[^435]: *4Q05 Wireless 411*, at 12. CTIA estimated that more than 96
    percent of its estimated subscribers were digital. *Dec 2005 CTIA
    Survey*, at 49.

[^436]: Based on digital penetration rates found in *4Q05 Wireless 411*,
    at 12 (98.5 percent). Subscribers that can access both the digital
    and analog networks of carriers are considered to be digital
    subscribers. Another analyst estimated that, as of December 2005,
    there were just 2.3 million consumers subscribed to analog cellphone
    plans, primarily in rural areas. Ken Belson, *Analog Callers Hung Up
    in a Digital Country*, [NYTimes.com]{.smallcaps}, May 3, 2006
    (citing Ana Hermoso, an analyst at Informa Telecoms & Media, a
    research firm in London).

[^437]: *Telephia Reports Mobile Data Usage Adoption Hits 50 Percent
    Mark, With Text Messaging Consumption Leading the Way*, News
    Release, Telephia, Apr. 5, 2006 ("*Telephia Reports Mobile Data
    Usage Adoption*"). Telephia bases its estimates on the consumer
    billing records of 30,000 mobile phone users for the top five
    wireless services providers. *Id*., at 2.

[^438]: *Ninth Report*, at 20670; *Tenth Report*, at 15969.

[^439]: *Telephia Reports Mobile Data Usage Adoption*.

[^440]: *M:Metrics: What Ails the Mobile Games Industry?*, Press
    Release, M:Metrics, May 2, 2006 ("*M:Metrics March 2006 Benchmark
    Survey*").

[^441]: *Best Cell Service: Exclusive Survey Results*, [Consumer
    Reports]{.smallcaps}, Jan. 2006, p. 20 ("*Consumer Reports
    Survey*"). The survey collected responses from more than 50,000
    cellphone users in 18 metropolitan areas.

[^442]: *Mobile Game Market is Growing Rapidly With Purchases Soaring 53
    Percent During Q1 2006, According To Telephia,* Press Release,
    Telephia, May 9, 2006.

[^443]: Li Yuan, *Cingular Upgrades Phones' Web Access*, [Wall Street
    Journal]{.smallcaps}, Nov. 17, 2005, p. D2.

[^444]: Li Yuan and Brian Steinberg, *Sales Call: More Ads Hit Cellphone
    Screens*, [Wall Street Journal]{.smallcaps}, Feb. 2, 2006.

[^445]: *Id.*

[^446]: *Id.*

[^447]: *Id.* As explained in the *Tenth Report*, MobiTV service is
    powered onto cellphones by a company called Idetic Inc., which
    streams the programs onto the phones via the Internet from servers
    that first convert the TV signals into digital files. MoviTV-based
    services are offered by Sprint Nextel and Cingular Wireless, among
    other carriers. *See* *Tenth Report*, at 15960.

[^448]: *Telephia Launches Audience Measurement Panel for Mobile TV*,
    Press Release, Telephia, May 24, 2006.

[^449]: *North American 3G*, at 6.

[^450]: *Id*., at 5.

[^451]: *Id*., at 6. Of these 2.3 million 3G handsets, Morgan Stanley
    estimates Verizon Wireless had sold roughly 2 million 3G handsets by
    the end of 2005, but only half of these customers were actually
    paying for Verizon Wireless's V CAST service, while Sprint had
    150,000 3G handsets in service and 75,000 subscribers paying for
    Power Vision service at year end. *Id*. However, Morgan Stanley also
    notes that Sprint reported having 250,000 Power Vision customers in
    early 2006. *Id*., at 3-4.

[^452]: *Id*.

[^453]: FCC estimate, based on preliminary year-end 2005 filings for
    Numbering Resource Utilization in the United States**.**

[^454]: Private communication, TelAstra; *Tenth Report*, at 15969.

[^455]: *US Wireless Matrix 4Q05*, at 25.

[^456]: *Id*.

[^457]: *Id*.

[^458]: *See* Appendix A, Table 8, *infra*. CTIA aggregated all of the
    carriers' MOUs from July 1 through December 31, then divided by the
    average number of subscribers, and then divided by six.

[^459]: *See* Section VI.A., Pricing Levels and Trends, *supra*, and
    Section VII.A, Wireless -- Wireline Competition, *infra*.

[^460]: Robert F. Roche, *CTIA's Wireless Industry Indices*, CTIA-The
    Wireless Association, May 2006, at 224-225.

[^461]: *Id*., at 226.

[^462]: *Id*.

[^463]: *Id*.

[^464]: *Cingular Wireless Reports Strong First-Quarter 2006 Results*,
    Press Release, Cingular, Apr. 19, 2006, at 3; *Tenth Report*, at
    15970.

[^465]: *Verizon Reports Strong First-Quarter 2006 Results*, Press
    Release, Verizon, May 2, 2006, at 4; *Tenth Report*, at 15971.

[^466]: *Mobile Game Market is Growing Rapidly With Purchases Soaring 53
    Percent During Q1 2006, According To Telephia,* Press Release,
    Telephia, May 9, 2006.

[^467]: *BMI Forecasts U.S. Ringtones Sales to Hit \$600 Million in
    2006*, Press Release, BMI, Apr. 3, 2006.

[^468]: *CTIA Notebook*, [Communications Daily]{.smallcaps}, Apr. 10,
    2006, p. 5; Li Yuan, *Spotty Reception: Cellphone Firms Grapple With
    Music, Video Push*, [Wall Street Journal]{.smallcaps}, Apr. 1, 2006.

[^469]: NRUF data is collected by the area code and prefix (NXX) level
    for each carrier, which enables the Commission to approximate the
    number of subscribers that each carrier has in each of the
    approximately 18,000 rate centers in the country. Rate center
    boundaries generally do not coincide with county boundaries.
    However, for purposes of geographical analysis, the rate center data
    can be associated with a geographic point, and all of those points
    that fall within a county boundary can be aggregated together and
    associated with much larger geographic areas based on counties, for
    which population and other data exists. Aggregation to larger
    geographic areas reduces the level of inaccuracy inherent in
    combining unlike areas such as rate center areas and counties.

[^470]: *See* note Error: Reference source not found, *supra*, for a
    description of EAs.

[^471]: *Redefinition of the EA*, at 75.

[^472]: According to one analyst, wireless carriers assign numbers so as
    to minimize the access charges paid to local wireline companies.
    *See* Linda Mutschler *et al.*, *Wireless Number Portability*,
    Merrill Lynch, Equity Research, Jan 9, 2003, at 8 ("For wireless
    operators, the standard practice is to aggregate phone numbers
    within the same area code onto the same or several rate centers,
    whose physical locations would result in the least amount of access
    charges paid to ILECs. Therefore, in each market, wireless operators
    are present in only a small number of rate centers. According to our
    industry sources, this percentage is probably below 20%, and could
    be meaningfully lower than 20%.").

[^473]: "Once the NPA-NXX (i.e., 212-449) is assigned to the wireless
    carrier, the carrier may select any one of its NPA-NXXs when
    allocating that number to a particular subscriber. Therefore, with
    regard to wireless, the subscriber's physical location is not
    necessarily a requirement in determining the phone number assignment
    -- which is very different from how wireline numbers are assigned."
    Linda Mutschler *et al.*, *US Wireless Services:* *Wireless Number
    Portability -- Breaking Rules*, Merrill Lynch, Equity Research, Feb.
    28, 2003, at 3.

[^474]: *See also,* Appendix B, Map 4, *infra*.

[^475]: Vivian Witkind Davis, *Consumer Utility Benchmark Survey:
    Consumer Satisfaction and Effective Choice for Cellular Customers*,
    The National Regulatory Research Institute at The Ohio State
    University, Nov. 2003, at 4.

[^476]: *Letter to the Wall Street Journal*, Press Release, Telephia,
    June 1, 2005.

[^477]: *Tenth Report*, at 15973.

[^478]: *J.D. Power and Associates Reports: Satisfaction With Wireless
    Service Improves as New Service Offerings and Aggressive Pricing
    Plans Positively Impact Customer Perceptions of the Service
    Experience*, Press Release, J.D. Power and Associates, Apr. 19, 2006
    ("*2006 Wireless Customer Satisfaction Study*"); *J.D. Power and
    Associates Reports: The Number of Call Quality Problems Experienced
    With a Wireless Service has Declined for a Second Consecutive Year*,
    Press Release, J.D. Power and Associates, Mar.16, 2006 ("*2006
    Wireless Call Quality Performance Study*"); *J.D. Power and
    Associates Reports: The Average Number of Contacts Needed to Resolve
    a Wireless Customer Care Issue Over the Phone Continues to Rise*,
    Press Release, J.D. Power and Associates, Jan. 25, 2006 ("*2006
    Wireless Customer Care Study*").

[^479]: *2006 Wireless Customer Satisfaction Study*.

[^480]: *Id*. The 2006 Wireless Customer Satisfaction Study is based on
    responses from 22,871 wireless users. The results are from two
    reporting waves, which were conducted in October 2005 and February
    2006.

[^481]: *Id*.

[^482]: *Id*.

[^483]: *J.D. Power and Associates Reports: Satisfaction With Wireless
    Service Providers Decreases Significantly as Recent Mergers Impact
    Customers Perceptions on the Service Experience*, Press Release,
    J.D. Power and Associates, Sept. 7, 2005 ("*2005 Wireless Customer
    Satisfaction Study*").

[^484]: *Tenth Report*, at 15973.

[^485]: *2005 Wireless Customer Satisfaction Study*.

[^486]: *2006 Wireless Call Quality Performance Study*. The 2006
    Wireless Call Quality Study is based on responses from 23,368
    wireless users.

[^487]: *Id*.

[^488]: *Id.* Voice distortion occurs when voice patterns become
    inconsistent due to problems with digital frequency.

[^489]: *Id*.

[^490]: *2006 Wireless Customer Care Study*. The 2006 Wireless Customer
    Care Study was based on responses from more than 11,490 wireless
    users who contacted customer care within the past year.

[^491]: *Id*.

[^492]: *Id*.

[^493]: *New Poll Finds Consumers Overwhelmingly Satisfied With Their
    Wireless Service*, Press Release, MyWireless.org, Mar. 20, 2006. The
    survey polled 1000 cellphone users. *See, also,* Paul Kirby,
    *Wireless Carrier Executives Stress Need for Better Customer
    Service,* [TRDaily]{.smallcaps}, Apr. 10, 2006, at 10-11.

[^494]: *Best Cell Service: Exclusive Survey Results*, [Consumer
    Reports]{.smallcaps}, Jan. 2006, p. 20 ("*Consumer Reports
    Survey*"). The survey collected responses from more than 50,000
    cellphone users in 18 metropolitan areas.

[^495]: *Id*.

[^496]: *See Tenth Report*, at 15974.

[^497]: *Id*.; *Consumer Reports Survey*.

[^498]: *Tenth Report*, at 15974-15975; *Consumer Reports Survey*.

[^499]: Quarterly Report on Informal Consumer Inquiries and Complaints
    Released, *News Release*, Federal Communications Commission,
    February 16, 2006.

[^500]: Quarterly Report on Informal Consumer Inquiries and Complaints
    Released, *News Release*, Federal Communications Commission, August
    12, 2005; Quarterly Report on Informal Consumer Inquiries and
    Complaints Released, *News Release*, Federal Communications
    Commission, September 28, 2005; Quarterly Report on Informal
    Consumer Inquiries and Complaints Released, *News Release*, Federal
    Communications Commission, November 4, 2005.

[^501]: In accordance with established practice in using international
    benchmarking to assess effective competition in mobile markets, the
    comparison of mobile market performance is restricted to Western
    Europe and parts of the Asia-Pacific in order to ensure that the
    countries being compared are roughly similar to the United States
    with regard to their level of economic and telecommunications
    infrastructure development. *See, for example*, UK regulator Oftel's
    review of effective competition in the mobile market: *Effective
    Competition Review: Mobile*, Office of Telecommunications, Feb.
    2001, at 7.

[^502]: *Interactive Global Wireless Matrix 4Q05*.

[^503]: In addition, Merrill Lynch has noted that these data have
    certain limitations for comparing countries that use calling party
    pays ("CPP") versus mobile party pays (also known as receiving party
    pays). For reasons explained below, the figures for minutes of use
    may be somewhat understated, and the revenue figures used to
    calculate average revenue per minute may be somewhat overstated, in
    markets where CPP is used relative to non-CPP markets.

[^504]: *See* Appendix A, Table 10, *infra*.

[^505]: *Interactive Global Wireless Matrix 4Q05*.

[^506]: *Id*. As noted in previous reports, reported mobile subscriber
    figures and penetration may be overstated in some countries,
    particularly those with a high percentage of prepaid subscribers,
    due to double counting of subscribers who have switched service
    providers but have not yet been removed from their former provider's
    subscriber base, or those who subscribe to multiple mobile service
    providers and therefore have multiple SIM cards. As noted in the
    *Tenth Report*, carriers have widely different policies to determine
    when to cut off inactive subscribers and to remove them from their
    reported subscriber base. In addition, it is becoming more prevalent
    for people to subscribe to multiple mobile service providers. *See
    Tenth Report*, at 15976, note 452. *See, also,* *Seventh Report*, at
    13033, and *Sixth Report*, at 13391. As one analyst recently
    commented, "While the proportion of the population using mobile
    phones has stabilized in most developed-world markets at around
    80-85%, the trend among many users for buying second or even third
    subscriptions shows no sign of slowing. Operators in these markets
    are actively encouraging the practice, selling prepaid SIM cards
    with \$5 to \$10 of preloaded credit in order to boost their
    subscription numbers..." *See* Bob Wallace, *30 Countries Passed
    100% Mobile Phone Penetration in Q1*, Telecommunications Online,
    June 9, 2006 (quoting Devine Kofiloto, Principal Analyst at Informa
    Telecoms and Media).

[^507]: *Interactive Global Wireless Matrix 4Q05*.

[^508]: *Id*.

[^509]: *Id*.

[^510]: *Id*.

[^511]: *Id*. For purposes of comparing metrics in different countries,
    average MOUs include both incoming and outgoing minutes, and usually
    exclude traffic related to mobile data services. Figures for MOUs
    are potentially somewhat understated in markets that employ CPP as
    compared to the U.S. mobile market and other non-CPP markets due to
    double-counting of same-network ("on-net") mobile-to-mobile minutes
    under the mobile party pays system used in the U.S. and other
    non-CPP markets. The double counting occurs because each minute of
    an on-net call is billed to both the caller and the receiver under
    the mobile party pays system, whereas under CPP each on-net minute
    is billed only to the calling party, and therefore counted only
    once. *See Tenth Report*, at 15976, note 457.

[^512]: *Interactive Global Wireless Matrix 4Q05*.

[^513]: *Id*.

[^514]: *See* Section VI.A.1, Pricing Trends, *supra*. Average revenue
    per minute ("RPM") is calculated by dividing monthly voice-only ARPU
    by MOUs. Service revenues included in ARPU reflect the fees mobile
    operators collect from other network operators for terminating
    incoming calls on their networks as well as monthly service charges
    and usage fees paid by mobile subscribers. As noted above, MOUs
    figures may be somewhat understated in CPP markets relative to
    non-CPP markets (due to the aforementioned double-counting of on-net
    mobile-to-mobile minutes in non-CPP markets), and the revenue
    figures used to calculate ARPU may be somewhat overstated in CPP
    markets relative to non-CPP markets (due to double-counting of
    mobile termination revenues for off-net mobile-to-mobile calls in
    CPP markets). Consequently, the RPM figures (ARPU divided by MOUs)
    probably overstate the difference between RPM in the United States
    and CPP markets. The potential for service revenues to be somewhat
    overstated in CPP markets was brought to the Commission's attention
    by Professor Stephen Littlechild, and confirmed by Merrill Lynch
    through email correspondence.

[^515]: *Interactive Global Wireless Matrix 4Q05*.

[^516]: *Id*. In email correspondence, Merrill Lynch indicates that RPM
    figures may overstate the difference between RPM in CPP and non-CPP
    markets by about 15 percent due to the two factors mentioned above.
    This adjustment would narrow the difference between the European
    average and U.S. RPM by about three cents.

[^517]: *Id*.

[^518]: *Id*.

[^519]: *Id*.

[^520]: *See, for example*, Robert W. Crandall and J. Gregory Sidak,
    *Should Regulators Set Rates to Terminate Calls on Mobile
    Networks?*, [Yale Journal on Regulation]{.smallcaps}, Vol. 21, No.
    2, Summer 2004, pp. 1-46, at 6-8; Stephen C. Littlechild, *Mobile
    Termination Charges: Calling Party Pays Versus Receiving Party
    Pays*, [Telecommunications Policy,]{.smallcaps} Vol. 30, No. 5-6,
    June-July 2006, pp. 242-277, at 244-245, 253-254
    (["]{.smallcaps}*Calling Party Pays Versus Receiving Party
    Pays*[")]{.smallcaps}.

[^521]: *Calling Party Pays Versus Receiving Party Pays*, at 255. While
    theory also suggests the possibility that mobile party pays may lead
    mobile subscribers to switch off their phones or withhold their
    mobile phone numbers to avoid paying for incoming calls, in practice
    U.S. mobile operators have overcome the disincentive to receive
    calls under mobile party pays through the introduction of bucket
    plans with low per-minute rates and other schemes for stimulating
    usage, such as free night and weekend minutes. *Id*., at 254, 268.

[^522]: *Id*., at 259. Littlechild also concludes there is no evidence
    that mobile party pays lowers the mobile penetration rate compared
    to calling party pays. *Id*.

[^523]: *See, e.g.* , Timothy Horan *et al*., *International Wireless
    Trends Reinforce Our Bullish View On U.S. Wireless*, CIBC World
    Markets, Equity Research, June 6, 2005, at 4-6.

[^524]: *See* *Tenth Report*, at 15977.

[^525]: *Interactive Global Wireless Matrix 4Q05*.

[^526]: *Id*.

[^527]: *Id*.

[^528]: *M:Metrics March 2006. Benchmark Survey.*

[^529]: *SMS Text Messaging Keeps Strong Edge in Asia Pacific*,
    [TeleClick]{.smallcaps}, Mar. 9, 2006 ("*SMS Keeps Strong Edge in
    Asia Pacific*").

[^530]: *Tenth Report*, at 15978; *Ninth Report*, at 20680.

[^531]: Frank J. Governali *et al.*, *Wireless Data Prospects
    Brightening*, Goldman Sachs, Global Investment Research, Apr. 16,
    2004, at 12; Li Yuan, *Text Messages Sent by Cellphone Finally Catch
    on in U.S.*[, Wall Street Journal,]{.smallcaps} Aug. 11, 2005, p.
    B1.

[^532]: *Id*. As noted above, the pay-as-you-go option and monthly SMS
    packages are almost equally popular among SMS users in the United
    States, and carriers typically charge around \$0.10 per message to
    send a text message on a pay-as-you-go basis. *See* Section IV.A.3,
    Mobile Data Pricing, *supra*. As noted in the *Ninth Report*, the
    more rapid spread of mobile data services in overseas markets than
    in the United States may reflect a variety of factors influencing
    the demand for mobile data services, including differences in the
    age composition of the mobile subscriber base, the degree of
    technological standardization and compatibility among competing
    mobile networks, the availability of more advanced handsets,
    wireline Internet penetration rates, and the relative prices of
    mobile voice, mobile data, and wireline Internet access. See *Ninth
    Report*, at 20680.

[^533]: *M:Metrics March 2006. Benchmark Survey.*

[^534]: *Id*.

[^535]: *Id*.

[^536]: *SMS Keeps Strong Edge in Asia Pacific*.

[^537]: *Global Momentum for High-Speed Mobile Broadband Accelerates on
    an Unprecedented Scale*, GSM Association, Press Release, May 5,
    2006.

[^538]: GSM Association, *GSM Subscriber Statistics Q1 2006* (visited
    May 8, 2006) \<http://www.gsmworld.com\> ("*GSM Subscriber
    Statistics Q1 2006*").

[^539]: *Id*.

[^540]: *See* *Ninth Report*, at 20681.

[^541]: Peter Rysavy, *Data Capabilities: GPRS to HSDPA and Beyond*,
    White Paper Developed for 3G Americas, Rysavy Research, Sept. 2005,
    at 52-53.

[^542]: *GSM Subscriber Statistics Q1 2006*.

[^543]: *European 3G Users Embracing New Multimedia Mobile Culture*,
    Press Release, M:Metrics, Feb. 7, 2006.

[^544]: *Id*.

[^545]: Walter S. Mossberg, *Cingular Joins Rivals With Fast, Reliable
    Wireless Broadband*, [Wall Street Journal,]{.smallcaps} Jan. 19,
    2006, p. A9.

[^546]: *Id*.

[^547]: *Id*. *See, also*, *North American 3G*, at 4.

[^548]: *3G Operators,* [3G Today]{.smallcaps} (visited May 8, 2006)
    \<http://www.3gtoday.com\>.

[^549]: *See* Section IV.B.1.C, Technology Choices and Upgrades of
    Mobile Telephone Carriers, *supra*.

[^550]: Simon Flannery *et al*., *3G Economics a Cause for Concern*,
    Morgan Stanley, Equity Research, Feb. 1, 2005, at 11.

[^551]: *Ninth Report*, at 20681.

[^552]: Telecommunications Carriers Association ("TCA"), *Number of
    Subscribers* (visited May 8, 2006)
    \<http://www.tca.or.jp/eng/database/daisu/index.html\>.

[^553]: *Id*.

[^554]: *3G Subscribers,* [3G Today]{.smallcaps} (visited May 8, 2004)
    \<http://www.3gtoday.com\>.

[^555]: *See* *Sixth Report*, at 13381. One analyst estimated that, in
    2004, only 25 percent of wireless users were business customers,
    with the remaining 75 percent being consumers. *10-Year Wireless
    Projections*, [Kagan Wireless Telecom Investor]{.smallcaps}, June 6,
    2005, at 2.

[^556]: Roger Cheng, *Telecom Companies Pin Hopes On Developing Mobile
    Commerce*, [Wall Street Journal]{.smallcaps}, Apr. 17, 2006, at B6.

[^557]: *See* Section 1, Subscriber Growth, *supra*.

[^558]: Simon Flannery *et al*., *Deteriorating Wireless Trends*, Morgan
    Stanley, Equity Research, Jan. 9, 2006, at 7. The authors add, "the
    inescapable conclusion is that the population aged 20-69 must be
    highly penetrated."

[^559]: Roger Cheng, *Telecom Companies Pin Hopes On Developing Mobile
    Commerce*, [Wall Street Journal]{.smallcaps}, Apr. 17, 2006, at B6.

[^560]: Stephen J. Blumberg, Ph.D. and Julian V. Luke, *Wireless
    Substitution: Preliminary Data from the 2005 National Health
    Interview Survey*, National Center for Health Statistics, Centers
    for Disease Control, available at
    \<http://www.cdc.gov/nchs/products/pubs/pubd/hestats/wireless/wireless2005.htm\>
    (visited May 15, 2006).

[^561]: Li Yuan, *More U.S. Households Are Ditching Landline Phones for
    Wireless*, [Wall Street Journal]{.smallcaps}, Mar. 31, 2006, at A12
    (citing a survey by Forrester Research Inc.).

[^562]: *Id*.

[^563]: *Id*.

[^564]: *Id*. (citing a survey by the NPD Group). Another 42 percent
    said that they also had a landline phone, but they used their
    cellphones "most." Only 43 percent said they still used their
    landline phones as the primary phone. *Id*.

[^565]: *Nearly One in Five Wireless Service Buyers Report No Landline
    Service, Survey Says*, [TRDaily]{.smallcaps}, Dec. 6, 2005 (citing a
    survey by the Consumer Electronics Association).

[^566]: Sebastian Rupley, *The Cellular Home*, [PC
    Magazine]{.smallcaps}, Aug 16, 2005.

[^567]: Only 43 percent said they still used their landline phones as
    the primary phone. Li Yuan, *More U.S. Households Are Ditching
    Landline Phones for Wireless*, [Wall Street Journal]{.smallcaps},
    Mar. 31, 2006, at A12 (citing a survey by the NPD Group). Another 42
    percent said that they also had a landline phone, but they used
    their cellphones "most." *Id*.

[^568]: *See Eighth Report*, at 14832-14833; *Ninth Report*, at
    20684-20685; *Tenth Report*, at 15980.

[^569]: *4Q05 Wireless 411*, at 55.

[^570]: *Leap Reports Results for Fourth Quarter and Full Year 2005*,
    News Release, Leap, Mar. 16, 2006; *MetroPCS Reaches Two Million
    Customers on Four Year Anniversary of Service*, News Release,
    MetroPCS, Feb. 7, 2006 (as of February 2006).

[^571]: *See* Cricket, *View Coverage Maps* (visited May 3, 2006)
    \<http://www.mycricket.com/coverage/\>.

[^572]: *See* MetroPCS, *Find Your Coverage Area* (visited May 3, 2006)
    \<http://www.metropcs.com/coverage/coverageareas.php?currentNav=none
    \>.

[^573]: *See*, e.g.,T-Mobile, *All Plans* (visited May 3, 2006) \<
    http://www.t-mobile.com/\>; Cingular, *Rate Plans* (visited May 23,
    2006) \< http://www.cingular.com/\>; Verizon Wireless, *America's
    Choice* (visited May 3, 2006) \<http://www.verizonwireless.com/ \>;
    and, Sprint Nextel, *Planes for Sprint PCS Phones* (visited May 3,
    2006) \<http://www.sprint.com/\>. *See*, *also*, Tim Horan,
    *Datatimes*, CIBC World Markets, May 3, 2006 ("By comparison, the
    larger national carriers offer 1,000 minutes for between \$50-\$56
    per month and 2,000-2,500 for \$100 per month, but do not offer data
    services in those plans"). In addition, T-Mobile offers regional
    plans with 3,000 "Whenever" minutes for \$50 a month. T-Mobile, *All
    Plans* (visited May 8, 2006) \< http://www.t-mobile.com/\>.

[^574]: Services provided over WLANs are not CMRS services. *See* 47
    C.F.R. §§ 20.3, 20.9 for a discussion of commercial mobile radio
    services. WLANs are permitted to operate on an unlicensed basis
    under Part 15 of the FCC's rules. *See* 47 C.F.R. §15, et seq.

[^575]: Kenneth R. Carter, Ahmed Lahjouji, and Neal McNeal, Unlicensed
    and Unshackled: A Joint OSP-OET White Paper on Unlicensed Devices
    and Their Regulatory Issues, OSP Working Paper #39, May 2003, at
    28-29. ("*OSP-OET White Paper*")

[^576]: *See Seventh Report*, at 13062-13063. Hot spots typically rely
    on high-speed landline technologies, such as T-1 lines, DSL, or
    cable modems, to connect to the PSTN and Internet.

[^577]: *See* \<http://www.wifi411.com/\> (visited May 18, 2006).

[^578]: *See*
    \<http://intel.jiwire.com/hot-spot-directory-browse-by-state.htm?country_id=1\>
    (visited May 18, 2006).

[^579]: *TIA's 2006 Telecommunications Market Review and Forecast* at
    190.

[^580]: *Ninth Report*, at 20687.

[^581]: *See Tenth Report*, at 15983.

[^582]: *See*, *for example*, Sprint PCS, *PCS for Business: Voice and
    Data* (visited May 18, 2006)
    \<https://wifi.sprintpcs.com/signup/terms.aspx\>; T-Mobile,
    *T-Mobile Hotspot: Service Plans* (visited May 18, 2006)
    \<https://selfcare.hotspot.t-mobile.com////services_plans.do\>.

[^583]: *See, for example*, T-Mobile, *T-Mobile Hotspot U.S. Location
    Map* (visited May 18, 2006)
    \<http://locations.hotspot.t-mobile.com/\>.

[^584]: *See* Section, Section VI.B.1, Subscriber Growth, *supra*.

[^585]: *See* Section VI.D.2, Minutes of Use, *supra*, and VI.E,
    International Comparisons, *supra*.

[^586]: *See* Section VI.B.1, Subscriber Growth, *supra*, and Section
    VI.B.3, Mobile Data Usage, *supra*.

[^587]: *See* Section VI.A.1, Pricing Trends, *supra*.

[^588]: *See* Section VI.E, International Comparisons, *supra*.

[^589]: *See* Section IV.B.1, Technology Deployment and Upgrades,
    *supra*.

[^590]: As noted earlier, the mergers of Sprint and Nextel and of Alltel
    and Western Wireless mergers closed too recently for their effects
    to be reflected in the indicators of market structure, carrier
    conduct, and market performance. The structural changes resulting
    from these transactions, and their potential impact on carrier
    conduct and market performance, will be reflected in future reports.

[^591]: *See* Appendix A, Table 9, *infra*.

[^592]: *See* Section A, Background, *supra.*