**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | WT Docket No. 05-71          |
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**TENTH REPORT**

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  **Adopted: September 26, 2005**     **Released: September 30, 2005**

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By the Commission: 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 30

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 50

D. Consolidation and Exit 55

1\. Sales and Swaps 58

2\. Affiliations 63

E. Entry Conditions and Potential Barriers to Entry 67

1\. Spectrum Allocation and Assignment 68

a\. Cellular, Broadband PCS, and SMR 69

b\. 800 MHz Band Reconfiguration and 1.9 GHz Spectrum Exchange 75

c\. Narrowband Spectrum 76

d\. 700 MHz Bands 78

e\. Advanced Wireless Services 82

f\. Broadband Radio Service 86

2\. Other Potential Barriers to Entry 91

F. Rural Markets 93

1\. Geographical Comparisons: Urban vs. Rural 93

2\. Rural Competition 94

3\. Conclusion 95

IV\. CARRIER CONDUCT IN THE MOBILE TELECOMMUNICATIONS MARKET 96

A. Price Rivalry 97

1\. Developments in Mobile Telephone Pricing Plans 97

2\. Prepaid Service 99

3\. Mobile Data Pricing 101

B. Non-Price Rivalry 105

1\. Technology Deployment and Upgrades 106

a\. Overview 106

b\. Background on Network Design and Technology 109

c\. Technology Choices and Upgrades of Mobile Telephone Carriers 113

d\. Coverage by Technology Type 117

e\. Data-Only Networks and Technology Deployment 120

2\. Capital Expenditures 127

3\. Roaming 128

4\. Advertising and Marketing 130

5\. Quality of Service 132

6\. Mobile Data Services and Applications 139

V. CONSUMER BEHAVIOR IN THE MOBILE TELECOMMUNICATIONS MARKET 145

A. Access to Information on Mobile Telecommunications Services 146

B. Consumer Ability to Switch Service Providers 148

1\. Churn 148

2\. Local Number Portability 150

VI\. MOBILE TELECOMMUNICATIONS MARKET PERFORMANCE 153

A. Pricing Levels and Trends 154

1\. Pricing Trends. 154

2\. Average Revenue Per Unit 159

B. Quantity of Services Purchased 160

1\. Subscriber Growth 160

a\. Mobile Telephony 160

b\. Mobile Data 165

c\. Satellite 167

2\. Minutes of Use 168

3\. Mobile Data Usage 170

4\. Sub-National Penetration Rates 174

C. Quality of Service 176

D. International Comparisons 185

1\. Mobile Voice 185

2\. Mobile Data 192

VII\. INTERMODAL ISSUES 195

A. Wireless -- Wireline Competition 195

1\. Wireless Substitution 196

2\. Wireless Alternatives 199

B. Wireless Local Area Networks 201

VIII.CONCLUSION 204

IX\. ADMINISTRATIVE MATTERS 208

APPENDIX A: Mobile Telephone Tables

APPENDIX B: Maps

APPENDIX C: List of NOI Commenters

Statement of Commissioner Copps

# 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 2004 calendar year and the first
    half of the 2005 calendar year.[^1]

2.  In this report the Commission concludes that even with fewer
    nationwide mobile telephone carriers there is still effective
    competition in the CMRS marketplace. Among the indicators of market
    structure that support this conclusion, we note that 97 percent of
    the total U.S. population lives in counties with access to three or
    more different operators offering mobile telephone service, the same
    level as 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
    and five or more different mobile telephone operators also remained
    roughly the same as in the previous year. In contrast, there was a
    sharp decline in the percentage of the U.S. population living in
    counties with access to six or more different mobile telephone
    operators as compared with the previous year, due largely to the
    acquisition of AT&T Wireless by Cingular Wireless. This transaction
    resulted in the first drop in the number of nationwide competitors
    since the Commission began compiling these reports. Nevertheless,
    although the mobile telephone market has become more concentrated as
    a result of the merger of two nationwide carriers, 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 compel 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 proliferation of "family plan"
    offerings, and by the introduction of a variety of new prepaid
    plans, or entirely new brands (such as "Boost Mobile"), targeted at
    previously untapped segments of the market. The result has been a
    significant increase in the percentage of wireless users who
    subscribe to prepaid plans in the past year. 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. Both
    Sprint and Cingular appear to be making a concerted effort to match
    the mobile broadband service which Verizon Wireless launched in late
    2003 and now offers in a number of major U.S. cities. To this end,
    in July 2005 Sprint began to deploy the same CDMA2000 1xEV-DO
    network technology that Verizon Wireless uses, whereas Cingular
    Wireless is planning to deploy UMTS (or WCDMA) with HSDPA (High
    Speed Data Packet Access) technology in a number of major U.S.
    markets by the end of 2005. In addition to investing in network
    deployment and upgrades, carriers have continued to pursue
    strategies designed to differentiate their brands from rival
    offerings based on attributes such as network coverage and service
    quality. A notable example of such an attempt at brand
    differentiation in the past year was T-Mobile's introduction of an
    interactive "Personal Coverage Check" feature to its Web site which
    enables customers to check the quality of network coverage where
    they live and work before they purchase service.

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 average about 1.5 to 3.0 percent per month, a
    slight decline from the previous 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. While the advent of LNP has not resulted in an
    increase in churn, analyst reports continue to suggest that LNP has
    put added pressure on carriers to improve service quality in order
    to retain existing customers and to avoid increased churn.

5.  Indicators of market performance show that competition continues to
    afford many significant benefits to consumers. In the 12 months
    ending December 2004, the United States mobile telephone sector
    increased subscribership from 160.6 million to 184.7 million,
    raising the nationwide penetration rate to approximately 62 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 more than
    580 minutes in the second half of 2004 from 507 minutes in 2003 and
    427 minutes in 2002. Moreover, although U.S. mobile subscribers
    still prefer to use their mobile phones to talk rather than to send
    text messages ("SMS"), the volume of SMS traffic grew to 4.7 billion
    per month in December 2004, more than double the 2 billion messages
    per month reported in December 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 2004. 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.

# INTRODUCTION

## Background 

6.  In 1993, Congress created the statutory classification of Commercial
    Mobile Services[^2] to promote the consistent regulation of mobile
    radio services that are similar in nature.[^3] 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.[^4] This report is
    the tenth of the Commission's annual reports[^5] on the state of
    CMRS competition.[^6]

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.[^7]

8.  With the *Tenth 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.[^8] 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 February 2005, the Wireless Telecommunications Bureau
    ("Bureau") released a Public Notice ("Tenth CMRS PN") seeking data
    and information on the status of competition in the CMRS
    industry.[^9] 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, mapable
    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 *Tenth 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 availability of roaming, 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 *Tenth CMRS PN.*[^10] Some commenters stated that the CMRS
    marketplace remains competitive.[^11] One commenter further
    contended that there is significant wireless competition in rural
    areas, and that rural customers receive the same benefits of
    competition as urban customers.[^12] Other commenters provided input
    on the extent to which Mobile Virtual Network Operators ("MVNOs")
    and resellers compete in the CMRS industry.[^13] In general,
    however, commenters submitted little new data relating to the
    various metrics used to assess competitive market conditions with
    respect to CMRS. Moreover, service providers did not submit maps of
    their coverage areas or distinguish between areas where they provide
    coverage and areas where they market service.

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 two new sources of information: the
    Numbering Resource Utilization / Forecast ("NRUF") database,
    described below, and information submitted at a Public Forum held at
    the Commission in February 2002.[^14] 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.[^15] 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.[^16]
    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 minutia 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.[^17] 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. As in the *Seventh Report*, we
    continue to use the NRUF data to determine the total number of
    mobile telephone subscribers and paging subscribers.[^18] In
    addition, because we collect NRUF data on a small, rate center area
    basis,[^19] 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") basis and continues to report them
    in this manner in this report.[^20] Finally, beginning with the
    *Ninth Report*, we used NRUF data to measure market concentration on
    an EA basis.[^21] In particular, the subscriber market shares we use
    to calculate the Herfindahl-Hirschman Index ("HHI") for EAs are
    based on NRUF data.[^22] 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.[^23] 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[^24] 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.[^25] 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.[^26] 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[^27] 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.

## Structure of Report

16. As noted above, the structure of the *Tenth 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.[^28] 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.[^29]
    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 *Tenth 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.[^30]

23. For purposes of this report, mobile data service is considered to be
    the delivery of non-voice information to a mobile device. Two-way
    mobile data services include 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 (also called short messaging service, or
    "SMS"), multimedia messaging services ("MMS") such as exchanging
    digital photos, information alerts, entertainment applications such
    as ringtones and games, web browsing, e-mail, access to files stored
    on corporate servers, and wireless telemetry.[^31]

24. Any mobile satellite service ("MSS") that involves the provision of
    commercial mobile radio service directly to end users is by
    statutory definition CMRS.[^32] As detailed in the *Eighth Report*,
    the Commission permits MSS providers in the 2 GHz,[^33] Big
    LEO,[^34] and L-Band[^35] frequency bands to provide an ancillary
    terrestrial component ("ATC") to their satellite systems, provided
    that the MSS licensee: (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.[^36] 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.[^37] The Commission has
    granted one application to add ATC to MSS satellite offerings, to
    Mobile Satellite Ventures ("MSV") in the L-Band.[^38]

## Overview of Service Providers

### Facilities-Based Mobile Telephone Providers

25. As of June 2005, there were five mobile telephone operators in the
    United States that analysts typically describe as nationwide: Sprint
    PCS,[^39] Verizon Wireless, LLC ("Verizon Wireless"),[^40]
    T-Mobile,[^41] Cingular Wireless, LLC ("Cingular Wireless" or
    "Cingular"),[^42] and Nextel. 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 five 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 five
    national operators has networks covering at least 200 million
    people, while the next largest provider covers less than 62 million
    people.[^43] In addition to the nationwide operators, there are a
    number of large regional players, including ALLTEL Corp.
    ("ALLTEL"),[^44] United States Cellular Corp. ("US Cellular"), and
    Dobson Communications ("Dobson").

26. Because the five 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 offer service to consumers by purchasing airtime at
    wholesale rates from facilities-based providers and reselling it at
    retail prices.[^45] Resellers today are often referred to as MVNOs
    (Mobile Virtual Network Operators). One commenter argued that
    "resold CMRS service can provide significant competition to
    traditional wireless operators provided that the resold service
    differentiates itself from the offerings of the large, national
    carriers."[^46] According to information provided to the FCC in its
    ongoing local competition and broadband data gathering program, the
    resale sector accounts for approximately 9 percent of all mobile
    telephone subscribers, a 50 percent increase from 2003.[^47] In
    addition, most MVNO customers are on prepaid plans.[^48] According
    to one analysis, MVNOs served as many prepaid subscribers in 2004 as
    facilities-based carriers offering their own carrier-branded prepaid
    offerings.[^49]

28. With the exception of TracFone Wireless Inc., which serves
    approximately 4.5 million customers with prepaid offerings,[^50]
    there are few large, independent[^51] resellers of wireless service.
    However, the interest in resale, particularly prepaid-only ventures,
    is growing.[^52] Virgin Mobile USA ("Virgin Mobile"), a joint
    venture between Sprint PCS and Richard Branson's Virgin Group, LLC,
    was launched in July 2002, targeting its prepaid offerings at the
    youth market.[^53] The venture now serves more than three million
    subscribers.[^54] Qwest Corporation ("Qwest"), having decided to
    exit the facilities-based provision of wireless service in 2003, now
    resells Sprint PCS services under its own brand name.[^55] AT&T
    Corp, former owner of AT&T Wireless, announced plans in 2004 to
    reenter the mobile telephone market through resale of Sprint PCS
    services.[^56] In February 2005, a new venture, Movida
    Communications, announced plans to target the growing population of
    Hispanic consumers in the US through an MVNO arrangement (also with
    Sprint PCS).[^57] In March 2005, U.S. Internet service provider
    EarthLink and South Korea\'s SK Telecom announced a wireless resale
    venture, SK-EarthLink, focusing on customers with data-intensive
    needs.[^58] Time-Warner, Disney, 7-Eleven, and Wal-Mart have either
    announced plans to launch, or are considering launching, their own
    MVNOs.[^59] There is even a MVNO, Firefly Mobile, aimed at families
    with 8- to 12-year old children.[^60]

29. In addition, Nextel's is targeting the teenage market through a
    subsidiary, using an alternative prepaid brand, "Boost Mobile"[^61]
    As of Dec. 31, 2004, Nextel had 1.2 million subscribers on Boost
    Mobile prepaid plans.[^62]

### Data-Only Providers 

30. 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.

31. In August 2004, Clearwire, a wireless broadband company led by Craig
    McCaw, launched mobile broadband service in Jacksonville, FL using
    BRS and leased EBS spectrum in the 2.5 GHz band. The company has
    since expanded service to twelve additional markets and plans to
    roll out service to four new markets in the near future.[^63] The
    service provides consumers wireless broadband Internet access at
    downstream speeds ranging from 512 kbps to 1.5 Mbps using a
    "plug-and-play" wireless modem device connected directly to a
    desktop or laptop computer.[^64] 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.[^65] Clearwire is using Orthogonal Frequency Division
    Multiplexing (OFDM) technology developed and manufactured by its
    equipment subsidiary, NextNet Wireless, and spectrum in the 2.5 GHz
    BRS/EBS band.[^66] As discussed in Section IV.B.1.e, Clearwire
    announced in October 2004 that it plans to deploy equipment based on
    the 802.16e WiMax standard once the standard has been
    finalized.[^67]

32. In addition to Clearwire, several small wireless broadband providers
    operating in the BRS/EBS band have begun to roll out mobile or
    portable wireless broadband services using non-line-of-sight OFDM
    equipment, some of which is manufactured by NextNet Wireless, to
    their customers. 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. Paging/messaging carriers provide narrowband data-only services
    using paging and narrowband PCS networks and spectrum, and
    paging/messaging devices or units. In November 2004, Metrocall
    completed its acquisition of WebLink Wireless and formed a new
    company called USA Mobility. USA Mobility is the largest U.S. paging
    company and offers both traditional paging services and two-way
    messaging services. Other major paging carriers include SkyTel
    Communications, Inc., SBC Paging, and Verizon Wireless' paging
    business.[^68]

34. In addition to the paging/messaging carriers, there are a few
    carriers that sell other narrowband mobile data services
    exclusively, rather than both mobile voice and data services,
    including Motient Corp. ("Motient") and Space Data Corp ("Space
    Data"). Motient has specialized in selling and integrating wireless
    data solutions to enterprises, including wireless e-mail and other
    wireless Internet applications.[^69] Space Data is currently
    providing commercial telemetry services across the south-central
    United States to energy and other industrial companies.[^70]

### Satellite Providers

35. As of year-end 2004, a number of carriers were providing mobile
    satellite services ("MSS") in the United States.[^71] 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, the successor to Motient
    Services Inc., which had previously entered into a joint venture
    with Mobile Satellite Ventures (Canada) Inc. and the Canadian
    licensee of MSS satellite MSAT-1 (TMI Corporation), were also
    providing voice and data communications via satellite in the L-band
    at year-end 2004. 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. Another company, ICO Global Communications
    (Holdings) Ltd., has 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[^72]
    with the Commission in proceedings or with applications.[^73]

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.[^74] 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.[^75] 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.[^76]

41. To date, 277 million people, or 97 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.[^77] However, these counties make up
    only 63 percent of the total land area of the United States,
    reflecting the nation's uneven population distribution.[^78] Roughly
    250 million people, or 87 percent of the U.S. population, live in
    counties with five or more mobile telephone operators competing to
    offer service, while 117 million people, or 41 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, four or more,
    or five or more mobile telephone carriers is unchanged since the
    *Ninth Report*, there has been a sharp drop in the percentage of the
    population living in counties with more than six providers[^79] due
    to the merger of Cingular Wireless and AT&T Wireless.[^80]

### 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.[^81] 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.[^82]

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.[^83]

44. Finally, we use EAs as the geographic unit for measuring
    concentration in mobile telephone markets because we believe that an
    EA captures the area in which the average person shops for and
    purchases a mobile phone, most of the time.[^84] 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.[^85]

45. Based on NRUF data as of December 2004, the average value of the
    HHIs weighted by EA population is 2450, and the median value is
    about 2583.[^86] The values of HHIs for individual EAs range from a
    low of 1554 in EA 107 (covering parts of Wisconsin, Iowa and
    Minnesota, including the Twin Cities) to a high of 7064 in EA 142
    (covering parts of Nebraska and Wyoming). Thus, the values of the
    weighted average HHI and also the HHIs in nearly half of all EAs are
    lower than 2500, which would be the value of HHI for a hypothetical
    market in which there are four carriers with equal market shares.

46. As a benchmark for examining the EAs with relatively high HHIs, we
    note that the value of HHI in a market that is equally divided among
    three competitors is approximately 3333. However, there are five or
    more competitors in all but two of the EAs with HHIs in excess
    of 3300. This suggests that the high HHI values in most of these EAs
    are generally due not to the number of competitors, but rather to
    the limited effect of competitive entry to date in eroding the
    market shares of one or both carriers holding the two original
    cellular licenses.

47. 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. In theory, therefore, market
    concentration in such industries will tend to be high relative to
    industries characterized by greater potential demand or smaller
    minimum efficient scale.

48. 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 EA
    with the highest HHI has the third smallest population, and the EA
    with the second highest HHI (EA 121, covering parts of Nebraska and
    Colorado) has the smallest population.

49. However, some EAs are clear exceptions to this pattern. In
    particular, there are a number of EAs with mid-sized or relatively
    large populations that also have relatively high HHIs. Such apparent
    discrepancies may arise partly because the EAs also vary with regard
    to other important determinants of market demand and cost besides
    total population, including factors such as the age distribution of
    the population, per capita income, population density, urbanization,
    and the size and composition of the business sector.[^87] Absent a
    more systematic analysis of the possible relationship between these
    explanatory 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

50. 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.

51. Despite the reduction in the number of national mobile operators
    from six to five as a result of the merger of Cingular and AT&T
    Wireless, as of the end of 2004 the United States still had one or
    two more national operators than most other industrialized countries
    of comparable income levels.[^88] Several Western European
    countries, including the United Kingdom, the Netherlands, and
    Austria, also have five national mobile operators.[^89] In the
    remaining Western European countries, there are generally three or
    four national mobile operators. Some comparable Asian-Pacific
    countries, such as Japan and Australia, also have three or four
    national mobile operators as of the end of 2004.[^90] The principal
    exception is Hong Kong, which has six mobile operators.[^91]

52. While there are a number of large regional and local mobile
    operators in addition to the nationwide mobile operators in the
    United States, competition in Western European mobile markets is
    generally limited to the nationwide mobile operators. 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 areas to fewer than four competitors in some other areas.
    Nevertheless, as previously mentioned 97 percent of the total U.S.
    population live in counties with a minimum of three different mobile
    operators, the same as the maximum number of national mobile
    carriers in most of the smaller Western European markets.

53. Since European regulators awarded nationwide licenses for
    second-generation GSM and third-generation services, national
    boundaries are the relevant geographic market for measuring
    concentration in European mobile markets. For purposes of
    comparison, we computed HHIs based on subscriber shares as of the
    fourth quarter of 2004 for the following seven countries: Finland,
    France, Germany, Italy, the Netherlands, Spain and the United
    Kingdom.[^92] The lowest HHI values are found in the United
    Kingdom (2308) and the Netherlands (2487). Mobile subscribers in the
    United Kingdom are relatively evenly divided among the four GSM
    operators, and a fifth operator, a 3G start-up, launched service
    in 2003. The Netherlands, with five GSM operators, is the only
    European country to have awarded more than four GSM licenses. The
    values of HHI in the remaining countries range from a low of 3196 in
    Germany to a high of 4362 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 carriers in Germany and
    Italy and only three carriers in the remaining countries. Second,
    each market tends to be dominated by the top two competitors, which
    have a combined market share ranging from 76 percent in Germany and
    Spain to 86 percent in Finland.[^93]

54. Recalling that for EAs in the United States the average value of the
    HHIs weighted by EA population is 2450 and that the median value is
    about 2583, it is evident that concentration is somewhat higher in
    the U.S. mobile market on average than in the least concentrated
    European mobile market (the United Kingdom, at 2308), and roughly
    the same as in the second least concentrated European mobile market
    (the Netherlands, at 2487). If we take the top third of EAs by HHI
    values, we find that the European mobile markets with higher
    concentration levels (in other words, with HHIs ranging from 3196
    to 4362) would fall within this top third. At the same time, there
    are 49 EAs, or about 17 percent of the total, 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

55. 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.[^94] 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.[^95] Moreover, it is
    unlikely that competitive harm will result from consolidation among
    service providers licensed to operate in separate geographic
    markets.

56. 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.[^96] 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.[^97]

57. Since the end of 1999, carriers have been building nationwide
    footprints[^98] through various forms of transactions.[^99] One of
    the driving forces behind many of these transactions has been the
    desire of large regional carriers to enhance their ability to
    compete with existing nationwide operators that offer attractive
    nationwide pricing plans.[^100] Also, 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.[^101] More recently, national
    operators have sought to fill in gaps in their coverage areas,[^102]
    as well as to increase the capacity of their existing networks.
    Since the writing of the *Ninth Report*, a number of transactions
    between market participants have been announced. We discuss the
    transactions involving the largest impact, either through the
    exchange of subscribers or spectrum licenses, on the structure of
    the market below.

### Sales and Swaps

58. *Cingular* / *AT&T Wireless* -- On October 26, 2004, Cingular
    Wireless announced that it had completed its acquisition of AT&T
    Wireless, creating a company with more than 46 million
    subscribers.[^103] In addition to a series of spectrum and business
    divestures required by the Commission and the Department of Justice
    for approval,[^104] the merger precipitated a number of changes in
    the relationships between Cingular and its business partners,
    including the unwinding of the Cingular- T-Mobile infrastructure
    sharing agreement,[^105] the right of Cincinnnati Bell Wireless to
    buy Cingular's 19.9 percent interest in the company for \$83
    million,[^106] and the surrender of Cingular's interest in Suncom
    Wireless, Inc. ("Suncom") (formerly Triton PCS)[^107] as part of a
    larger deal to swap spectrum and networks in Virginia, North
    Carolina, and Puerto Rico.[^108]

59. *ALLTEL / Western Wireless* -- On January 10, 2005, ALLTEL announced
    that it had reached an agreement to purchase Western Wireless
    Corporation ("Western Wireless") in a stock-and-cash transaction
    valued at approximately \$6 billion.[^109] ALLTEL would gain about
    1.4 million domestic wireless customers in 19 western and midwestern
    states that are contiguous to existing properties, giving ALLTEL 10
    million domestic wireless customers in 33 states.[^110] With this
    acquistion, ALLTEL would add wireless operations in 9 new states -
    California, Idaho, Minnesota, Montana, Nevada, North Dakota, South
    Dakota, Utah and Wyoming. -- and significantly expand its wireless
    operations in Arizona, Colorado, New Mexico and Texas.[^111] On July
    11, 2005, the Commission approved the company\'s merger with Western
    Wireless,[^112] which included divesting markets in Arkansas, Kansas
    and Nebraska.[^113] The companies completed the merger on August 1,
    2005.[^114]

60. *Sprint / Nextel --* On Dec. 15, 2004, Sprint and Nextel announced
    that they had agreed to "a merger of equals."[^115] Sprint and
    Nextel are being valued equally in the merger and their shareholders
    will each own approximately 50 percent of the new company after the
    merger. [^116] According to the companies, Sprint and Nextel,
    including their affiliates and partners, serve more than 40 million
    wireless subscribers and operate networks that directly cover nearly
    262 million people.[^117] On August 12, 2005, the companies
    completed the merger, after having received regulatory approval from
    the Commission and the DOJ.[^118] The combined entity has begun the
    process of spinning off Sprint's local telecommunications business,
    which has 7.7 million local access lines in 18 states.[^119] The
    merger may also precipitate the purchase of Nextel Partners by the
    combined company.[^120]

61. *Sprint PCS / US Unwired* -- Sprint also recently announced an
    agreement to purchase its affiliate US Unwired Inc. ("US Unwired")
    for approximately \$1.3 billion.[^121] US Unwired provides service
    under the Sprint PCS brand in nine states - Alabama, Arkansas,
    Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee and
    Texas - and serves more than 500,000 subscribers.[^122] As part of
    the agreement, Sprint and US Unwired will seek an immediate stay of
    pending litigation between the two companies, including US
    Unwired\'s request for an injunction to block the merger of Sprint
    and Nextel, with a final resolution to become effective upon the
    closing of the acquisition.[^123]

62. *Verizon Wireless / Nextwave Spectrum* -- On April 13, 2005, Verizon
    Wireless completed the purchase of NextWave Telecom's remaining
    spectrum licenses for \$3.0 billion.[^124] The transaction,
    originally announced in November 2004, involved 10 and 20 MHz
    licenses covering 23 markets around the country, including New York,
    Boston, Washington, D.C., and Los Angeles. Verizon Wireless states
    that this additional spectrum will help the company meet its
    customers' "growing demand for wireless voice and data
    services."[^125]

### Affiliations

63. Three of the nationwide operators also have extended their coverage
    through contractual affiliations with smaller carriers. These
    affiliations create a "family" of operating companies with much
    closer relationships than those formed by traditional roaming
    agreements.[^126] 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.[^127]

64. *Cingular (formerly AT&T* *Wireless)* -- With Cingular Wireless's
    acquisition of AT&T Wireless, the combined company ended its special
    relationship with Suncom, as discussed above, although it did retain
    AT&T Wireless's equity interest in Edge Wireless, LLC
    ("Edge").[^128] Edge markets its service under its own name, but
    describes itself in news releases as "affiliated with Cingular
    Wireless."[^129]

65. *Nextel* -- The Nextel family consists of Nextel and Nextel
    Partners, Inc. ("Nextel Partners"). In 1999, Nextel sold some of its
    SMR licenses to Nextel Partners in exchange for a minority ownership
    interest in the company.[^130] Nextel Partners's iDEN network is
    compatible with Nextel's, and Nextel assists Nextel Partners in
    obtaining terms similar to those Nextel receives from vendors for
    equipment and services.[^131] Both Nextel and Nextel Partners market
    their services under the Nextel brand name. However, the
    Sprint-Nextel merger might trigger certain share purchase rights in
    Nextel's agreement with Nextel Partners,[^132] requiring the
    combined company to buy Nextel Partners.[^133]

66. *Sprint PCS* -- The Sprint PCS family consists of Sprint PCS and 10
    affiliates.[^134] Each of the affiliates has an agreement with
    Sprint PCS to use the latter's PCS licenses to deploy CDMA
    technology and Sprint PCS-branded service in specific areas of the
    country.[^135] In return, Sprint PCS receives a percentage of the
    affiliates' local service revenue.[^136] In addition, Sprint PCS
    performs back-office tasks for its affiliates, giving them the
    benefits of economies of scale for billing and customer
    service.[^137] It is not clear how the merger would affect Sprint's
    relationships with its affiliates. According to one affiliate,
    Sprint's integration with Nextel following the merger would conflict
    with Sprint's obligations to its affiliates, and that affiliate
    claimed that Sprint would attempt to resolve those issues through
    negotiations.[^138] Sprint PCS affiliates provided service to more
    than 3.2 million subscribers by the end of 2004.[^139]

## Entry Conditions and Potential Barriers to Entry 

67. 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.[^140] 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.[^141]

### Spectrum Allocation and Assignment

68. 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.[^142] 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.[^143] 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

69. 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.[^144] This
    information is provided as a basis for understanding the formation
    of the current industry structure.

70. [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.[^145] 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.[^146]

71. [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.[^147] 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).[^148] Two of the 30 megahertz blocks (A and B blocks) are
    assigned on the basis of 51 Major Trading Areas ("MTAs").[^149] One
    of the 30 megahertz blocks (C block) and all three of the 10
    megahertz blocks are assigned on the basis of 493 BTAs.[^150]

72. The most recent broadband PCS auction (Auction No. 58) was completed
    in the past year. On February 15, 2005, the Commission completed the
    auction of 242 broadband PCS licenses comprising CMRS spectrum that
    had been offered previously in other auctions but was returned to
    the Commission as a result of license cancellation or
    termination.[^151] In that auction, 24 bidders won 217 licenses,
    raising (in net high bids) a total of more than \$2.0 billion.

73. [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.[^152] The Commission has since licensed additional SMR
    spectrum through auctions.[^153] 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.[^154] 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,[^155] the
    primary use for SMR traditionally has been trunked dispatch
    services.[^156] 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.[^157]
    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 Nextel 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.[^158] Furthermore, in apparent response to the dispatch
    functionality of SMR services, some cellular and broadband PCS
    carriers have begun to offer push-to-talk functionality on their
    networks, including Verizon Wireless, Sprint PCS, and ALLTEL.[^159]
    SMR spectrum is also used for certain data-only networks.[^160]

74. [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.[^161] 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.[^162] Many licensees
    hold more than one license in a particular market. While no longer
    in operation, the Commission's CMRS spectrum cap molded the current
    distribution of spectrum licenses. Under the spectrum cap, no entity
    could control more than 45 megahertz of cellular, broadband PCS, and
    SMR[^163] spectrum in an MSA, or more than 55 megahertz in an
    RSA.[^164] 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.[^165]

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

75. 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.[^166] 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
    will require 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 will modify 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 will relinquish
    and the actual costs Nextel incurs to relocate all incumbents in the
    800 MHz band. 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

76. 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.[^167] Each license consists of between 20 and
    50 kilohertz.[^168] The Commission first allocated spectrum for
    paging in 1949 and licensed the spectrum on a site-by-site basis
    through the mid-1990s.[^169] In 2000 the Commission began auctioning
    additional paging licenses on a geographic area basis using EAs and
    MEAs.[^170] The Commission completed its third paging auction on May
    28, 2003.[^171]

77. 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.[^172] The Commission
    first auctioned narrowband PCS spectrum in 1994.[^173] Licenses
    consisted of between 50 and 100 kilohertz each and were offered on
    both a nationwide and regional basis.[^174] The Commission completed
    its most recent auctions of narrowband PCS licenses in September
    2003.[^175]

#### 700 MHz Bands

78. 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.[^176] 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.[^177] 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.[^178]

79. 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.[^179] Pursuant to statutory mandate, licenses for
    this spectrum will be assigned through competitive bidding.[^180]
    These bands have many permissible uses: winning bidders may use the
    spectrum for fixed, mobile (including mobile wireless commercial
    services), and broadcast services.[^181] The Commission expects that
    many of the new technologies to be developed and deployed in this
    band will support advanced wireless applications.[^182] However,
    much of the Upper and Lower 700 MHz spectrum is currently encumbered
    by television broadcasters, and may remain so until the end of
    period when broadcasters convert from analog to digital transmission
    systems.[^183] That period is defined by statute.[^184]
    Nevertheless, there may be some portions of these bands that are not
    so encumbered and are available for immediate use by winning
    bidders.

80. The Balanced Budget Act of 1997 and subsequent legislation initially
    directed the Commission to license these reclaimed spectrum bands
    well in advance of the end of the DTV transition period.[^185]
    However, the Auction Reform Act of 2002 eliminated these statutory
    deadlines[^186] and provided the Commission with discretion to
    "determine the timing of and deadlines for the conduct of
    competitive bidding under \[Section 309(j) of the Communications Act
    of 1934, as amended\], including the timing of, and deadlines for,
    qualifying for bidding; conducting auctions; collecting, depositing,
    and reporting revenues; and completing licensing processes and
    assigning licenses."[^187] 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),
    yet it also directed the Commission to proceed with an auction of
    the Lower 700 MHz C and D blocks starting "no earlier than August
    19, 2002, and no later than September 19, 2002."[^188] On September
    18, 2002, the initial auction of Lower 700 MHz C and D block
    licenses (Auction No. 44) closed, raising \$88.7 million in net
    bids.[^189] Subsequent auctions of licenses in these bands (Auction
    Nos. 49 and 60) in 2003 and 2005 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.[^190]

81. As required by the Auction Reform Act, the Commission prepared a
    report announcing when it intends to reschedule the remaining 700
    MHz band auctions, and submitted the report to Congress on June 19,
    2003.[^191]

#### Advanced Wireless Services

82. 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.[^192] 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).[^193] As noted in the *Eighth 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.[^194] 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, and sought comment on service rules for fixed
    and mobile services, including AWS, in these bands.[^195]

83. In November 2003, in WT Docket No. 02-353, the Commission released a
    *Report and Order* adopting service rules for licensed fixed and
    mobile services, including advanced wireless services, for the 90
    megahertz of spectrum at 1710-1755 and 2110-2155 MHz.[^196] These
    service rules include application, licensing, operating and
    technical rules, and competitive bidding provisions. 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 to license this spectrum under the Commission's flexible,
    market-oriented Part 27 rules.[^197] 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
    permits spectrum to be easily aggregated.

84. The Commission also 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 determine to
    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.[^198]

85. The *AWS-2 Service Rules NPRM*, released in September 2004, sought
    comment on issues specific to 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. The *NPRM* also
    sought comment on how best to control in-band and adjacent-band
    interference. Further, the *NPRM* proposed that the Commission
    conduct any auction of this spectrum in conformity with the general
    competitive bidding rules set forth in Part 1 of the Commission's
    rules and that it use the same small business size standards and
    associated bidding credits as adopted for broadband PCS and the
    other 90 megahertz of AWS spectrum.[^199]

#### Broadband Radio Service 

86. 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.[^200] 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).

87. The Commission took several steps to restructure the 2495-2690 MHz
    band and facilitate more efficient use of the spectrum. First, the
    Commission created a new band plan for the 2495-2690 MHz band that
    eliminated the use of interleaved channels by MDS and ITFS licensees
    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. Second, the Commission expanded the original MDS-ITFS
    band by adding to it five megahertz of additional spectrum from
    below 2500 MHz, which will provide room for the future relocation of
    MDS Channels 1 and 2, which are presently located in the 2.1 GHz
    band.

88. 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.

89. Finally, the Commission established a mechanism for transition from
    the existing band configuration to the new band plan. BRS and EBS
    providers will have a three-year period during which they may
    propose transition plans for relocating existing facilities of all
    other licensees within the same Major Economic Area (MEA) to new
    spectrum assignments in the revised band plan. Plan proponents must
    notify all licensees in the MEA and file their plans with the
    Commission. The Commission sought comment on alternative transition
    options for markets in which no transition plan is proposed,
    including offering new licenses at auction and modifying existing
    licenses while offering existing licensees tradable instruments that
    they could use to bid for new licenses.

90. The changes made to the 2495-2690 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

91. There are three other types of entry barriers, each of which
    captures separate dimensions of the difficulty of entering an
    industry.[^201] 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 is the minimum efficient scale
    relative to the size of the market, meaning 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, erecting a staunch entry barrier.

92. All three types of entry barriers have the potential to afford
    incumbent carriers first-mover advantages over latecomers. We
    believe it is probable that the three types of entry barriers are
    high 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, total advertising expenditures
    by the five nationwide operators alone approached \$4 billion in
    2004, though advertising expenditures per subscriber fell in 2004
    after rising from 2001 to 2003.[^202] On the other hand, as noted in
    the *Ninth Report*, CTIA has interpreted the recent subscriber
    growth achieved by non-cellular entrants such as T-Mobile and Nextel
    as evidence that first-mover advantages may no longer be relevant to
    the mobile telephone industry.[^203]

## Rural Markets

### Geographical Comparisons: Urban vs. Rural

93. Since the release of the *Sixth Report,*[^204] the Commission has
    attempted to obtain a better understanding of the state of
    competition below the national level, and particularly in rural
    areas.[^205] The Commission does not have a statutory definition of
    what constitutes a rural area.[^206] 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."[^207] 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.[^208] For this reason, we
    adopt this same definition to analyze service availability in rural
    areas for this report.[^209]

### Rural Competition

94. 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 3.7 mobile
    competitors, while the more densely populated counties have an
    average of 5.5 competitors. The number of competitors in the less
    densely populated counties is unchanged from the *Ninth Report*, but
    the average number of competitors in the more densely populated
    counties has declined 7 percent from 5.9 competitors.[^210]

### Conclusion

95. Based on our rollout analysis and information provided by
    commenters, we conclude that CMRS providers are competing
    effectively in rural areas.[^211] While it appears 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. To the contrary, 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. In addition, data and statements presented by commenters
    on the *Tenth CMRS PN* support the conclusion that there is
    effective competition with respect to CMRS in rural areas.[^212]

# CARRIER CONDUCT IN THE MOBILE TELECOMMUNICATIONS MARKET

96. 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.[^213] 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 behave in a
    friendly manner.

## Price Rivalry

### Developments in Mobile Telephone Pricing Plans

97. 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.[^214] 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.[^215] 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.

98. Since 2003, U.S. providers have stepped up efforts to take on more
    customers through "family plan" packages.[^216] In family plan
    offerings, subscribers sign up for two lines and then have the
    option of adding additional lines at reduced prices. The lines share
    the available minutes on the plan jointly. All the nationwide
    carriers now offer family plans, with the initial two lines usually
    costing at least \$60 a month, and each additional line costing an
    extra \$10 to \$20.[^217] One report explained the attractiveness of
    such plans to carriers: "Family plans were designed to add new
    customers cheaply by encouraging people to give phones to their
    children or older relatives as carriers race to sign up the
    remaining roughly 40 percent of the population that do not already
    have cellphones. These plans tend to bring in less revenue per user
    than single accounts but the hope is that whole families are less
    inclined than individuals to switch to rival services and that
    children will stay loyal to the operator as they get older."[^218]

### Prepaid Service

99. In the United States, most mobile telephone subscribers pay their
    phone bills after they have incurred charges (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.[^219] For these reasons, the
    industry generally has not heavily promoted prepaid offerings in the
    past.[^220] However, the pool of unsubscribed customers qualified
    for postpaid plans[^221] has declined to the point where prepaid
    offerings, which do not require credit checks, seem more attractive
    to carriers.[^222] In response, some carriers have introduced new
    prepaid plans, or entire brands.[^223] 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.[^224] One survey found that 39 percent of teen cell
    phone users use prepaid plans.[^225]

100. The result of these efforts has been a significant rise in the
     percentage of wireless users who subscribe to prepaid plans.
     Analysts estimate the prepaid base to represent between 8 and 11
     percent of U.S. subscribers at the end of 2004,[^226] a substantial
     increase from the figure of 6 percent reported here for the last
     two years.[^227] Among the nationwide carriers, T-Mobile had 11.4
     percent of its subscribers on prepaid plans, Cingular Wireless had
     7 percent, and Verizon Wireless had 5.5 percent.[^228] Nextel
     offers prepaid plans through its subsidiary brand, Boost Mobile;
     Sprint PCS does not offer prepaid plans itself, but partners with
     third-party resellers to market prepaid offerings.[^229]

### Mobile Data Pricing

101. As noted in the *Ninth Report*, handset-based mobile data
     applications such as text messaging, multimedia messaging services,
     ringtones, and games are marketed to consumers primarily as an
     add-on to mobile voice service.[^230] During the past year carriers
     continued to experiment with a mix of different methods for pricing
     such handset-based mobile data services, including pricing based on
     kilobytes consumed, a flat rate for each use or download of an
     application ("pay-as-you-go"), volume discounts on packages or
     bundles of an application, and unlimited use pricing.[^231] Use 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 bundled
     offerings that include various types and combinations of mobile
     data services. As in the past, mobile data pricing continues to be
     characterized by considerable complexity due to the diversity of
     pricing options.[^232]

102. Communications data services such as text messaging, photo
     messaging, and other multimedia messaging services tend to be
     priced in similar ways. All the nationwide carriers allow customers
     to send and receive text messages on a pay-as-you-go basis for a
     flat rate per message sent or received, and in addition they
     typically offer customers the option of purchasing text messaging
     packages for a fee that affords customers a lower unit price per
     message as compared with the flat pay-as-you-go rate.[^233]
     Similarly, Cingular and T-Mobile offer photo messaging on both a
     pay-as-you-go basis and in discounted packages, albeit at higher
     rates per message as compared with text messaging.[^234] Other
     carriers also offer unlimited text messaging or photo messaging for
     a flat monthly fee.[^235] In addition to *a la carte* offerings,
     some carriers include various packages and combinations of text and
     multimedia messaging services as part of a bundled offering with a
     monthly mobile Internet access service plan and other mobile data
     services.[^236]

103. As indicated in the *Ninth Report* carriers have tended to move
     away from kilobyte-based pricing of handset-based mobile data
     applications in favor of other pricing methods.[^237] However, some
     carriers continue to use kilobyte-based pricing for downloadable
     applications such as ringtones, graphics, and games. For example,
     Cingular and Sprint charge customers for the kilobytes consumed to
     download a game or ringtone.[^238] The kilobyte-based charge is on
     top of a one-time fee to download a game or ringtone and use it for
     an unlimited period. Other carriers, such as T-Mobile, typically
     charge just a one-time fee to purchase a ringtone or game.[^239]
     Some carriers offer other pricing options for downloadable
     applications. For example, in addition to a one-time fee for
     unlimited use of a game, Verizon Wireless offers customers the
     option of paying a lower fee for a monthly subscription to the
     game.[^240]

104. Aside from handset-based applications, carriers offer monthly
     mobile Internet access service packages for data users who access
     the Internet through laptops or Personal Digital Assistants
     ("PDAs"). The nationwide carriers continue to price mobile Internet
     access service packages in two principal ways: based on the amount
     of megabytes consumed each month, or unlimited use pricing.[^241]
     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.[^242]

## Non-Price Rivalry

105. Service providers in the mobile telecommunications market also
     compete on non-price characteristics such as coverage, quality of
     service, and ancillary services. Non-price competition is a
     response to consumer preferences and demand. Indicators of
     non-price rivalry include advertising and marketing, capital
     expenditures, technology deployment and upgrades, and the provision
     of ancillary services.

### Technology Deployment and Upgrades

#### Overview

106. 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.[^243]
     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.

107. 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.[^244] 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.[^245] 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."[^246] The pressure to fill their
     networks may lead carriers to enact price cuts and handset
     subsidies.[^247] 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.

108. 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

109. 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.[^248] 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.[^249]

110. 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").[^250]
     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 intend to phase out TDMA in
     the foreseeable future; however, we recognize that TDMA as
     currently deployed will continue to be used by millions of
     subscribers for a number of years.[^251]

111. Beyond the 2G digital technologies, mobile telephone carriers have
     been deploying next-generation network technologies[^252] that
     allow them to offer mobile data services at higher data transfer
     speeds and, in some cases, to increase voice capacity.[^253] 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.[^254] 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.[^255] 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.[^256]

112. 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.[^257] 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.[^258] The more advanced technologies
     on the CDMA migration path are backwards compatible, whereas WCDMA
     is incompatible with GSM and TDMA.[^259]

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

113. Of the five nationwide mobile telephone operators, Cingular, and
     T-Mobile use TDMA/GSM as their 2G digital technology, Sprint PCS
     and Verizon Wireless use CDMA, and Nextel uses iDEN.[^260] All five
     nationwide mobile carriers, together with other U.S. mobile
     carriers, have continued to deploy next-generation network
     technologies over the past year.

114. Verizon Wireless has deployed 1xRTT technology throughout
     "virtually all" of its network.[^261] In addition, since October
     2003, Verizon has launched EV-DO technology in 31 major U.S.
     cities, covering over 75 million people.[^262] 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.[^263] 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's 1xRTT network because the more advanced
     technologies on the CDMA migration path are backwards
     compatible.[^264] Verizon plans to expand its EV-DO coverage to a
     total of 150 million people by the end of 2005.[^265] Verizon
     reports that its EV-DO delivers average user speeds of 400-700
     kbps.[^266] Other notable EV-DO deployments include launches by
     Alltel in Akron and Cleveland, OH, and by Midwest Wireless in
     Olmsted County, MN.[^267]

115. Sprint, the other nationwide CDMA carrier, has deployed 1xRTT
     across its entire network footprint and began rolling out EV-DO
     technology in July 2005.[^268] Sprint initially deployed its EV-DO
     network to business districts and major airports in 34 U.S. cities.
     The company plans to expand its EV-DO network to 143 million people
     by the end of 2005, and to offer EV-DO-based services on a variety
     of devices in 60 metropolitan areas by early 2006.[^269] As
     discussed in the *Ninth Report*, the company announced in June 2004
     its plans to deploy EV-DO technology over its network during 2005,
     rather than wait for 1xEV-DV technology to become commercially
     available.[^270] Sprint's change in strategy with regard to
     deployment of technologies on the CDMA migration path can be seen
     as a competitive response to Verizon's EV-DO offering, and thus
     provides a clear-cut example of intense non-price rivalry.[^271]

116. Prior to its merger with Cingular in October 2004, AT&T Wireless
     had deployed EDGE technology across its entire GSM/GPRS network
     footprint, covering approximately 215 million people.[^272] AT&T
     Wireless had also launched UMTS (or WCDMA) networks in six U.S.
     cities: Seattle, San Francisco, Phoenix, Detroit, San Diego, and
     Dallas.[^273] After the completion of its acquisition of AT&T
     Wireless, Cingular incorporated the former AT&T Wireless
     GSM/GPRS/EDGE and UMTS networks into its GSM/GPRS network
     footprint.[^274] In addition, Cingular announced in November 2004
     that it plans to deploy UMTS with HSDPA technology in 15-20 major
     U.S. markets by the end of 2005.[^275] It has been reported that
     this upgrade as an effort to compete with Verizon Wireless's EV-DO
     network, which offers speeds similar to or slightly below HSDPA and
     faster than UMTS.[^276]

#### Coverage by Technology Type

117. To date, 285 million people, or 99.8 percent of the total U.S.
     population, 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.[^277] These counties make up 89 percent of the total
     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.[^278] We have also prepared maps showing the extent of
     next generation network technology deployment.[^279]

118. CDMA has been launched in at least some portion of counties
     containing 280 million people, or roughly 98 percent of the U.S.
     population, while TDMA/GSM has been launched in at least some
     portion of counties containing 278 million people, or 97 percent of
     the U.S. population.[^280] To date, digital SMR operators have
     launched iDEN-based service in at least some portion of counties
     containing over 262 million people, or approximately 92 percent of
     the U.S. population.[^281]

119. CDMA 1xRTT and/or 1xEVDO has been launched in at least some portion
     of counties containing 278 million people, or roughly 97 percent of
     the U.S. population, while GPRS, EDGE, and/or UMTS has been
     launched in at least some portion of counties containing 267
     million people, or about 94 percent of the U.S. population.[^282]

#### Data-Only Networks and Technology Deployment

120. 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.

121. As mentioned above, since August 2004, Clearwire has launched
     mobile broadband service in twelve U.S. cities and plans to roll
     out service to four additional markets in the near future.[^283] To
     offer the service, Clearwire is using OFDM technology developed and
     manufactured by its equipment subsidiary, NextNet Wireless, and
     spectrum in the 2.5 GHz BRS/EBS band. 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.[^284] Using OFDM
     technology, Clearwire has eliminated the need for customers to
     attach an antenna to their rooftop, as is required for most fixed
     broadband services, and instead allows its subscribers to access
     the Internet with "plug-and-play" modem devices connected to a
     personal or laptop computer at downstream speeds ranging from 512
     kbps to 1.5 Mbps.[^285] Customers can transport these devices to
     other locations where a network signal is available and in some
     cases use them while traveling at high speeds.[^286] OFDM-based
     wireless broadband services also typically eliminate the need for a
     carrier to send technicians to install equipment at the end user's
     house or building.

122. In October 2004, Clearwire announced a partnership with Intel in
     which Clearwire will deploy equipment based on the 802.16 WiMax
     standard, of which Intel has been a major proponent and
     developer.[^287] WiMax equipment also uses OFDM technology;
     however, because the equipment will be standardized, it will be
     interoperable across networks and is expected to be less expensive
     than proprietary standards.[^288] Once the 802.16e standard has
     been finalized, NextNet plans to manufacture end-user equipment
     that will include 802.16e chipsets manufactured by Intel. The
     802.16e version of WiMax will allow wireless broadband services to
     be offered on a wide-area mobile, rather than a fixed, basis.[^289]

123. As mentioned in the *Ninth Report*, Nextel launched a trial
     wireless broadband service in the Raleigh-Durham, N.C. market in
     February 2004 and began offering the service on a commercial basis
     in April 2004.[^290] The service used Flash-OFDM (orthogonal
     frequency division multiplexing) technology developed by Flarion
     Technologies to provide typical download speeds of 950 kbps to 1.5
     Mbps, with burst rates of up to 3.0 Mbps.[^291] Customers could
     purchase either a wireless modem for a personal computer or a
     wireless modem card to use with a laptop computer. In February
     2005, however, shortly after announcing its proposed merger with
     Sprint, Nextel stated that it would end its Flarion service in
     Raleigh in June 2005. In January 2005, Sprint joined the WiMAX
     Forum, and analysts speculate that the new, merged company will use
     its BRS spectrum to deploy WiMAX instead of or in addition to
     Flash-OFDM technology.[^292]

124. Among the narrowband data-only providers, several carriers use
     paging spectrum to operate networks that offer traditional one-way
     paging services.[^293] 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.[^294] USA Mobility, the largest U.S. paging company
     formed from the merger of Metrocall and WebLink Wireless in
     November 2004, offers both traditional paging services and two-way
     messaging services. The company's narrowband PCS network uses
     ReFLEX technology developed by Motorola and covers 90 percent of
     the U.S. population.[^295]

125. Two other carriers, Cingular Wireless and Motient Corp.
     ("Motient"), operate two-way data networks using the 900 MHz SMR
     and 800 MHz SMR spectrum bands, respectively. Cingular Wireless's
     network, known as the Mobitex, is a packet-switched radio
     technology that provides always-on, two-way messaging and data
     delivery and covers 93 percent of the urban business population in
     the U.S.[^296] The Motient (formerly ARDIS) 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.[^297] These
     networks have provided a variety of mobile data services to
     personal digital assistants ("PDAs") and other handheld devices,
     including Blackberry devices made by Research in Motion (RIM).
     However, over the past year, RIM discontinued the production of the
     non-voice Blackberry devices that operate on these networks.[^298]

126. As discussed in the *Ninth Report*, Space Data is using narrowband
     PCS spectrum in the 900 MHz band and balloon-borne platforms,
     called SkySitesTM, to roll out a commercial telemetry
     service.[^299] Although national weather services have been using
     balloon systems to transmit atmospheric data to ground-based
     weather stations for decades, Space Data is the first to make
     commercial use of this platform.[^300] In April 2004, Space Data
     launched its network in West Texas to provide wireless telemetry
     services to oil and gas companies, and has since expanded its
     network to cover all of Texas, Louisiana, and Oklahoma, as well as
     portions of New Mexico, Arizona, California, and the Gulf of
     Mexico.[^301]

### Capital Expenditures

127. 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.[^302] 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).[^303] One
     analyst estimated that the wireless industry spent roughly \$22
     billion on capex in 2004, an increase of 12 percent from the \$19
     billion spent in 2003, reversing a two-year trend of declining
     wireless capex.[^304] 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.[^305]

### Roaming

128. 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.[^306] This source of
     revenue is particularly important to many rural and smaller
     carriers.[^307] However, roaming revenues are under pressure as
     roaming rates have declined and nationwide carriers continue to
     expand into smaller communities.[^308]

129. CTIA reported that roaming revenues for the mobile telephone
     industry increased over the past year, from \$3.8 billion in 2003
     to \$4.2 billion in 2004, reversing the trend of the last few
     years.[^309] However, the contribution of roaming revenues to total
     service revenues continued its decline, from 4.3 percent reported
     in 2003 to 4.1 percent in 2004, and down from over 10 percent five
     years ago.[^310]

### Advertising and Marketing

130. 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,"[^311] and in general, advertising for an
     experience good tends to be persuasive rather than informational in
     nature.

131. As a group, the five nationwide operators spent a total of \$3.9
     billion on advertising in 2004, up 9 percent from 2003, and up 24
     percent from 2002.[^312] Advertising expenditures - including
     television, radio, newspaper, magazine, and outdoor spending - were
     roughly 4.5 percent of wireless service revenues. [^313] The \$3.9
     billion figure places wireless services among the highest-spending
     industry groups.[^314] The top three network TV advertisers in 2004
     were Sprint PCS, Verizon Wireless, and Cingular, ahead of
     McDonald's, Wendy's and Burger King.[^315] Advertising expenditures
     per subscriber fell in 2004, which one analyst attributes to the
     growth of the wireless subscriber base.[^316]

### Quality of Service

132. As U.S. mobile penetration moves closer to the saturation point,
     competitive pressure to attract new customers and retain existing
     customers has resulted in concerted efforts by carriers to improve
     service quality.[^317] As in years past, network investment remains
     a key element of carriers' strategies for improving service
     quality. 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.[^318] 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.[^319] In addition, 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.[^320] Some carriers have also used devices
     that amplify cellular signals, called repeaters, to improve indoor
     coverage in office buildings, shopping malls, and convention
     centers.[^321]

133. Carriers can increase capacity and thereby improve service quality
     not only by investing in their networks, but also 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. Cingular's
     acquisition of AT&T Wireless is a key example of this strategy. The
     two carriers argued that by combining their spectrum holdings and
     network infrastructure, the merged company would achieve an
     increase in capacity that would enable it to offer service with
     better voice and data quality, fewer dropped calls, and lower
     blocking rates, especially during peak call hours.[^322] However,
     while Cingular continues to maintain that the merger will
     ultimately improve coverage, it has emphasized that the promised
     benefits will not be fully realized until the integration of the
     two carriers' networks is completed in June 2006.[^323]

134. In addition to investing in network infrastructure and spectrum,
     carriers continue to pursue marketing strategies designed to
     differentiate their service from rival offerings with regard to
     consumer perceptions of service quality. Previous reports cited
     Verizon Wireless's "Can You Hear Me Now?" advertising campaign as
     an example of an attempt at such brand differentiation based on
     superior network coverage, reliability and voice quality.[^324]
     Analysts continue to single out Verizon Wireless as being mainly
     differentiated from its rivals by its network quality.[^325] A
     recent survey of wireless subscribers found that 40 percent of
     Verizon Wireless customers indicated that network quality was their
     main reason for choosing Verizon.[^326] 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.[^327]

135. T-Mobile introduced a new strategy for differentiating its service
     with regard to network quality in the past year. T-Mobile is the
     first national carrier to add 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.[^328] 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.[^329] 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."[^330] 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. [^331] Most
     carriers do not provide details about the quality of service in
     specific neighborhoods except when customers request such
     information from sales representatives.[^332]

136. According to analysts, by providing potential customers with more
     accurate information and assurances about service quality, the new
     tool may help T-Mobile differentiate its service from those of its
     rivals.[^333] In addition, it may enable T-Mobile to reduce churn
     and customer complaints by discouraging customers who live or work
     in areas with poor reception from signing up. T-Mobile's innovation
     may also put competitive pressure on other carriers to provide
     additional information about possible geographic variations in the
     quality of their network coverage. For example, Cingular offers an
     interactive mapping tool in its stores that enables customers to
     estimate the likelihood of coverage inside a building or a vehicle
     at a specific location, and the company has indicated that it
     intends to add the service to its Web site later in 2005.[^334]

137. Carriers are also actively competing to attract and retain
     customers based on other dimensions of customer service. An example
     is cellphone repair and replacement. Sprint is rolling out an
     in-store repair service for customers who need to get their
     cellphones fixed.[^335] Sprint planned to have repair shops in more
     than half of its 800 retail locations across the country by the
     middle of March 2005.[^336] Some rival carriers, including Cingular
     Wireless and T-Mobile, have decided not to provide repair services
     in their stores, but instead let customers with malfunctioning
     cellphones call a toll-free number and have a replacement phone
     sent to them overnight.[^337]

138. 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.[^338]

### Mobile Data Services and Applications

139. 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.[^339] 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, and entertainment applications such as
     ringtones and games. A second market segment consists of monthly
     mobile Internet access service 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").

140. In the past year carriers have continued to expand and enhance
     their mobile data offerings. An example is the continued rollout of
     television services on cellphones. As discussed in the *Ninth
     Report*, Sprint PCS was the first U.S. mobile carrier to offer a
     live video programming service for mobile phones called
     MobiTV.[^340] The service is powered onto cellphones by a
     privately-held California 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.[^341] The service
     enables mobile subscribers to watch real-time news, sports, and
     entertainment programming and other video content from a variety of
     cable television channels. As with earlier applications, the
     introduction of a new data service by one carrier has prompted
     other carriers to begin offering competing services. For example,
     MobiTV was launched on AT&T Wireless's mMode data service in late
     2004, prior to the company's acquisition by Cingular, and in early
     2005 Cingular also began offering MobiTV through its Media Net
     service.[^342] Like Sprint, Cingular offers the service for a fixed
     monthly fee as an add-on to voice service. Sprint has also improved
     its wireless TV service by adding new channels to its roster of
     live television programming and by offering a second type of
     service, called Sprint TV, which provides specially produced short
     clips from major networks.[^343]

141. Verizon Wireless has extended the range of services provided over
     its EV-DO network to include video on demand and other multimedia
     services. When it began commercial operation in late 2003, the
     EV-DO network was used to provide Verizon's BroadbandAccess
     wireless Internet access service for business customers and other
     heavy data users, and could be accessed only via a special modem
     card inserted into a laptop computer.[^344] In early 2005, Verizon
     Wireless introduced 3G handsets that can access the EV-DO network
     and launched VCAST, the country's first wireless multimedia service
     to be provided over a next-generation network using EV-DO
     technology.[^345] VCAST customers can use the new 3G handsets to
     access the EV-DO network for a wide range of content, including
     news programming and short, made-for-mobile episodes of TV
     programs. For a fixed monthly fee on top of what they pay for their
     regular Verizon calling plan, VCAST customers get unlimited access
     to Verizon's basic video news clips service and unlimited browsing
     of Verizon's "Mobile Web" news and information service. Premium
     content is available for an additional cost, including 3-D games,
     music videos, and other premium channels.

142. Verizon Wireless is hoping to leverage the high-speed capability of
     EV-DO technology in an effort to differentiate its wireless
     Internet access service and multimedia service from rival
     offerings. With speeds that are three to five times as fast as the
     typical speeds available over cellphone networks using older
     technologies, Verizon's EV-DO network enables laptop users to
     download files, play streaming video and audio, and receive e-mails
     at speeds that are comparable to what many users get from fixed
     broadband connections such as DSL.[^346] Similarly, compared to
     rival offerings based on slower network technologies, the EV-DO
     capabilities of Verizon's new 3G phones make viewing streaming
     video and downloading various other applications on cellphones feel
     more like a broadband experience on a personal computer.[^347] As
     noted in the *Ninth Report*, the slow speeds offered by earlier
     wireless network technologies adversely affect the viewing quality
     of video streamed onto cellphones by reducing the rate at which
     frames are shown.[^348]

143. Although Verizon has taken the lead with regard to the deployment
     of a broadband wireless data network, Sprint PCS continues to be
     the market leader in pre-broadband consumer wireless data as
     measured by the contribution of data to overall ARPU.[^349] In the
     first quarter of 2005, data accounted for 9.8 percent of Sprint's
     ARPU, followed by T-Mobile (7.6 percent), Cingular (7.5 percent),
     Verizon Wireless (6.3 percent), and Nextel (4.5 percent).[^350] One
     reason the contribution of data to Sprint's overall ARPU is
     comparatively high appears to be that a relatively large share of
     Sprint's total customer base use data services. Sprint reported
     nearly 7.7 million direct wireless data subscribers, or about 43
     percent of its total direct customers, at the end of the fourth
     quarter of 2004, including 6.2 million Vision subscribers.[^351] In
     comparison, both Cingular and Verizon Wireless have reported that
     more than a third of their customers are data users.[^352]

144. Another important development is the move to extend inter-carrier
     operability to multimedia messaging services such as photo and
     video messaging. As noted in the *Ninth Report*, the introduction
     and progressive implementation of inter-carrier operability of SMS
     has been credited with stimulating the growth of text messaging in
     the U.S. mobile market.[^353] As with SMS prior to the introduction
     of inter-carrier operability, initially U.S. mobile subscribers
     were capable of exchanging photo and video messages only with
     subscribers on the same carrier's network. In October 2004, CTIA
     announced that wireless carriers have reached an agreement to
     provide consumers with MMS interoperability so that subscribers on
     different networks can exchange such multimedia messages.[^354] To
     this end, an industry working group, called the Inter-Carrier MMS
     Working Group, established a set of guidelines designed to allow
     wireless carriers to phase-in interoperability of photo and video
     messaging services over time. The working group began meeting in
     May 2004 with the goal of identifying a common set of features that
     could be supported by all participating carriers. Verizon Wireless
     has already signed interoperability agreements with select wireless
     carriers, including Cingular Wireless, U.S. Cellular, and Leap
     Wireless, thereby allowing customers with cameraphones to send
     photos, video clips, and audio files to subscribers on another
     carrier's network.[^355] Verizon Wireless believes that such
     inter-carrier agreements will encourage the growth of picture
     messaging in the same way that inter-carrier text messaging spurred
     the growth of SMS.

# CONSUMER BEHAVIOR IN THE MOBILE TELECOMMUNICATIONS MARKET

145. A mobile carrier can exercise market power only to the extent that
     mobile subscribers do not respond to price increases or other
     adverse competitive effects. 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

146. 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.[^356] These
     sources continue to update consumers on the wireless service
     options available to them. For example, the February 2005 issue of
     *Consumer Reports* magazine published the results of a new customer
     satisfaction survey on mobile telephone service.[^357]

147. 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*.[^358] As noted above in Section IV.B.5, a
     more recent 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

148. 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.

149. Most carriers report churn rates between 1.5 percent and 3.0
     percent per month,[^359] showing a slight decline over the past
     year.[^360] However, this level still creates significant
     challenges for the industry. One analyst wrote, "Monthly churn
     rates are so high that gross adds have been running about three
     times higher than net adds. In other words, for every three new
     customers the national carriers bring in, they are losing two, on
     average."[^361] Another analyst described churn as "the problem of
     this industry, wiping out 20% of the industry revenue."[^362]
     Consistent with findings in previous reports,[^363] customers cite
     service pricing and network quality as the main reasons for
     changing providers.[^364]

### Local Number Portability

150. 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.[^365] 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.[^366]
     CMRS carriers outside of the top 100 MSAs were required to be
     LNP-capable by May 24, 2004.[^367]

151. Wireless number porting activity since the advent of porting has
     been significant. Overall, approximately 11.3 million wireless
     subscribers ported their numbers to another wireless carrier from
     December 2003 through April 2005.[^368] Monthly rates of intramodal
     porting activity remained fairly steady during this period, with
     713,000 ports in January 2004 and 735,000 in April 2005.[^369]
     Monthly levels of intermodal porting from wireline carriers to CMRS
     carriers significantly increased over 2004, from an average rate of
     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, suggesting an increase in the extent of intermodal
     competition.[^370] Intermodal porting from wireless to wireline
     carriers, however, remained steady at 1000-2000 ports per
     month.[^371]

152. 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 an impact on service quality by inducing
     carriers to engage in aggressive customer retention efforts.[^372]
     In light of the steady rates of intra-modal porting from December
     of 2003 to October of 2004, and the slight decline in churn during
     2004, we again conclude that porting has not caused churn to
     significantly increase, but is likely contributing to additional
     quality measures being taken by carriers to retain customers.[^373]

# MOBILE TELECOMMUNICATIONS MARKET PERFORMANCE

153. 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.

154. Equity analysts and other industry observers continue to describe
     wireless price competition in the United States as intense, so much
     so that one analyst said, "even a carrier with large market share
     in an area has very little pricing power."[^374] 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.[^375] 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 over 65 percent in the past four years alone.[^376]

155. Two indicators of mobile telephone pricing show that the long-term
     decline in the cost of mobile telephone services continued through
     2004.[^377] One study of mobile telephone pricing shows a slight
     increase in the cost of mobile telephone services in 2004.

156. According to one economic research and consulting firm, Econ One,
     mobile telephone prices in the 25 largest U.S. cities increased 1.8
     percent in 2004.[^378] The average cost of monthly service[^379] --
     which was calculated across four typical usage plans (200, 500, 800
     and 1100 minutes) -- increased from \$43.37 in January 2004 to
     \$44.13 in January 2005.[^380]

157. 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").[^381] Cellular CPI data is published on a
     national basis only.[^382] From 2003 to 2004, the annual Cellular
     CPI decreased by about 1.0 percent while the overall CPI increased
     by 2.7 percent. The Cellular CPI has declined 34 percent since
     December 1997, when BLS began tracking it.[^383]

158. As a third pricing indicator, some analysts believe average revenue
     per minute ("RPM") is a good proxy for mobile pricing.[^384] This
     is calculated by dividing a carrier's estimate of ARPU by its
     estimate of MOUs, yielding the revenue per minute that the carrier
     is receiving.[^385] Using its estimates of industry-wide ARPU and
     MOUs, CTIA's survey indicates that RPM fell 12 percent between
     December 2003 and December 2004. In the ten years since 1994, RPM
     has fallen from \$0.47 in December 1994 to \$0.09 in December 2004,
     a decline of 82 percent.[^386]

### Average Revenue Per Unit

159. One financial metric widely used in analyzing the mobile telephone
     sector is average monthly revenue per subscriber (often referred to
     as average revenue per unit, or "ARPU"). CTIA's estimate of ARPU
     decreased almost continuously between December 1988 and December
     1998, when it reached a low of \$39.43.[^387] However, since 1999,
     ARPU has been increasing, rising to \$50.64 in December 2004, a 28
     percent increase from the low of six years ago, but only a 1.5
     percent rise from \$49.49 in December 2003. This trend has
     continued even though per-minute prices declined throughout this
     period.[^388] The recent ARPU increases may be due to a variety of
     factors, including the demand-stimulating effect of falling
     per-minute prices. In particular, if demand for mobile telephone
     service is elastic, increased usage will be sufficient to offset
     per-minute price declines, causing ARPU to rise in response to a
     drop in price.[^389] Another possible factor is the adoption by
     wireless consumers of higher-priced calling plans.[^390] Rising
     ARPU may also be due to increased use of data services by wireless
     subscribers.[^391] As stated above, in the first quarter of 2005,
     data accounted for 9.8 percent of Sprint's ARPU, followed by
     T-Mobile (7.6 percent), Cingular (7.5 percent), Verizon Wireless
     (6.3 percent), and Nextel (4.5 percent).[^392]

## Quantity of Services Purchased

### Subscriber Growth

#### Mobile Telephony

160. 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,[^393] tracks phone number usage
     information for the United States.[^394] 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.[^395] In previous
     years, for purposes of this report, the Commission had relied on
     national subscribership data from a highly-respected survey
     conducted by CTIA.[^396] While the Commission, for purposes of this
     report, now uses NRUF data as the basis for its estimate of mobile
     telephone subscribership, we continue to report the CTIA data as
     well for the purpose of comparison.[^397]

161. As of December 2004, we estimate that there were 184.7 million
     mobile telephone subscribers,[^398] up from 160.6 million at the
     end of 2003, which translates into a nationwide penetration rate of
     62 percent.[^399] This addition of 24.1 million subscribers was a
     28 percent increase from the 18.8 million added in 2003, and an 80
     percent increase over the 13.3 million added in 2002.[^400] In the
     last three years alone, the total mobile telephone subscriber base
     has increased 30 percent.

162. CTIA's estimate for year-end 2004 was 182.1 million subscribers, a
     15 percent increase over its estimate of 158.7 million subscribers
     as of year-end 2003.[^401] These additions show similar surging
     subscriber growth, and the 2004 survey's increase of 23.4 million
     subscribers ties its previous high in 2000.[^402]

163. According to a number of analysts, the main drivers of this high
     subscriber growth are the attractiveness of innovative service
     models such as prepaid and family plans - which target previously
     underserved markets such as youth, immigrants, and the
     credit-challenged - as well as wireless substitution.[^403]

164. Digital subscribers made up approximately 97 percent of all
     wireless subscribers at the end of 2004, [^404] leaving
     approximately 7 million analog-only mobile telephone
     subscribers.[^405]

#### Mobile Data

165. The number of mobile data users appears to be rising both
     absolutely and as a percentage of the mobile telephone subscriber
     base. The *Ninth Report* cited one estimate that almost 25 percent
     of U.S. mobile subscribers can be considered casual data users,
     most of whom use SMS and some of whom use picture mail, download
     ring tones or do simple web surfing.[^406] Based on figures
     reported by some of the nationwide carriers, it appears that the
     percentage of mobile telephone subscribers who use mobile data
     services has increased significantly in the past year. As noted
     previously in Section IV.B.6 on mobile data services, Cingular and
     Verizon have reported that about a third of their customers are
     mobile data users, while the number of data subscribers reported by
     Sprint in the fourth quarter of 2004 indicates that slightly more
     than 40 percent of its customers are mobile data users.[^407] In
     addition, a recent survey by Yankee Group of 5,200 adults found
     that 33 percent of Americans between 25 and 34 text-message
     regularly, up from 24 percent in 2004.[^408] Mobile data services
     are particularly popular among teenagers and young adults.
     According to the same Yankee Group survey, the rate of text
     messaging by people between the ages of 35 and 44 remained at about
     25 percent in both years, while usage by people ranging in age from
     18 to 24 grew to 62 percent from 52 percent in the same
     period.[^409]

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 8.5 million paging units in
     service as of the end of 2004, down 24 percent from 11.2 million
     units at the end of 2003, and down 40 percent from 14.1 million
     units at the end of 2002.[^410]

#### 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 892,000 at the
     end of 2004, up from the estimate of 885,000 subscribers cited in
     the *Ninth Report*.[^411]

### 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 2004, to 680 minutes,
     or more than 11 hours of use, for the average subscriber of a
     nationwide operator in the last quarter of the year.[^412] This is
     an increase of 80 MOUs, or more than one hour of additional use,
     from a year earlier.[^413] Sprint PCS, the nationwide operator with
     the highest MOUs, averaged just under 1,000 MOUs per month per
     subscriber.[^414] According to CTIA, MOUs averaged 584 between June
     and December 2004, an increase of 15 percent from the average of
     507 MOUs reported during the same period in 2003, and an increase
     of 37 percent from an average of 427 MOUs from the same period in
     2002.[^415]

169. Increasing MOUs are a result of the demand-stimulating effect of
     falling prices and the wider acceptance of and reliance upon
     wireless service.[^416] One analyst attributed increasing MOUs to
     "increasing adoption of the wireless handset as the primary means
     of voice communications."[^417]

### 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. CTIA
     estimates that SMS traffic volume grew to 4.66 billion per month in
     December 2004, more than double the 2 billion messages per month
     reported in December 2003.[^418] 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
     2004 was 24.7 billion messages.[^419]

171. While text messaging continues to be the most widely used messaging
     service, the volume of photo messaging and other multimedia
     messaging services is also growing. Cingular reported that 30
     million multimedia messages were sent or received by its customers
     in the first quarter of 2005, as compared with four billion text
     messages.[^420] Verizon's customers sent 41.4 million multimedia
     messages and 3.6 billion text messages during the same
     period.[^421]

172. Entertainment applications such as ringtones and games also
     continued to grow in popularity. It is estimated that about 250
     million ringtones were downloaded by U.S. cellphone users in
     2004.[^422] Cingular reported 50 million premium content downloads
     by its customers in the first quarter of 2005, and Verizon Wireless
     reported 34.1 million content downloads in the same period.[^423]

173. The results of an online market research survey designed to assess
     current usage of mobile data services are broadly consistent with
     the picture emerging from the aggregate data on mobile data usage
     cited above.[^424] Online interviews were conducted with 1000 young
     consumers ranging in age from 13 to 34 in March 2005. Respondents
     were asked to estimate how often they used certain wireless phone
     features or applications in the past month. Text messaging was the
     most commonly used service, with 49 percent of the respondents
     using text messaging at least once in the previous month. Taking a
     photo with a phone was the next most popular service, garnering 30
     percent usage in the previous month. Instant messaging was the
     third most popular service, at 20 percent usage, followed by web
     browsing (19 percent), photo messaging (19 percent), downloading
     ringtones (19 percent), using email (16 percent), receiving traffic
     or news alerts (13 percent), downloading a game to be played (12
     percent), taking a video with a phone (10 percent), and video
     messaging (8 percent).

### Sub-National Penetration Rates

174. 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.[^425] 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.[^426] 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.[^427] 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.[^428] 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).[^429]

175. Regional penetration rates for the 172 EAs covering the 50 United
     States, sorted by EA population density, can be seen in Appendix A,
     Table 3.[^430] The rates range from a high of 80 percent in the
     Atlanta, GA-AL-NC EA (EA 40) to a low of 37 percent in the San
     Angelo, TX EA (EA 129). 151 EAs (half as many more than in 2003),
     with a combined population of 271 million, have penetration rates
     of over 50 percent. Sixteen EAs, with a combined population of 60
     million, have penetration rates of over 70 percent (there were none
     in 2003) . The Anchorage, AK EA (EA 171), with the lowest
     population density, had a penetration rate of 51 percent, while the
     Tampa-St. Petersburg-Clearwater, FL EA (EA 34), with the highest
     density, had a penetration rate of 72 percent. As previously
     stated, based on an analysis of NRUF data, the national penetration
     rate is 62 percent.

## Quality of Service

176. To evaluate the quality of service, this section summarizes the
     results of relevant consumer satisfaction 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 service is
     an experience good, and therefore the quality of the 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."[^431] Third, consumer perceptions
     can change independently of actual changes in network performance
     as their expectations evolve.

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 websites. 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.[^432]
     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. According to the J.D. Power and Associates 2004 U.S. Wireless
     Regional Customer Satisfaction Index Study ("Wireless CSI Study"),
     overall satisfaction with wireless service providers has increased
     five percent over 2003, the first time a significant increase has
     been achieved on a year-to-year basis in three years.[^433] The
     Wireless CSI 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). The study also ranks carriers across six
     regions in the United States. The 2004 Wireless CSI Study is based
     on responses from 21,700 households.

179. J.D. Power and Associates interprets the results of the 2004
     Wireless CSI Study as evidence that "carriers may be finally
     catching up with customer expectations, particularly in areas where
     the industry has been concentrating most of its financial
     resources."[^434] For example, the area of call quality received
     the largest reported increase in satisfaction ratings over 2003 - a
     7 percent increase - with coverage attributes such as "making calls
     outside the local calling area" and "geographic size of local
     calling area" experiencing the largest positive changes.[^435]
     Satisfaction with the cost of service also rose significantly,
     mainly due to a strong increase in "fairness in roaming
     charges."[^436]

180. A more recent J.D. Power and Associates survey, this one focusing
     specifically on call quality, also shows an improvement in service
     quality in the past year.[^437] According to the J.D. Power and
     Associates 2005 Wireless Call Quality Performance Study,[^438] the
     average number of initial connection problems dropped 50 percent
     compared to 2004, despite an increase in wireless calling volume.
     In particular, the study found that three out of every 100 calls
     includes at least one call quality problem with the initial
     connection, down from six out of 100 in 2004. The senior director
     of wireless services at J.D. Power and Associates credits
     competition with the improvement: "With an increasingly competitive
     environment and an increase in calling volumes, carriers that offer
     superior network quality will improve their likelihood of
     attracting new customers and will retain more of their existing
     base."[^439] However, the study also found that wireless call
     quality depends on geography, with customers who live in non-metro
     areas typically reporting significantly higher call quality problem
     rates than those who live in metro areas.[^440] By way of
     explanation, J.D. Powers and Associates note that "coverage is
     typically more robust in high population areas due to the close
     proximity of cell towers."[^441]

181. According to a USA Today/CNN/Gallup Poll conducted in March 2005,
     83 percent of cellphone owners said they were "very satisfied" or
     "somewhat satisfied."[^442] This finding compares favorably with
     the customer satisfaction rates found by earlier surveys of mobile
     phone service customers that were cited in the *Ninth Report* and
     previous reports.[^443] Like the J.D. Power and Associates survey,
     however, the USA Today/CNN/Gallup Poll results indicate that
     cellphone users continue to experience problems. In particular,
     nearly half of the respondents consider dropped calls a major or
     minor issue, and 42 percent feel the same way about confusing
     bills.[^444] In addition, 59 percent of respondents think service
     contracts that lock in for a period of time are a major or minor
     problem, and 53 percent feel that the cost of service is a major or
     minor problem.

182. Another view of service quality comes from an annual cellphone
     service customer satisfaction survey conducted in September 2004 by
     Consumer Reports magazine of some 39,000 subscribers to its Web
     site (ConsumerReports.org).[^445] In contrast to the marked
     improvement in the J.D. Power and Associates customer satisfaction
     index from 2003 to 2004, the Consumer Reports survey found that the
     overall satisfaction index has changed by only one point in the
     past three years, from 65 to 66. Moreover, in contrast to the 83
     percent customer satisfaction rate found by the USA
     Today/CNN/Gallup Poll, only 45 percent of respondents to the
     Consumer Reports survey said they were completely satisfied or very
     satisfied with their cellphone service. This gives cellphone
     service a lower level of overall customer satisfaction than most
     other services the magazine measures, including hotels (67
     percent), supermarkets (67 percent), and homeowners' insurance (77
     percent).[^446] Nearly 70 percent of those who use a cellphone
     frequently had a least one dropped call in the week before the
     survey, and nearly 60 percent said they had a bad connection. Only
     31 percent said the provider's response to a service inquiry was
     very helpful, while 40 percent said responses to billing inquiries
     were very helpful. The magazine asserts that these survey results
     explain why 35 percent of its respondents were seriously
     considering switching carriers. According to the deputy editor of
     Consumer Reports, the survey results indicate that "the chronic
     problems for cellphone customers are service and billing."[^447]

183. 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 2004 was issued on March 4,
     2005.[^448] 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 333,812 complaints registered in the
     fourth quarter, wireless complaints accounted for 4,369, or
     slightly more than 1 percent of the total. This represented a sharp
     decline from the 9,120 wireless complaints recorded in the third
     quarter of 2004.

184. Of those 4,369 complaints from wireless consumers, service quality
     ranked third behind billing and rates and early termination of
     service contracts in terms of the number of complaints during the
     reporting period. In particular, 2,300 of the complaints were
     related to billing and rates, 670 of the complaints were related to
     contract and early terminations issues, and 606 of the complaints
     were related to service quality issues, with the remaining
     complaints being related to carrier marketing and advertising (537
     complaints) and number portability (256 complaints). 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

185. The *Ninth Report* and previous reports compared 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.[^449] As noted in the *Ninth
     Report*, these comparisons have shown three consistent differences
     in performance between the U.S. mobile market and mobile markets
     abroad. First, mobile penetration is significantly higher in
     Western Europe and developed Asia-Pacific countries than in the
     United States. Second, average minutes of use per subscriber are
     significantly higher in the United States than in Western Europe
     and developed Asia-Pacific countries. Third, revenue per minute, a
     commonly used proxy for pricing, is significantly lower in the
     United States than in Western Europe and Japan.

186. More recent data confirm that the same pattern of international
     differences in mobile market performance continued into the year
     2004.[^450] Mobile penetration remains significantly higher in
     Western Europe and parts of the Asia-Pacific region than in the
     United States. Mobile penetration averaged an estimated 95 percent
     in Western Europe at the end of 2004.[^451] In a number of
     countries, including Italy, the United Kingdom, Sweden, and
     Portugal, mobile penetration exceeded 100 percent at the end of
     2004 due to double counting of subscribers.[^452] As in years past,
     France finished 2004 with the lowest mobile penetration rate in
     Western Europe at 74 percent.[^453] Thus, as in previous years,
     U.S. mobile penetration at the end of 2004, at approximately 61
     percent,[^454] was lower than the lowest mobile penetration rate in
     Western Europe.

187. Japan finished the year with a mobile penetration level of 71
     percent,[^455] somewhat lower than the lowest penetration rate in
     Western Europe but 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 (89 percent), South Korea (76 percent), Hong
     Kong (106 percent), and Singapore (90 percent).[^456]

188. The United States continues to lead the world in usage, with
     average MOUs estimated to be approximately 630 per month in the
     fourth quarter of 2004.[^457] This compares with an average across
     Western Europe of 137 MOUs, with most Western European countries
     tightly clustered in the range from 110 to 170 MOUs.[^458] The
     exceptions include Finland (258), France (225), and, at the low
     end, Germany (76).[^459] MOUs in comparable Asian-Pacific countries
     were generally higher than the Western European average, but still
     well below the U.S. figure, including Japan (154), Australia (168),
     South Korea (316), Hong Kong (387), and Singapore (282).[^460]

189. Revenue per minute[^461] in Western Europe averaged \$0.26 in the
     fourth quarter of 2004, and ranged from a high of \$0.53 in
     Switzerland to a low of \$0.16 in Finland, with most countries
     clustered in the range between \$0.18 and \$0.30.[^462] At \$0.08,
     average revenue per minute in the United States during the same
     period was therefore less than one-third of the European average
     and half the lowest revenue per minute in Western Europe.[^463]

190. At \$0.32, revenue per minute in Japan was four times the U.S.
     figure at the end of 2004 and also higher than the European
     average, but lower than the European highs of \$0.53 in the Swiss
     mobile market and \$0.35 in the German mobile market.[^464] 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 (\$0.10).[^465] The only developed country with a
     lower revenue per minute than the United States was Hong Kong, at
     \$0.06.[^466]

191. One of the reasons revenue per minute is higher in Western Europe
     than in the United States is that the calling party pays system
     used throughout Western Europe tends to produce higher mobile
     termination rates, and consequently higher charges for calls to
     mobile phones, than the mobile party pays system used in the United
     States.[^467] Apart from the effects of calling party pays,
     however, this difference in the pricing of mobile telephone service
     is widely attributed to a less aggressive competitive environment
     in Western European mobile markets for services paid for by mobile
     subscribers.[^468] 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

192. The *Ninth Report* and previous reports observed that the
     percentage of mobile service revenues from data services is
     significantly higher in Western Europe than in the United
     States.[^469] This difference in mobile data performance continued
     into 2004. In the fourth quarter of 2004 revenues from mobile data
     services contributed an estimated 16 percent of European mobile
     carriers' ARPU on average, and ranged from 7 to 21 percent of ARPU
     in individual European markets. [^470] This compares with 6 percent
     of U.S. mobile carriers' ARPU in the same period, double the
     previous year's figure.[^471] The percentage of ARPU derived from
     mobile data services was even higher in Japan (24 percent) than in
     Western Europe.[^472] Text messaging, or SMS, continues to be the
     most popular mobile data service in Western Europe, accounting for
     an estimated 90 percent of European operators' data revenues.[^473]
     One analyst estimates that about 71 percent of European cellphone
     users send text messages, more than twice the percentage in the
     United States.[^474] As noted in the *Ninth Report*, one of the
     reasons Western Europe leads the United States in mobile data usage
     is that mobile voice is still relatively expensive on a per minute
     basis in Europe compared to the United States.[^475] European
     mobile subscribers are more likely to opt for text messaging
     because it is cheaper than placing a call on their mobile
     phones.[^476] In contrast, most U.S. mobile subscribers are on
     calling plans that include large buckets of minutes and are more
     likely to make a phone call because the incremental cost of a call
     is close to zero.[^477]

193. The number of foreign mobile telephone carriers providing mobile
     data services over next-generation networks continued to grow in
     the past year. As noted in the *Ninth Report* and previous reports,
     while the European Commission had originally targeted the beginning
     of 2002 as the date for the coordinated introduction of 3G
     services, European carriers had delayed the launch of commercial
     WCDMA service until 2003 at the earliest and in most cases
     2004.[^478] As of the end of 2003, commercial start-up of WCDMA
     service in Europe was limited to a small number of carriers in a
     handful of markets, including Austria, Denmark, Italy, Luxembourg,
     Sweden and the United Kingdom.[^479] In contrast, by the end of
     2004 at least one WCDMA network had been launched in nearly all
     Western European markets, and three or more WCDMA networks had been
     launched in a number of markets, including Austria, Germany,
     Greece, Italy, Portugal, and the United Kingdom.[^480] Even though
     commercial 3G services are now widely available in Western Europe,
     analysts and experts continue to stress that consumer use of new
     services may be limited in the near term due to problems such as
     download speeds that are much slower than theoretical speeds,
     patchy coverage (especially inside buildings), and lack of "killer
     applications" that could drive demand for 3G services.[^481]

194. Japan's NTT DoCoMo launched the world's first commercial 3G service
     over a WCDMA network in October 2001.[^482] As noted in the *Ninth
     Report*, after two years of relatively sluggish growth, consumer
     uptake of NTT DoCoMo's WCDMA service, which the company calls FOMA
     (Freedom of Multimedia Access), picked up speed in late 2003 and
     the first half of 2004. Rapid adoption of FOMA continued through
     early 2005, with the number of FOMA subscribers surpassing 12.2
     million as of the end of April 2005, up from nearly 3.6 million a
     year earlier.[^483] However, because rival Japanese carrier KDDI's
     CDMA2000 1xRTT-based service enjoyed a rapid adoption rate from the
     time it was launched in April 2002, NTT DoCoMo's WCDMA service has
     yet to close the gap. The number of subscribers to KDDI's CDMA2000
     service rose to more than 18.2 million at the end of April 2005, up
     from nearly 14 million the previous year.[^484] KDDI's CDMA2000
     subscribers now represent more than 92 percent of its total
     subscriber base, whereas FOMA subscribers represent nearly a
     quarter of NTT DoCoMo's total subscriber base. KDDI's packet data
     service using 1xEV-DO, which was introduced in November 2003, also
     appears to enjoy a relatively rapid adoption rate, with an
     estimated 2.55 million subscribers, or about 13 percent of KDDI's
     total subscriber base, by the end of February 2005.[^485] Data
     services offered over next-generation CDMA networks continue to be
     popular with consumers in Korea. South Korea had accumulated a
     total of over 33 million CDMA2000 subscribers, representing 90
     percent of South Korea's total mobile telephone subscriber base,
     through December 2004, about 10 million of which are using services
     offered over CDMA2000 1xEV-DO networks.[^486]

# INTERMODAL ISSUES

## Wireless -- Wireline Competition

195. Once solely a business tool, wireless phones are now a mass-market
     consumer device.[^487] As the Economist magazine recently noted,
     "When you leave your house, you probably take your keys, your
     wallet and your phone."[^488] The overall wireless penetration rate
     in the United States is now at 62 percent, [^489] and more than 90
     percent for the U.S. population between the ages of 20 and
     49.[^490] According to one study, two-thirds of all U.S. households
     have at least one cellphone, with many having more than one.[^491]

### Wireless Substitution

196. Total wireless substitution has grown significantly in recent
     years. According to a 2004 survey done for the Centers for Disease
     Control (CDC), 5.5 percent of adults lived in households with only
     wireless phones in the second half of 2004, up from 4.4 percent in
     the first half of 2004 and 2.8 percent in the first half of
     2003.[^492] The rate among younger users appears much higher, with
     roughly 14 percent of 18-24 year-olds living in wireless-only
     households. According to one analyst, most wireless-only users do
     not actually cancel their wireline service; instead, they simply
     never sign up for wireline when making an initial phone service
     decision.[^493]

197. Even when not "cutting the cord" completely, consumers appear
     increasingly to choose wireless service over traditional wireline
     service, particularly for certain uses. A recent study showed that
     one-third of all households receive more than half of their calls
     on wireless phones, with 9 percent receiving almost all their calls
     wirelessly.[^494] In the *Ninth Report*, we discussed the pressures
     that wireless growth is placing on companies which offer wireline
     services.[^495] In 2004 these trends continued, as the number of
     landlines declined by around 1.2 percent quarterly in the second
     and third quarters of 2004, and wireline long distance voice
     revenues continued to erode.[^496] At the end of 2004, there were
     more wireless subscribers than wireline in the United States - 176
     million access lines versus more than 184 million wireless
     subscribers.[^497] In response, some incumbent wireline companies
     are beginning to focus more on their fast-growing wireless
     businesses,[^498] where, nationwide, service revenues grew by 12
     percent in 2004.[^499] One wireline executive remarked, "We are not
     looking at ourselves as a phone company anymore."[^500]

198. 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 cheaper than wireline, particularly if one is
     making a long-distance call or when traveling.[^501] As one analyst
     put it more recently, "For many customers, wireless is cheaper with
     greater utility than wireline -- in contrast to perceptions,
     wireless prices have indeed been falling, making it more
     competitive with wireline."[^502] The analyst later added:

> For your mere \$40 or \$50 or \$60 plan with mega-minutes, you also
> get voice mail, caller ID, 3-way calling, call waiting, and call
> forwarding thrown in. On the wireline these features will cost you
> between \$15 to \$20. And don't forget, you get mobility to boot. Who
> cares if the call gets dropped once in a while. The utility is
> great![^503]

### Wireless Alternatives

199. The number of mobile wireless carriers offering service plans
     designed to compete directly with wireline local telephone service
     continues to increase. These plans offer unlimited local calling
     for around \$30 to \$40 a month.[^504] The largest of such
     providers, Leap, under its "Cricket" brand, offers mobile telephone
     service in 39 markets in 20 states.[^505] At the end of 2004, Leap
     had over 1.5 million customers.[^506] Leap claims that 52 percent
     of its customers do not have a wireline phone at home, up from 43
     percent one year ago.[^507] In addition, 93 percent of Leap
     customers use the service as their primary phone.[^508] According
     to Leap, its customers average approximately 1,500 minutes of use
     per month.[^509] MetroPCS, which began offering a similar unlimited
     calling plan in 2002, had 1.5 million customers as of February
     2005.[^510] MetroPCS offers service in California, Florida, and
     Georgia.[^511]

200. As discussed in the *Ninth Report*, such unlimited local wireless
     calling plans are now common.[^512] No fewer than 17 regional and
     local competitors offered similar plans in 41 states.[^513] In
     addition, in 2005, many national carriers expanded calling plans
     that are effectively unlimited, with 1,000 "anytime" minutes and
     unlimited night and weekend minutes for around \$40-\$65 per
     month.[^514] One analyst commented on the recent addition of "bells
     and whistles," such as text messaging and long- distance service,
     into these plans, "as carriers seek to provide customers a
     comprehensive alternative to wired service."[^515]

## Wireless Local Area Networks

201. Wireless Local Area Networks[^516] are playing an increasingly
     important role as a competitor and supplement to the services
     offered by the CMRS industry.[^517] WLANs enable consumers to
     obtain high-speed wireless Internet connections within certain
     locations at a range of 150 to 250 feet.[^518] 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. Two Wi-Fi manufacturers, D-Link and Netgear, are
     currently offering rebates which make the effective purchase price
     of an 802.11g card, a faster standard, less than the price of a
     slower 802.11b card.[^519] New "SpeedBoost" or "Super G" routers,
     marketed as "pre-802.11n," employ MIMO (Multiple Input Multiple
     Output) technology, making them capable of providing speeds of up
     to 108 Mbps.[^520]

202. WLAN users can get high-speed Internet connections at so-called
     "hot spots," including locations such as restaurants, coffee shops,
     hotels, airports, convention centers, and city parks, streets, and
     squares.[^521] Estimates on the number of public Wi-Fi hot spots
     vary considerably. Wi‑Fi411 estimates 12,509 in the United
     States.[^522] However, Intel's website counts 25,877 Wi-Fi
     locations in United States.[^523] The Gartner Group predicts there
     will be more than 150,000 hotspots worldwide by the end of
     2005.[^524] Gartner has also estimated that the number of hotspot
     users worldwide will total 30 million by the end of 2004, up from
     9.3 million in 2003 and 2.5 million in 2002.[^525] The use of WLANs
     to access the Internet is becoming so common, that, according to
     one estimate, 75 percent of all laptop computers being shipped
     today have Wi-Fi built-in as original equipment.[^526]

203. As noted in the *Ninth Report*, several mobile telephone carriers
     have entered the hot spot operation business through acquisitions,
     partnerships, or independent deployments.[^527] Generally, mobile
     telephone carriers offer WLAN services to augment their voice
     service offerings with data access.[^528] 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.[^529] In the past year mobile carriers continued to
     extend their Wi-Fi coverage by entering into agreements with other
     carriers. T‑Mobile now claims 5,675 hotspots where its customers
     can get connectivity.[^530] Nextel is partnering with Boingo
     Wireless and Wayport, and claims about 7,000 hotspots.[^531] Sprint
     reports that it offers service at 19,000 hotspots through roaming
     agreements.[^532] In May 2003, Verizon Online announced that it
     would upgrade 200,000 pay phones in Manhattan to offer free Wi-Fi
     as a free add-on for its residential broadband DSL
     subscribers.[^533] More recently, however, Verizon Wireless
     announced that the company would expand its CDMA2000 1xEV-DO
     service in New York City and begin to phase out its some 360 Wi-Fi
     payphone hotspots for its online Internet access customers.[^534]

# CONCLUSION

204. Even with fewer nationwide mobile telephone carriers to choose
     from, U.S. consumers continue to benefit from robust competition in
     the CMRS marketplace. During 2004, the CMRS industry experienced
     another year of growth, demonstrating the continuing demand for and
     reliance upon mobile services. As of December 2004, we estimate
     there were approximately 184.7 million mobile telephone
     subscribers, which translates into a nationwide penetration rate of
     roughly 62 percent.[^535] 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 580
     minutes per month in the second half of 2004, an increase of more
     than an hour from a year earlier and more than triple the average
     usage of mobile subscribers in Western Europe and Japan.[^536]
     Moreover, although U.S. mobile subscribers still prefer to use
     their mobile phones to talk rather than to send text messages, SMS
     traffic volume grew to 4.66 billion per month in December 2004,
     more than double the 2 billion messages per month reported in
     December 2003.[^537] 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 2004,[^538] mobile telephone service in the United
     States remains relatively inexpensive on a per minute basis
     compared with that in Western Europe.[^539]

205. 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 2004.[^540] Carriers also continued to deploy
     networks based on CDMA2000 1xEV-DO or WCDMA 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 Cingular Wireless and AT&T Wireless
     has resulted in the first decline in the number of nationwide
     carriers since the Commission started compiling these
     reports.[^541] Due largely to this transaction, there was a sharp
     decline in the percentage of the U.S. population living in counties
     with access to six or more different mobile telephone operators as
     compared with the previous year. Nevertheless, despite the
     reduction in the number of nationwide carriers from six to five, 97
     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 93 percent
     of the U.S. population continues to live in counties with four or
     more mobile telephone operators competing to offer service, and 87
     percent of the U.S. population continues to live in counties with
     five or more competing mobile telephone operators.[^542]

206. 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. A recent study showed that one-third of all households
     receive more than half of their calls on wireless phones, with 9
     percent receiving almost all their calls wirelessly.

207. 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,[^543] and
     conclude that the CMRS marketplace is effectively competitive.

# ADMINISTRATIVE MATTERS

208. This Tenth 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).

209. 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.

210. It is FURTHER ORDERED that the proceeding in the WT Docket No.
     05-71 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 79

Table 2: FCC's Semi-Annual Local Telephone Competition Survey 80

Table 3: Economic Area Penetration Rates 81

Table 4: Top 25 Mobile Telephone Operators by Subscribers 85

Table 5: Estimated Mobile Telephone Rollouts by County 86

Table 6: Mobile Telephone Digital Coverage 87

Table 7: Change in CPI 87

Table 8: Average Revenue Per Minute 88

Table 9: Market Entry Over Time 88

Table 10: Mobile Market Structure and Performance in Selected Countries
89

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

  ------ ------------- ------------ -------------- ------------- --------- ----------- --------------- ---------
  Date   Estimated     Year End     Total          Roamer        Cell      Employees   Cumulative      Average
         Subscribers   over Year    Six-Month      Services      Sites                 Capital         Local
                       End          Service        Revenues                            Investment      Monthly
                       Subscriber   Revenues                                           (000s)          Bill
                       Increase     (000s)                                                             

  Jan 85 91,600                     \$178,085                    346       1,404       \$354,760       

  June   203,600                    \$176,231                    599       1,697       \$588,751       
  85                                                                                                   

  Dec 85 340,213       248,613      \$306,197                    913       2,727       \$911,167       

  June   500,000                    \$360,585                    1,194     3,556       \$1,140,163     
  86                                                                                                   

  Dec 86 681,825       341,612      \$462,467                    1,531     4,334       \$1,436,753     

  June   883,778                    \$479,514                    1,732     5,656       \$1,724,348     
  87                                                                                                   

  Dec 87 1,230,855     549,030      \$672,005                    2,305     7,147       \$2,234,635     \$96.83

  June   1,608,697                  \$886,075                    2,789     9,154       \$2,589,589     \$95.00
  88                                                                                                   

  Dec 88 2,069,441     838,586      \$1,073,473    \$89,331      3,209     11,400      \$3,274,105     \$98.02

  June   2,691,793                  \$1,406,463    \$121,368     3,577     13,719      \$3,675,473     \$85.52
  89                                                                                                   

  Dec 89 3,508,944     1,439,503    \$1,934,132    \$173,199     4,169     15,927      \$4,480,141     \$83.94

  June   4,368,686                  \$2,126,362    \$192,350     4,768     18,973      \$5,211,765     \$83.94
  90                                                                                                   

  Dec 90 5,283,055     1,774,111    \$2,422,458    \$263,660     5,616     21,382      \$6,281,596     \$80.90

  June   6,380,053                  \$2,653,505    \$302,329     6,685     25,545      \$7,429,739     \$74.56
  91                                                                                                   

  Dec 91 7,557,148     2,274,093    \$3,055,017    \$401,325     7,847     26,327      \$8,671,544     \$72.74

  June   8,892,535                  \$3,633,285    \$436,725     8,901     30,595      \$9,276,139     \$68.51
  92                                                                                                   

  Dec 92 11,032,753    3,475,605    \$4,189,441    \$537,146     10,307    34,348      \$11,262,070    \$68.68

  June   13,067,318                 \$4,819,259    \$587,347     11,551    36,501      \$12,775,967    \$67.31
  93                                                                                                   

  Dec 93 16,009,461    4,976,708    \$6,072,906    \$774,266     12,805    39,775      \$13,946,406    \$61.48

  June   19,283,306                 \$6,519,030    \$778,116     14,740    45,606      \$16,107,920    \$58.65
  94                                                                                                   

  Dec 94 24,134,421    8,124,960    \$7,710,890    \$1,052,666   17,920    53,902      \$18,938,677    \$56.21

  June   28,154,415                 \$8,740,352    \$1,120,337   19,833    60,624      \$21,709,286    \$52.45
  95                                                                                                   

  Dec 95 33,785,661    9,651,240    \$10,331,614   \$1,422,233   22,663    68,165      \$24,080,466    \$51.00

  June   38,195,466                 \$11,194,247   \$1,314,943   24,802    73,365      \$26,707,046    \$48.84
  96                                                                                                   

  Dec 96 44,042,992    10,257,331   \$12,440,724   \$1,465,992   30,045    84,161      \$32,573,522    \$47.70

  June   48,705,553                 \$13,134,551   \$1,392,440   38,650    97,039      \$37,454,294    \$43.86
  97                                                                                                   

  Dec 97 55,312,293    11,269,301   \$14,351,082   \$1,581,765   51,600    109,387     \$46,057,911    \$42.78

  June   60,831,431                 \$15,286,660   \$1,584,891   57,674    113,111     \$50,178,812    \$39.88
  98                                                                                                   

  Dec 98 69,209,321    13,897,028   \$17,846,515   \$1,915,578   65,887    134,754     \$60,542,774    \$39.43

  June   76,284,753                 \$19,368,304   \$1,922,416   74,157    141,929     \$66,782,827    \$40.24
  99                                                                                                   

  Dec 99 86,047,003    16,837,682   \$20,650,185   \$2,163,001   81,698    155,817     \$71,264,865    \$41.24

  June   97,035,925                 \$24,645,365   \$1,971,625   95,733    159,645     \$76,652,358    \$45.15
  00                                                                                                   

  Dec 00 109,478,031   23,431,028   \$27,820,655   \$1,911,356   104,288   184,449     \$89,624,387    \$45.27

  June   118,397,734                \$30,905,721   \$1,727,058   114,059   186,317     \$99,728,965    \$45.56
  01                                                                                                   

  Dec 01 128,374,512   18,896,481   \$34,110,163   \$2,209,387   127,540   203,580     \$105,030,101   \$47.37

  June   134,561,370                \$36,707,086   \$1,846,267   131,350   186,956     \$118,418,677   \$47.42
  02                                                                                                   

  Dec 02 140,766,842   12,392,330   \$39,801,101   \$2,049,245   139,338   192,410     \$126,922,347   \$48.40

  June   148,065,824                \$41,384,171   \$1,825,243   147,719   187,169     \$134,147049    \$49.46
  03                                                                                                   

  Dec 03 158,721,981   17,955,139   \$46,239,922   \$1,941,024   162,986   205,629     \$145,866,914   \$49.91

  June   169,467,393                \$49,275,671   \$2,015,780   174,368   212,186     \$156,700,380   \$49.49
  04                                                                                                   

  Dec 04 182,140,362   23,418,381   \$52,854,539   \$2,194,532   175,725   226,016     \$173,793,507   \$50.64
  ------ ------------- ------------ -------------- ------------- --------- ----------- --------------- ---------

Source**:** CTIA, *Background on CTIA\'s Semi-Annual Wireless Industry
Survey*
\<http://www.ctia.org/research_statistics/statistics/index.cfm/AID/10030\>.

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

![](media/image1.jpeg){width="6.628472222222222in"
height="7.7444444444444445in"}

NA -- Not Applicable

\* Data withheld to maintain firm confidentiality.

1/ Carriers with under 10,000 subscribers in a state were not required
to report for that state.

2/ Percentage of mobile wireless subscribers receiving their service
from a mobile wireless reseller.

Source: Local Telephone Competition: Status as of December 31, 2004,
Federal Communications Commission, July 2005 (Table 13: Mobile Wireless
Telephone Subscribers).

**Table 3: Economic Area Penetration Rates**

+---+--------------------------------+-----+------+-----+---+-----+----+
| E | EA Name                        | Su  | EA   | 2   | 2 | 2   | EA |
| A |                                | bsc | Po   | 004 | 0 | 003 | d  |
|   |                                | rib | pula | Pe  | 0 | Pe  | en |
|   |                                | ers | tion | net | 4 | net | si |
|   |                                |     |      | rat |   | rat | ty |
|   |                                |     |      | ion | H | ion |    |
|   |                                |     |      | R   | H | R   |    |
|   |                                |     |      | ate | I | ate |    |
+===+================================+=====+======+=====+===+=====+====+
| 4 | Atlanta, GA-AL-NC              | 4,3 | 5    | 80% | 2 | 69. | 24 |
| 0 |                                | 99, | ,471 |     | 0 | 94% | 6. |
|   |                                | 986 | ,412 |     | 9 |     | 04 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Washington-Baltimore,          | 6,6 | 8    | 79% | 2 | 66. | 40 |
| 3 | DC-MD-VA-WV-PA                 | 00, | ,403 |     | 2 | 31% | 2. |
|   |                                | 891 | ,130 |     | 8 |     | 76 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Fort Myers-Cape Coral, FL      | 5   | 692  | 78% | 1 | 65. | 23 |
| 2 |                                | 37, | ,265 |     | 7 | 91% | 4. |
|   |                                | 603 |      |     | 9 |     | 27 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | San Diego, CA                  | 2,1 | 2    | 78% | 2 | 68. | 66 |
| 6 |                                | 89, | ,813 |     | 4 | 34% | 0. |
| 1 |                                | 741 | ,833 |     | 8 |     | 48 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | Pensacola, FL                  | 4   | 623  | 77% | 1 | 61. | 15 |
| 1 |                                | 78, | ,252 |     | 7 | 33% | 4. |
|   |                                | 740 |      |     | 4 |     | 06 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Las Vegas, NV-AZ-UT            | 1,3 | 1    | 77% | 2 | 62. | 2  |
| 5 |                                | 07, | ,709 |     | 1 | 18% | 3. |
| 3 |                                | 988 | ,797 |     | 5 |     | 74 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Austin-San Marcos, TX          | 1,0 | 1    | 76% | 2 | 65. | 15 |
| 3 |                                | 20, | ,349 |     | 4 | 22% | 6. |
| 0 |                                | 472 | ,267 |     | 4 |     | 06 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Jacksonville, FL-GA            | 1,4 | 1    | 75% | 1 | 62. | 11 |
| 9 |                                | 11, | ,885 |     | 7 | 25% | 2. |
|   |                                | 557 | ,190 |     | 9 |     | 52 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Orlando, FL                    | 2,6 | 3    | 74% | 2 | 59. | 26 |
| 0 |                                | 90, | ,642 |     | 2 | 32% | 5. |
|   |                                | 742 | ,540 |     | 8 |     | 84 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Miami-Fort Lauderdale, FL      | 4,1 | 5    | 74% | 2 | 64. | 48 |
| 1 |                                | 69, | ,602 |     | 0 | 19% | 3. |
|   |                                | 125 | ,222 |     | 8 |     | 20 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Honolulu, HI                   | 8   | 1    | 74% | 2 | 65. | 18 |
| 7 |                                | 96, | ,211 |     | 2 | 23% | 7. |
| 2 |                                | 643 | ,537 |     | 0 |     | 20 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Tampa-St.                      | 1,7 | 2    | 72% | 1 | 59. | 89 |
| 4 | Petersburg-Clearwater, FL      | 18, | ,395 |     | 7 | 30% | 0. |
|   |                                | 969 | ,997 |     | 2 |     | 99 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Huntsville, AL-TN              | 7   | 997  | 71% | 2 | 56. | 11 |
| 4 |                                | 10, | ,824 |     | 5 | 73% | 9. |
|   |                                | 709 |      |     | 6 |     | 14 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Birmingham, AL                 | 1,1 | 1    | 71% | 2 | 59. | 13 |
| 8 |                                | 21, | ,578 |     | 2 | 22% | 7. |
|   |                                | 667 | ,903 |     | 6 |     | 13 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Denver-Boulder-Greeley,        | 2,8 | 3    | 71% | 2 | 63. | 5  |
| 4 | CO-KS-NE                       | 20, | ,984 |     | 0 | 02% | 2. |
| 1 |                                | 176 | ,105 |     | 2 |     | 02 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Detroit-Ann Arbor-Flint, MI    | 4,8 | 6    | 70% | 2 | 61. | 36 |
| 7 |                                | 47, | ,963 |     | 1 | 71% | 4. |
|   |                                | 876 | ,637 |     | 1 |     | 07 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Houston-Galveston-Brazoria, TX | 3,9 | 5    | 70% | 2 | 61. | 16 |
| 3 |                                | 16, | ,632 |     | 3 | 07% | 9. |
| 1 |                                | 762 | ,853 |     | 1 |     | 25 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Los Angeles-Riverside-Orange   | 1   | 18   | 70% | 2 | 61. | 28 |
| 6 | County, CA-AZ                  | 2,6 | ,003 |     | 4 | 22% | 6. |
| 0 |                                | 82, | ,420 |     | 3 |     | 10 |
|   |                                | 749 |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | New York-No. New Jer.-Long     | 1   | 25   | 69% | 2 | 59. | 89 |
| 0 | Island, NY-NJ-CT-PA-MA-VT      | 7,6 | ,712 |     | 3 | 46% | 0. |
|   |                                | 79, | ,577 |     | 2 |     | 56 |
|   |                                | 758 |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Philadelphia-Wilmington-Atl.   | 5,0 | 7    | 69% | 2 | 59. | 77 |
| 2 | City, PA-NJ-DE-MD              | 66, | ,309 |     | 4 | 60% | 8. |
|   |                                | 628 | ,792 |     | 0 |     | 84 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Raleigh-Durham-Chapel Hill, NC | 1,2 | 1    | 69% | 1 | 59. | 18 |
| 9 |                                | 55, | ,831 |     | 8 | 35% | 8. |
|   |                                | 088 | ,510 |     | 6 |     | 38 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Columbus, GA-AL                | 3   | 496  | 69% | 1 | 54. | 8  |
| 9 |                                | 43, | ,538 |     | 6 | 98% | 4. |
|   |                                | 102 |      |     | 6 |     | 08 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | San Francisco-Oakland-San      | 6,3 | 9    | 69% | 2 | 62. | 27 |
| 6 | Jose, CA                       | 28, | ,111 |     | 5 | 83% | 1. |
| 3 |                                | 740 | ,806 |     | 9 |     | 07 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Seattle-Tacoma-Bremerton, WA   | 2,8 | 4    | 69% | 2 | 60. | 19 |
| 7 |                                | 45, | ,135 |     | 3 | 65% | 0. |
| 0 |                                | 745 | ,291 |     | 3 |     | 45 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Charlotte-Gastonia-Rock Hill,  | 1,3 | 2    | 68% | 2 | 60. | 24 |
| 3 | NC-SC                          | 80, | ,031 |     | 0 | 25% | 0. |
|   |                                | 459 | ,519 |     | 1 |     | 50 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Charleston-North Charleston,   | 4   | 587  | 68% | 1 | 61. | 14 |
| 6 | SC                             | 02, | ,297 |     | 9 | 90% | 9. |
|   |                                | 224 |      |     | 0 |     | 80 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Montgomery, AL                 | 3   | 481  | 68% | 1 | 58. | 6  |
| 9 |                                | 26, | ,137 |     | 7 | 56% | 6. |
|   |                                | 555 |      |     | 2 |     | 86 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Phoenix-Mesa, AZ-NM            | 2,3 | 3    | 68% | 1 | 58. | 9  |
| 5 |                                | 22, | ,407 |     | 8 | 49% | 3. |
| 8 |                                | 685 | ,197 |     | 0 |     | 91 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Sacramento-Yolo, CA            | 1,5 | 2    | 68% | 2 | 61. | 18 |
| 6 |                                | 79, | ,311 |     | 5 | 61% | 8. |
| 4 |                                | 733 | ,567 |     | 4 |     | 08 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Boston-Worce                   | 5,3 | 7    | 67% | 2 | 56. | 42 |
|   | ster-Lawrence-Lowell-Brockton, | 18, | ,954 |     | 3 | 95% | 1. |
|   | MA-NH-RI-VT                    | 293 | ,554 |     | 1 |     | 83 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Sarasota-Bradenton, FL         | 5   | 763  | 67% | 1 | 54. | 27 |
| 3 |                                | 10, | ,795 |     | 8 | 54% | 3. |
|   |                                | 392 |      |     | 6 |     | 56 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Louisville, KY-IN              | 9   | 1    | 67% | 2 | 54. | 18 |
| 0 |                                | 43, | ,416 |     | 2 | 65% | 0. |
|   |                                | 702 | ,914 |     | 3 |     | 92 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Cedar Rapids, IA               | 2   | 384  | 67% | 2 | 60. | 10 |
| 0 |                                | 56, | ,577 |     | 8 | 50% | 1. |
| 3 |                                | 339 |      |     | 2 |     | 33 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Richmond-Petersburg, VA        | 9   | 1    | 66% | 1 | 57. | 12 |
| 5 |                                | 53, | ,446 |     | 8 | 48% | 4. |
|   |                                | 153 | ,123 |     | 9 |     | 03 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Norfolk-Virginia Beach-Newport | 1,1 | 1    | 66% | 1 | 59. | 28 |
| 0 | News, VA-NC                    | 42, | ,722 |     | 7 | 00% | 9. |
|   |                                | 954 | ,764 |     | 1 |     | 89 |
|   |                                |     |      |     | 2 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | Kansas City, MO-KS             | 1,6 | 2    | 66% | 1 | 57. | 8  |
| 9 |                                | 31, | ,469 |     | 9 | 38% | 8. |
|   |                                | 707 | ,340 |     | 5 |     | 73 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Dallas-Fort Worth, TX-AR-OK    | 5,0 | 7    | 66% | 2 | 57. | 11 |
| 2 |                                | 68, | ,645 |     | 7 | 15% | 9. |
| 7 |                                | 892 | ,530 |     | 0 |     | 00 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Tallahassee, FL-GA             | 4   | 720  | 65% | 2 | 57. | 6  |
| 5 |                                | 70, | ,434 |     | 1 | 29% | 3. |
|   |                                | 295 |      |     | 0 |     | 51 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Chicago-Gary-Kenosha, IL-IN-WI | 6,7 | 10   | 65% | 1 | 57. | 55 |
| 4 |                                | 47, | ,328 |     | 8 | 63% | 6. |
|   |                                | 713 | ,854 |     | 8 |     | 54 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Nashville, TN-KY               | 1,5 | 2    | 64% | 2 | 54. | 10 |
| 1 |                                | 67, | ,444 |     | 2 | 18% | 5. |
|   |                                | 076 | ,643 |     | 1 |     | 12 |
|   |                                |     |      |     | 2 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Minneapolis-St. Paul, MN-WI-IA | 2,8 | 4    | 64% | 1 | 56. | 8  |
| 0 |                                | 87, | ,498 |     | 5 | 07% | 2. |
| 7 |                                | 659 | ,286 |     | 5 |     | 98 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | San Antonio, TX                | 1,3 | 2    | 64% | 2 | 53. | 8  |
| 3 |                                | 63, | ,141 |     | 6 | 76% | 2. |
| 4 |                                | 432 | ,060 |     | 8 |     | 99 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Reno, NV-CA                    | 4   | 670  | 64% | 2 | 53. | 7. |
| 5 |                                | 28, | ,013 |     | 1 | 90% | 56 |
| 1 |                                | 904 |      |     | 1 |     |    |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Columbia, SC                   | 5   | 932  | 63% | 2 | 56. | 12 |
| 4 |                                | 83, | ,115 |     | 1 | 63% | 5. |
|   |                                | 258 |      |     | 7 |     | 95 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Memphis, TN-AR-MS-KY           | 1,1 | 1    | 63% | 2 | 53. | 10 |
| 3 |                                | 78, | ,882 |     | 3 | 62% | 2. |
|   |                                | 159 | ,332 |     | 9 |     | 99 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | Mobile, AL                     | 4   | 676  | 63% | 2 | 53. | 7  |
| 0 |                                | 25, | ,258 |     | 4 | 04% | 4. |
|   |                                | 052 |      |     | 3 |     | 75 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | Biloxi-Gulfport-Pascagoula, MS | 2   | 396  | 63% | 1 | 53. | 14 |
| 2 |                                | 51, | ,754 |     | 8 | 75% | 3. |
|   |                                | 602 |      |     | 4 |     | 45 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | New Orleans, LA-MS             | 1,0 | 1    | 63% | 2 | 55. | 17 |
| 3 |                                | 85, | ,725 |     | 5 | 47% | 1. |
|   |                                | 200 | ,338 |     | 7 |     | 93 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | Baton Rouge, LA-MS             | 4   | 739  | 63% | 4 | 55. | 14 |
| 4 |                                | 67, | ,673 |     | 1 | 27% | 0. |
|   |                                | 751 |      |     | 0 |     | 30 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | Columbia, MO                   | 2   | 369  | 63% | 3 | 55. | 5  |
| 8 |                                | 31, | ,014 |     | 5 | 71% | 8. |
|   |                                | 264 |      |     | 6 |     | 00 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Idaho Falls, ID-WY             | 1   | 306  | 63% | 2 | 55. | 1  |
| 4 |                                | 92, | ,120 |     | 5 | 56% | 0. |
| 8 |                                | 820 |      |     | 4 |     | 85 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Portland-Salem, OR-WA          | 1,8 | 2    | 63% | 2 | 55. | 7  |
| 6 |                                | 26, | ,883 |     | 2 | 36% | 6. |
| 7 |                                | 079 | ,737 |     | 5 |     | 01 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Fayetteville, NC               | 3   | 528  | 62% | 1 | 53. | 16 |
| 2 |                                | 25, | ,224 |     | 8 | 39% | 4. |
|   |                                | 395 |      |     | 8 |     | 57 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 4 | Asheville, NC                  | 2   | 444  | 62% | 3 | 55. | 12 |
| 2 |                                | 77, | ,594 |     | 6 | 53% | 8. |
|   |                                | 559 |      |     | 0 |     | 63 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 4 | Knoxville, TN                  | 6   | 983  | 62% | 2 | 53. | 16 |
| 4 |                                | 12, | ,329 |     | 2 | 35% | 5. |
|   |                                | 077 |      |     | 6 |     | 64 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 4 | Cincinnati-Hamilton, OH-KY-IN  | 1,3 | 2    | 62% | 2 | 55. | 29 |
| 9 |                                | 46, | ,184 |     | 1 | 45% | 4. |
|   |                                | 650 | ,860 |     | 3 |     | 08 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | Springfield, IL-MO             | 3   | 517  | 62% | 3 | 54. | 5  |
| 7 |                                | 19, | ,462 |     | 5 | 00% | 8. |
|   |                                | 432 |      |     | 1 |     | 20 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Lincoln, NE                    | 2   | 379  | 62% | 3 | 56. | 5  |
| 1 |                                | 34, | ,321 |     | 8 | 68% | 0. |
| 9 |                                | 631 |      |     | 1 |     | 24 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Tucson, AZ                     | 6   | 999  | 62% | 1 | 54. | 6  |
| 5 |                                | 19, | ,882 |     | 7 | 32% | 0. |
| 9 |                                | 700 |      |     | 4 |     | 03 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Harrisburg-Lebanon-Carlisle,   | 6   | 1    | 61% | 2 | 52. | 29 |
| 1 | PA                             | 84, | ,125 |     | 9 | 43% | 2. |
|   |                                | 542 | ,265 |     | 0 |     | 42 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 4 | Gr                             | 7   | 1    | 61% | 2 | 54. | 18 |
| 1 | eenville-Spartanburg-Anderson, | 66, | ,248 |     | 7 | 12% | 3. |
|   | SC-NC                          | 407 | ,824 |     | 3 |     | 62 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Columbus, OH                   | 1,4 | 2    | 61% | 2 | 52. | 19 |
| 1 |                                | 43, | ,349 |     | 2 | 99% | 0. |
|   |                                | 359 | ,060 |     | 7 |     | 40 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Milwaukee-Racine, WI           | 1,3 | 2    | 61% | 2 | 54. | 36 |
| 3 |                                | 64, | ,255 |     | 3 | 37% | 6. |
|   |                                | 308 | ,183 |     | 3 |     | 88 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | St. Louis, MO-IL               | 2,1 | 3    | 61% | 2 | 53. | 12 |
| 6 |                                | 75, | ,558 |     | 6 | 89% | 7. |
|   |                                | 046 | ,651 |     | 1 |     | 01 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Rochester, MN-IA-WI            | 1   | 318  | 61% | 3 | 54. | 5  |
| 0 |                                | 93, | ,374 |     | 1 | 62% | 5. |
| 6 |                                | 151 |      |     | 7 |     | 65 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Oklahoma City, OK              | 1,0 | 1    | 61% | 3 | 41. | 6  |
| 2 |                                | 34, | ,698 |     | 7 | 90% | 5. |
| 5 |                                | 482 | ,197 |     | 1 |     | 04 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Casper, WY-ID-UT               | 2   | 408  | 61% | 4 | 53. | 5. |
| 4 |                                | 47, | ,708 |     | 3 | 74% | 17 |
| 3 |                                | 762 |      |     | 7 |     |    |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Boise City, ID-OR              | 3   | 574  | 61% | 2 | 52. | 1  |
| 5 |                                | 49, | ,876 |     | 3 | 95% | 3. |
| 0 |                                | 835 |      |     | 9 |     | 69 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Salt Lake City-Ogden, UT-ID    | 1,2 | 2    | 61% | 2 | 52. | 3  |
| 5 |                                | 67, | ,088 |     | 1 | 91% | 5. |
| 2 |                                | 573 | ,974 |     | 3 |     | 68 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Wilmington, NC-SC              | 5   | 878  | 60% | 1 | 53. | 10 |
| 5 |                                | 23, | ,267 |     | 8 | 28% | 7. |
|   |                                | 937 |      |     | 2 |     | 39 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Savannah, GA-SC                | 3   | 668  | 60% | 1 | 58. | 9  |
| 8 |                                | 99, | ,214 |     | 7 | 73% | 1. |
|   |                                | 420 |      |     | 6 |     | 95 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 4 | Chattanooga, TN-GA             | 4   | 720  | 60% | 2 | 51. | 14 |
| 3 |                                | 32, | ,375 |     | 4 | 54% | 5. |
|   |                                | 342 |      |     | 7 |     | 32 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | Lafayette, LA                  | 3   | 601  | 60% | 4 | 52. | 9  |
| 5 |                                | 63, | ,654 |     | 0 | 27% | 9. |
|   |                                | 382 |      |     | 0 |     | 99 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | Little Rock-North Little Rock, | 9   | 1    | 60% | 3 | 53. | 4  |
| 0 | AR                             | 60, | ,614 |     | 9 | 70% | 6. |
|   |                                | 972 | ,850 |     | 6 |     | 09 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Minot, ND                      | 66, | 111  | 60% | 3 | \*  | 7. |
| 1 |                                | 357 | ,195 |     | 4 |     | 00 |
| 1 |                                |     |      |     | 6 |     |    |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Omaha, NE-IA-MO                | 6   | 1    | 60% | 1 | 54. | 6  |
| 1 |                                | 28, | ,044 |     | 9 | 63% | 2. |
| 8 |                                | 799 | ,156 |     | 8 |     | 40 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Lubbock, TX                    | 2   | 374  | 60% | 2 | 52. | 2  |
| 3 |                                | 23, | ,626 |     | 6 | 16% | 7. |
| 7 |                                | 809 |      |     | 6 |     | 17 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Albuquerque, NM-AZ             | 5   | 921  | 60% | 2 | 53. | 2  |
| 5 |                                | 50, | ,086 |     | 0 | 41% | 0. |
| 6 |                                | 868 |      |     | 1 |     | 89 |
|   |                                |     |      |     | 2 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Dayton-Springfield, OH         | 6   | 1    | 59% | 2 | 53. | 31 |
| 0 |                                | 65, | ,133 |     | 3 | 67% | 8. |
|   |                                | 914 | ,004 |     | 5 |     | 52 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | Monroe, LA                     | 1   | 333  | 59% | 4 | 51. | 5  |
| 9 |                                | 96, | ,519 |     | 0 | 46% | 6. |
|   |                                | 091 |      |     | 4 |     | 12 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | F                              | 2   | 405  | 59% | 3 | 52. | 8  |
| 2 | ayetteville-Springdale-Rogers, | 38, | ,160 |     | 6 | 01% | 8. |
|   | AR-MO-OK                       | 069 |      |     | 8 |     | 43 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Tulsa, OK-KS                   | 8   | 1    | 59% | 2 | 52. | 7  |
| 2 |                                | 22, | ,384 |     | 7 | 59% | 2. |
| 4 |                                | 803 | ,426 |     | 7 |     | 44 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Farmington, NM-CO              | 1   | 193  | 59% | 4 | 50. | 1  |
| 5 |                                | 15, | ,872 |     | 5 | 11% | 6. |
| 5 |                                | 064 |      |     | 1 |     | 04 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Portland, ME                   | 4   | 748  | 58% | 2 | 49. | 9  |
|   |                                | 30, | ,817 |     | 6 | 50% | 8. |
|   |                                | 714 |      |     | 1 |     | 56 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Greensboro-Winston-Salem-High  | 1,0 | 1    | 58% | 1 | 49. | 18 |
| 8 | Point, NC-VA                   | 80, | ,854 |     | 8 | 73% | 9. |
|   |                                | 786 | ,853 |     | 2 |     | 09 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Dothan, AL-FL-GA               | 1   | 332  | 58% | 2 | 44. | 5  |
| 6 |                                | 91, | ,409 |     | 2 | 82% | 3. |
|   |                                | 359 |      |     | 2 |     | 70 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Albany, GA                     | 2   | 468  | 58% | 2 | 46. | 6  |
| 7 |                                | 72, | ,178 |     | 5 | 98% | 2. |
|   |                                | 343 |      |     | 4 |     | 74 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Indianapolis, IN-IL            | 1,7 | 3    | 58% | 2 | 50. | 17 |
| 7 |                                | 72, | ,066 |     | 7 | 49% | 1. |
|   |                                | 015 | ,469 |     | 2 |     | 37 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Sioux Falls, SD-IA-MN-NE       | 2   | 519  | 58% | 3 | 50. | 1  |
| 1 |                                | 98, | ,143 |     | 5 | 96% | 5. |
| 6 |                                | 792 |      |     | 6 |     | 11 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Twin Falls, ID                 | 94, | 162  | 58% | 2 | 52. | 1  |
| 4 |                                | 154 | ,397 |     | 4 | 02% | 4. |
| 9 |                                |     |      |     | 2 |     | 08 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Albany-Schenectady-Troy, NY    | 6   | 1    | 57% | 2 | 48. | 13 |
|   |                                | 69, | ,171 |     | 7 | 19% | 4. |
|   |                                | 654 | ,669 |     | 4 |     | 71 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Staunton, VA-WV                | 1   | 334  | 57% | 1 | 50. | 5  |
| 6 |                                | 91, | ,087 |     | 8 | 30% | 0. |
|   |                                | 771 |      |     | 4 |     | 99 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Augusta-Aiken, GA-SC           | 3   | 604  | 57% | 2 | 51. | 8  |
| 7 |                                | 43, | ,799 |     | 0 | 51% | 9. |
|   |                                | 622 |      |     | 0 |     | 79 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Pittsburgh, PA-WV              | 1,6 | 2    | 57% | 2 | 51. | 28 |
| 3 |                                | 97, | ,971 |     | 6 | 06% | 4. |
|   |                                | 634 | ,829 |     | 4 |     | 77 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Tupelo, MS-AL-TN               | 3   | 625  | 57% | 4 | 44. | 4  |
| 5 |                                | 55, | ,002 |     | 8 | 50% | 9. |
|   |                                | 803 |      |     | 2 |     | 76 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | Beaumont-Port Arthur, TX       | 2   | 456  | 57% | 3 | 50. | 8  |
| 7 |                                | 62, | ,637 |     | 1 | 64% | 9. |
|   |                                | 074 |      |     | 8 |     | 20 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Davenport-Moline-Rock Island,  | 3   | 558  | 57% | 2 | 50. | 10 |
| 0 | IA-IL                          | 19, | ,913 |     | 5 | 35% | 8. |
| 2 |                                | 918 |      |     | 1 |     | 27 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Madison, WI-IL-IA              | 5   | 933  | 57% | 4 | 50. | 7  |
| 0 |                                | 35, | ,823 |     | 2 | 55% | 1. |
| 4 |                                | 325 |      |     | 3 |     | 33 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | North Platte, NE-CO            | 34, | 61   | 57% | 7 | \*  | 4. |
| 2 |                                | 990 | ,758 |     | 0 |     | 95 |
| 1 |                                |     |      |     | 1 |     |    |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Wichita, KS-OK                 | 6   | 1    | 57% | 1 | 48. | 2  |
| 2 |                                | 72, | ,175 |     | 8 | 13% | 0. |
| 2 |                                | 152 | ,577 |     | 6 |     | 49 |
|   |                                |     |      |     | 2 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Corpus Christi, TX             | 3   | 549  | 57% | 2 | 49. | 4  |
| 3 |                                | 14, | ,012 |     | 8 | 32% | 6. |
| 2 |                                | 474 |      |     | 3 |     | 47 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Eugene-Springfield, OR-CA      | 4   | 791  | 57% | 1 | 49. | 4  |
| 6 |                                | 48, | ,776 |     | 9 | 20% | 3. |
| 6 |                                | 641 |      |     | 3 |     | 10 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 2 | Greenville, NC                 | 4   | 823  | 56% | 2 | 50. | 8  |
| 1 |                                | 61, | ,517 |     | 6 | 13% | 7. |
|   |                                | 455 |      |     | 8 |     | 74 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 3 | Macon, GA                      | 4   | 768  | 56% | 1 | 45. | 6  |
| 8 |                                | 28, | ,701 |     | 8 | 47% | 2. |
|   |                                | 615 |      |     | 6 |     | 88 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Green Bay, WI-MI               | 3   | 671  | 56% | 2 | 49. | 3  |
| 9 |                                | 75, | ,225 |     | 4 | 46% | 4. |
|   |                                | 325 |      |     | 6 |     | 15 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Evansville-Henderson, IN-KY-IL | 4   | 854  | 56% | 3 | 48. | 7  |
| 9 |                                | 80, | ,714 |     | 8 | 72% | 5. |
|   |                                | 475 |      |     | 5 |     | 31 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Jackson, MS-AL-LA              | 7   | 1    | 56% | 2 | 49. | 4  |
| 7 |                                | 98, | ,432 |     | 8 | 21% | 9. |
|   |                                | 271 | ,518 |     | 8 |     | 67 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | Joplin, MO-KS-OK               | 1   | 263  | 56% | 3 | 46. | 7  |
| 3 |                                | 48, | ,904 |     | 1 | 96% | 4. |
|   |                                | 544 |      |     | 3 |     | 68 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | Springfield, MO                | 4   | 859  | 56% | 3 | 48. | 4  |
| 4 |                                | 77, | ,559 |     | 3 | 68% | 8. |
|   |                                | 887 |      |     | 0 |     | 14 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Des Moines, IA-IL-MO           | 9   | 1    | 56% | 3 | 49. | 4  |
| 0 |                                | 49, | ,683 |     | 0 | 49% | 7. |
| 0 |                                | 831 | ,257 |     | 1 |     | 32 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Peoria-Pekin, IL               | 2   | 528  | 56% | 3 | 50. | 9  |
| 0 |                                | 98, | ,671 |     | 4 | 04% | 0. |
| 1 |                                | 553 |      |     | 5 |     | 99 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Odessa-Midland, TX             | 2   | 388  | 56% | 3 | 49. | 1  |
| 3 |                                | 18, | ,007 |     | 4 | 12% | 0. |
| 5 |                                | 156 |      |     | 1 |     | 13 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Amarillo, TX-NM                | 2   | 481  | 56% | 1 | 48. | 1  |
| 3 |                                | 68, | ,633 |     | 6 | 55% | 1. |
| 8 |                                | 117 |      |     | 9 |     | 79 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Scottsbluff, NE-WY             | 51, | 92   | 56% | 7 | 48. | 7. |
| 4 |                                | 380 | ,360 |     | 0 | 66% | 81 |
| 2 |                                |     |      |     | 6 |     |    |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Flagstaff, AZ-UT               | 2   | 401  | 56% | 2 | 47. | 8. |
| 5 |                                | 25, | ,766 |     | 8 | 81% | 24 |
| 4 |                                | 848 |      |     | 0 |     |    |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Grand Rapids-Muskegon-Holland, | 1,0 | 1    | 55% | 2 | 48. | 20 |
| 2 | MI                             | 31, | ,881 |     | 2 | 94% | 6. |
|   |                                | 897 | ,991 |     | 0 |     | 76 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | Shreveport-Bossier City, LA-AR | 3   | 573  | 55% | 3 | 47. | 5  |
| 8 |                                | 17, | ,616 |     | 3 | 80% | 7. |
|   |                                | 777 |      |     | 8 |     | 96 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Grand Island, NE               | 1   | 288  | 55% | 6 | 51. | 1  |
| 2 |                                | 57, | ,047 |     | 6 | 04% | 1. |
| 0 |                                | 994 |      |     | 5 |     | 56 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Topeka, KS                     | 2   | 454  | 55% | 1 | 48. | 3  |
| 2 |                                | 51, | ,539 |     | 7 | 76% | 5. |
| 3 |                                | 297 |      |     | 6 |     | 62 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Billings, MT-WY                | 2   | 404  | 55% | 4 | 48. | 4. |
| 4 |                                | 24, | ,902 |     | 3 | 60% | 89 |
| 4 |                                | 011 |      |     | 9 |     |    |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Fresno, CA                     | 7   | 1    | 55% | 3 | 48. | 9  |
| 6 |                                | 79, | ,419 |     | 3 | 52% | 8. |
| 2 |                                | 419 | ,998 |     | 8 |     | 64 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Redding, CA-OR                 | 1   | 336  | 55% | 2 | 47. | 1  |
| 6 |                                | 84, | ,820 |     | 0 | 68% | 4. |
| 5 |                                | 102 |      |     | 3 |     | 36 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Salisbury, MD-DE-VA            | 1   | 363  | 54% | 5 | 44. | 11 |
| 4 |                                | 96, | ,970 |     | 6 | 44% | 1. |
|   |                                | 676 |      |     | 9 |     | 17 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 4 | Johnson                        | 3   | 576  | 54% | 1 | 48. | 14 |
| 5 | City-Kingsport-Bristol, TN-VA  | 09, | ,081 |     | 9 | 78% | 4. |
|   |                                | 456 |      |     | 4 |     | 51 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Cleveland-Akron, OH-PA         | 2,5 | 4    | 54% | 2 | 49. | 42 |
| 5 |                                | 52, | ,692 |     | 2 | 90% | 7. |
|   |                                | 134 | ,460 |     | 6 |     | 84 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Toledo, OH                     | 6   | 1    | 54% | 2 | 48. | 16 |
| 6 |                                | 93, | ,294 |     | 8 | 37% | 3. |
|   |                                | 046 | ,395 |     | 7 |     | 94 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Appleton-Oshkosh-Neenah, WI    | 2   | 433  | 54% | 2 | 48. | 14 |
| 0 |                                | 32, | ,250 |     | 4 | 59% | 3. |
|   |                                | 671 |      |     | 2 |     | 62 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Traverse City, MI              | 1   | 286  | 54% | 4 | 64. | 5  |
| 1 |                                | 55, | ,745 |     | 1 | 26% | 0. |
|   |                                | 942 |      |     | 9 |     | 67 |
|   |                                |     |      |     | 2 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Champaign-Urbana, IL           | 3   | 630  | 54% | 2 | 47. | 7  |
| 8 |                                | 42, | ,898 |     | 9 | 66% | 3. |
|   |                                | 046 |      |     | 2 |     | 47 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | Lake Charles, LA               | 2   | 536  | 54% | 2 | 46. | 5  |
| 6 |                                | 90, | ,758 |     | 6 | 34% | 2. |
|   |                                | 027 |      |     | 8 |     | 41 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Fargo-Moorhead, ND-MN          | 2   | 371  | 54% | 2 | 49. | 1  |
| 1 |                                | 01, | ,691 |     | 8 | 16% | 6. |
| 3 |                                | 437 |      |     | 0 |     | 40 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Santa Fe, NM                   | 1   | 258  | 54% | 3 | 49. | 1  |
| 3 |                                | 38, | ,790 |     | 0 | 07% | 3. |
| 9 |                                | 946 |      |     | 1 |     | 06 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Spokane, WA-ID                 | 4   | 829  | 54% | 2 | 47. | 2  |
| 4 |                                | 48, | ,735 |     | 6 | 83% | 3. |
| 7 |                                | 385 |      |     | 0 |     | 63 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Richland-Kennewick-Pasco, WA   | 3   | 677  | 54% | 2 | 46. | 2  |
| 6 |                                | 63, | ,674 |     | 6 | 13% | 7. |
| 9 |                                | 260 |      |     | 3 |     | 68 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Roanoke, VA-NC-WV              | 4   | 826  | 53% | 1 | 47. | 9  |
| 7 |                                | 41, | ,284 |     | 8 | 18% | 7. |
|   |                                | 807 |      |     | 9 |     | 83 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Fort Wayne, IN                 | 3   | 725  | 53% | 3 | 44. | 15 |
| 6 |                                | 82, | ,847 |     | 2 | 44% | 8. |
|   |                                | 963 |      |     | 7 |     | 50 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Missoula, MT                   | 2   | 399  | 53% | 4 | 45. | 1  |
| 4 |                                | 09, | ,183 |     | 7 | 89% | 0. |
| 6 |                                | 597 |      |     | 6 |     | 79 |
|   |                                |     |      |     | 2 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Rochester, NY-PA               | 7   | 1    | 52% | 3 | 47. | 16 |
|   |                                | 76, | ,493 |     | 5 | 17% | 7. |
|   |                                | 033 | ,518 |     | 3 |     | 21 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Bismarck, ND-MT-SD             | 91, | 175  | 52% | 5 | 46. | 6. |
| 1 |                                | 936 | ,427 |     | 0 | 55% | 26 |
| 2 |                                |     |      |     | 0 |     |    |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Rapid City, SD-MT-NE-ND        | 1   | 213  | 52% | 4 | 44. | 5. |
| 1 |                                | 10, | ,696 |     | 6 | 08% | 04 |
| 5 |                                | 364 |      |     | 7 |     |    |
|   |                                |     |      |     | 2 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Western Oklahoma, OK           | 72, | 139  | 52% | 2 | 46. | 1  |
| 2 |                                | 552 | ,761 |     | 9 | 26% | 2. |
| 6 |                                |     |      |     | 5 |     | 04 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Abilene, TX                    | 1   | 222  | 52% | 3 | 43. | 2  |
| 2 |                                | 16, | ,147 |     | 0 | 07% | 0. |
| 8 |                                | 223 |      |     | 9 |     | 35 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Hobbs, NM-TX                   | 99, | 190  | 52% | 3 | 39. | 1  |
| 3 |                                | 412 | ,340 |     | 1 | 68% | 1. |
| 6 |                                |     |      |     | 9 |     | 21 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Bangor, ME                     | 2   | 526  | 51% | 4 | 41. | 2  |
|   |                                | 68, | ,106 |     | 8 | 79% | 0. |
|   |                                | 257 |      |     | 6 |     | 94 |
|   |                                |     |      |     | 2 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Syracuse, NY-PA                | 9   | 1    | 51% | 3 | 42. | 10 |
|   |                                | 66, | ,902 |     | 4 | 68% | 4. |
|   |                                | 484 | ,640 |     | 6 |     | 74 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 8 | Buffalo-Niagara Falls, NY-PA   | 7   | 1    | 51% | 2 | 44. | 21 |
|   |                                | 73, | ,507 |     | 5 | 76% | 2. |
|   |                                | 113 | ,759 |     | 9 |     | 89 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 4 | Hickory-Morganton, NC-TN       | 2   | 519  | 51% | 2 | 42. | 13 |
| 6 |                                | 65, | ,208 |     | 4 | 34% | 1. |
|   |                                | 245 |      |     | 2 |     | 90 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | Fort Smith, AR-OK              | 1   | 329  | 51% | 3 | 45. | 4  |
| 1 |                                | 66, | ,136 |     | 6 | 10% | 6. |
|   |                                | 614 |      |     | 5 |     | 51 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | Jonesboro, AR-MO               | 1   | 303  | 51% | 4 | 46. | 5  |
| 5 |                                | 54, | ,852 |     | 6 | 07% | 1. |
|   |                                | 723 |      |     | 5 |     | 30 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Anchorage, AK                  | 3   | 626  | 51% | 4 | 46. | 1. |
| 7 |                                | 21, | ,932 |     | 4 | 30% | 07 |
| 1 |                                | 147 |      |     | 3 |     |    |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 6 | Elkhart-Goshen, IN-MI          | 4   | 936  | 50% | 2 | 42. | 18 |
| 5 |                                | 65, | ,245 |     | 1 | 39% | 5. |
|   |                                | 200 |      |     | 9 |     | 73 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | McAllen-Edinburg-Mission, TX   | 4   | 978  | 50% | 2 | 40. | 22 |
| 3 |                                | 90, | ,369 |     | 9 | 89% | 1. |
| 3 |                                | 439 |      |     | 0 |     | 96 |
|   |                                |     |      |     | 2 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 9 | State College, PA              | 3   | 809  | 49% | 3 | 41. | 9  |
|   |                                | 92, | ,979 |     | 7 | 15% | 2. |
|   |                                | 843 |      |     | 2 |     | 41 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Grand Forks, ND-MN             | 1   | 230  | 49% | 3 | 44. | 1  |
| 1 |                                | 13, | ,253 |     | 9 | 30% | 0. |
| 0 |                                | 930 |      |     | 7 |     | 16 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Pueblo, CO-NM                  | 1   | 279  | 49% | 2 | 42. | 8. |
| 4 |                                | 35, | ,600 |     | 3 | 03% | 71 |
| 0 |                                | 990 |      |     | 8 |     |    |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | El Paso, TX-NM                 | 4   | 955  | 49% | 2 | 40. | 3  |
| 5 |                                | 72, | ,602 |     | 1 | 90% | 3. |
| 7 |                                | 875 |      |     | 3 |     | 04 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Duluth-Superior, MN-WI         | 1   | 350  | 48% | 3 | 45. | 1  |
| 0 |                                | 69, | ,059 |     | 7 | 38% | 8. |
| 9 |                                | 644 |      |     | 2 |     | 53 |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Sioux City, IA-NE-SD           | 1   | 252  | 48% | 3 | 39. | 3  |
| 1 |                                | 21, | ,656 |     | 4 | 92% | 9. |
| 7 |                                | 534 |      |     | 3 |     | 51 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 4 | Burlington, VT-NY              | 2   | 605  | 47% | 4 | 39. | 5  |
|   |                                | 86, | ,393 |     | 6 | 36% | 7. |
|   |                                | 981 |      |     | 8 |     | 62 |
|   |                                |     |      |     | 6 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 4 | Lexington, KY-TN-VA-WV         | 8   | 1    | 47% | 2 | 39. | 8  |
| 7 |                                | 65, | ,851 |     | 2 | 30% | 0. |
|   |                                | 432 | ,367 |     | 2 |     | 39 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Paducah, KY-IL                 | 1   | 226  | 46% | 6 | 36. | 7  |
| 2 |                                | 04, | ,586 |     | 1 | 16% | 0. |
|   |                                | 416 |      |     | 3 |     | 02 |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Wausau, WI                     | 2   | 487  | 45% | 2 | 37. | 3  |
| 0 |                                | 20, | ,723 |     | 3 | 28% | 4. |
| 8 |                                | 454 |      |     | 1 |     | 13 |
|   |                                |     |      |     | 4 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 4 | Charleston, WV-KY-OH           | 5   | 1    | 44% | 2 | 37. | 8  |
| 8 |                                | 32, | ,199 |     | 3 | 88% | 5. |
|   |                                | 973 | ,373 |     | 2 |     | 35 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Erie, PA                       | 2   | 519  | 44% | 4 | 38. | 11 |
| 4 |                                | 28, | ,348 |     | 0 | 67% | 6. |
|   |                                | 329 |      |     | 4 |     | 41 |
|   |                                |     |      |     | 9 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | La Crosse, WI-MN               | 1   | 241  | 44% | 4 | 36. | 5  |
| 0 |                                | 06, | ,903 |     | 0 | 98% | 3. |
| 5 |                                | 090 |      |     | 4 |     | 67 |
|   |                                |     |      |     | 5 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Great Falls, MT                | 73, | 166  | 44% | 4 | 39. | 4. |
| 4 |                                | 428 | ,564 |     | 2 | 15% | 23 |
| 5 |                                |     |      |     | 9 |     |    |
|   |                                |     |      |     | 0 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Pendleton, OR-WA               | 86, | 200  | 43% | 3 | 38. | 8. |
| 6 |                                | 350 | ,681 |     | 3 | 00% | 67 |
| 8 |                                |     |      |     | 2 |     |    |
|   |                                |     |      |     | 7 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Wheeling, WV-OH                | 1   | 327  | 42% | 4 | 37. | 12 |
| 2 |                                | 36, | ,645 |     | 1 | 54% | 4. |
|   |                                | 660 |      |     | 8 |     | 54 |
|   |                                |     |      |     | 8 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 7 | Greenville, MS                 | 1   | 252  | 40% | 3 | 39. | 4  |
| 6 |                                | 01, | ,280 |     | 4 | 54% | 0. |
|   |                                | 760 |      |     | 1 |     | 96 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 5 | Northern Michigan, MI          | 1   | 269  | 38% | 4 | 44. | 2  |
| 8 |                                | 01, | ,986 |     | 5 | 38% | 8. |
|   |                                | 308 |      |     | 6 |     | 53 |
|   |                                |     |      |     | 3 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | San Angelo, TX                 | 75, | 202  | 37% | 2 | 42. | 1  |
| 2 |                                | 956 | ,679 |     | 8 | 11% | 0. |
| 9 |                                |     |      |     | 7 |     | 05 |
|   |                                |     |      |     | 1 |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+
| 1 | Aberdeen, SD                   | \*  | 82   | \*  | \ | \*  | 5. |
| 1 |                                |     | ,608 |     | * |     | 39 |
| 4 |                                |     |      |     |   |     |    |
+---+--------------------------------+-----+------+-----+---+-----+----+

\* Data withheld to maintain firm confidentiality.

Source: Federal Communications Commission internal analysis based on
preliminary year-end 2004 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 2003                      Year-End 2004            

       Operator                Total      Operator                 Total

  1    Verizon Wireless        37,522     Cingular Wireless (2)    49,109

  2    Cingular Wireless       24,027     Verizon Wireless         43,816

  3    AT&T Wireless           21,980     Sprint PCS (3)(4)        21,507

  4    Sprint PCS              15,900     T-Mobile                 17,314

  5    T-Mobile                13,128     Nextel (3) (5)           16,247

  6    Nextel                  12,882     ALLTEL (6)               8,626

  7    ALLTEL                  8,023      US Cellular              4,945

  8    US Cellular             4,409      Dobson Comm.             1,609

  9    Dobson Comm.            1,552      Nextel Partners          1,602

  10   Leap Wireless           1,473      Leap                     1,569

  11   Western Wireless        1,290      MetroPCS (7)             1,500

  12   Nextel Partners         1,233      Western Wireless (6)     1,395

  13   Centennial (1)          997        Centennial (8)           1,098

  14   MetroPCS                977        Triton PCS (now Suncom)  951

  15   Triton PCS              895        Alamosa PCS (9)          915

  16   Qwest                   871        Qwest (10)               754

  17   Rural Cellular          746        Rural Cellular           730

  18   Alamosa PCS             727        Cincinnati Bell Wireless 481

  19   US Unwired              618        US Unwired               469

  20   Cincinnati Bell         474        Cellular South           400
       Wireless                                                    

  21   Cellular South          400        AirGate PCS (9)          400

  22   AirGate PCS             360        Midwest Wireless         400

  23   Midwest Wireless        350        Ubiquitel                497

  24   Ubiquitel               328        SouthernLINC             260

  25   Southern LINC           260        iPCS (11)                249
  ---- ----------------------- ---------- ------------------------ --------

Sources: For 2003, *see* *Ninth Report*, at 20697. For 2004, publicly
available company documents such as operators' news releases and filings
made with the Securities and Exchange Commission. SouthernLINC,
*Frequently Asked Questions* (visited June 15, 2005)
\<http://www.solinc.com/faqs.asp\> (Southern LINC); Midwest Wireless,
Company Facts (visited June 15, 2005)
\<http://www.midwestwireless.com/Home/AboutUs/CompanyFacts.htm\>
(Midwest Wireless); Rhonda Wickham, *Down Home In The Cellular South*,
[WirelessWeek]{.smallcaps}, Mar. 22, 2004 (Cellular South); MetroPCS,
*MetroPCS Announces Signing of 1.5 Millionth Customer,* News Release,
Feb. 28, 2005 (MetroPCS)

Notes

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

(2) Cingular Wireless acquired AT&T Wirelesss in November 2004. *See*
    Section 1, Sales and Swaps, *supra*.

(3) On August 12, 2005, Sprint PCS completed its merger with Nextel.
    *See* Section 1, Sales and Swaps, *supra*.

(4) Includes retail (17.8 million) and wholesale (3.7 million)
    subscribers, including Virgin Mobile and Qwest.

(5) Includes Nextel subsidairy Boost Mobile.

(6) On August 1, 2005, ALLTEL completed its acquisition of Western
    Wireless. *See* Section 1, Sales and Swaps, *supra*.

(7) As of Feb. 28, 2005.

(8) On Feb. 15, 2005, Alamosa completed its acquisition of AirGate PCS.
    *See* note Error: Reference source not found, *supra*.

(9) 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.

(10) On July 1, 2005, iPCS completed its merger with Horizon PCS,
     another Sprint PCS affiliate. *See* note Error: Reference source
     not found, *supra*. Horizon PCS reported 189,000 subscribers as of
     Dec. 31, 2004.

**Table 5: 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     2501        276,607,548   96.9%     2,252,631    62.5%

  4 or More     1994        265,843,377   93.2%     1,741,091    48.3%

  5 or More     1500        249,136,025   87.3%     1,255,885    34.8%

  6 or More     770         117,882,887   41.3%     609,148      16.9%

  7 or More     268         35,951,710    12.6%     210,433      5.8%
  ------------- ----------- ------------- --------- ------------ ---------

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

Notes:

(1) POPs from the 2000 Census;

(2) United States and Puerto Rico

**Table 6: Mobile Telephone Digital Coverage**

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

  CDMA               279,966,795     98.1%      3,017,538      83.7%

  TDMA / GSM         277,837,880     97.4%      2,445,612      67.8%

  iDEN               262,564,508     92.0%      1,707,650      47.3%

  Total Digital      284,904,797     99.8%      3,211,352      89.0%
  ------------------ --------------- ---------- -------------- ------------

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").

POPs from the 2000 Census.

**Table 7: 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%

                                                                                                    

  Dec            17.7%               -33.8%               -4.2%                25.1%                -29.1%
  1997                                                                                              
  to                                                                                                
  2004                                                                                              
  ------ ------- -------- ---------- -------- ----------- -------- ----------- -------- ----------- --------

Source: Bureau of Labor Statistics.

**Table 8: 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%
  ------------ ------------- ------------- ---------------- ---------------

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

Source: *See* Appendix A, Table 1, at A-2 (ARPU); *Dec 2004 CTIA
Survey*, at 219 (minutes of use).

**Table 9: Market Entry Over Time**

  ------------- --------- --------- --------- --------- --------- ---------
                Percent                                           
                of Total                                          
                US POPs                                           
                Covered                                           

  Total Number  Tenth     Ninth     Eighth    Seventh   Sixth     Fifth
  of Providers  Report    Report    Report    Report    Report    Report
  in a County                                                     

  3 or more     96.9%     96.8%     94.7%     94.1%     90.8%     87.8%

  4 or more     93.2%     93.0%     89.3%     88.7%     84.4%     79.8%

  5 or more     87.3%     87.5%     82.6%     80.4%     75.1%     68.5%

  6 or more     41.3%     75.8%     71.1%     53.1%     46.7%     34.6%

  7 or more     12.6%     29.5%     25.4%     21.2%     11.9%     4.4%
  ------------- --------- --------- --------- --------- --------- ---------

Source: FCC estimates

**Table 10: Mobile Market Structure and Performance**

**in Selected Countries**

+-----------+----------+--------------+------+-----------+------------+
| Country   | Number   | Penetration  | MOUs | Revenue   | Data       |
|           | of       | (%)          |      | per       |            |
|           |          |              |      |           | (% of      |
|           | Players  |              |      | Minute    | ARPU)      |
|           |          |              |      | (\$)      |            |
+-----------+----------+--------------+------+-----------+------------+
| **Mobile  |          |              |      |           |            |
| Party     |          |              |      |           |            |
| Pays**    |          |              |      |           |            |
+-----------+----------+--------------+------+-----------+------------+
| USA       | 5+       | 61           | 630  | 0.08      | 6          |
+-----------+----------+--------------+------+-----------+------------+
| Canada    | 3        | 47           | 359  | 0.11      | 7          |
+-----------+----------+--------------+------+-----------+------------+
| Hong Kong | 6        | 106          | 387  | 0.06      | 9          |
+-----------+----------+--------------+------+-----------+------------+
| Singapore | 3        | 90           | 282  | 0.10      | 18         |
+-----------+----------+--------------+------+-----------+------------+
| **Calling |          |              |      |           |            |
| Party     |          |              |      |           |            |
| Pays**    |          |              |      |           |            |
+-----------+----------+--------------+------+-----------+------------+
| UK        | 5        | 104          | 151  | 0.22      | 20         |
+-----------+----------+--------------+------+-----------+------------+
| Germany   | 4        | 87           | 76   | 0.35      | 18         |
+-----------+----------+--------------+------+-----------+------------+
| Italy     | 4        | 110          | 120  | 0.26      | 14         |
+-----------+----------+--------------+------+-----------+------------+
| France    | 3        | 74           | 225  | 0.17      | 13         |
+-----------+----------+--------------+------+-----------+------------+
| Spain     | 3        | 99           | 135  | 0.27      | 13         |
+-----------+----------+--------------+------+-----------+------------+
| Finland   | 3        | 95           | 258  | 0.16      | 13         |
+-----------+----------+--------------+------+-----------+------------+
| Japan     | 3+       | 71           | 154  | 0.32      | 24         |
+-----------+----------+--------------+------+-----------+------------+
| South     | 3        | 76           | 316  | 0.10      | 17         |
| Korea     |          |              |      |           |            |
+-----------+----------+--------------+------+-----------+------------+
| Australia | 4        | 89           | 168  | 0.21      | 13         |
+-----------+----------+--------------+------+-----------+------------+

Sources: Glen Campbell *et al*., *Global Wireless Matrix 4Q04*, Global
Securities Research & Economics Group, Merrill Lynch, Apr. 13, 2005. The
reason for distinguishing countries that use calling party pays ("CPP")
from those that use mobile party pays is that CPP may contribute to
higher mobile penetration, lower usage, and higher revenue per minute in
CPP countries. *See* Section VI.D, International Comparisons, *supra*.

**APPENDIX B**

**Maps**

**Table of Contents**

Map 1: Mobile Telephone Operator Coverage Estimated by County 91

Map 2: A-Side Cellular Coverage 92

Map 3: B-Side Cellular Coverage 93

Map 4: Mobile Telephone Penetration Estimated by Economic Area 94

Map 5: Estimated Rollout with Any Digital Coverage 95

Map 6: Estimated Rollout with CDMA-Based Coverage 96

Map 7: Estimated Rollout with TDMA/GSM-Based Coverage 97

Map 8: Estimated Rollout with iDEN-Based Coverage 98

Map 9: Estimated Rollout of Next Generation Networks 99

Table 1: Geographic Licensing Schemes 100

Map 10: Basic Trading Areas 101

Map 11: Major Trading Areas 102

Map 12: Cellular Market Areas 103

Map 13: Economic Areas 104

**Map 1**

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

**Map 2**

![](media/image3.png){width="6.49375in" height="8.403472222222222in"}

**Map 3**

![](media/image4.png){width="6.49375in" height="8.403472222222222in"}

**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"}

**Map 9**

![](media/image10.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 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"}

**Map 13**

![](media/image14.png){width="6.49375in" height="8.403472222222222in"}

**APPENDIX C**

**List of Commenters**

[Comments]{.underline}

CTIA-The Wireless Association

TracFone Wireless, Inc.

Leaco Rural Telephone Cooperative, Inc. (Bennet & Bennet)

Public Service Communications (Bennet & Bennet)

Artic Slope Telephone Association Cooperative, Inc. (Bennet & Bennet)

Mid-Tex Celllular, Ltd. (Bennet & Bennet)

Great Lakes of Iowa, Inc. (Bennet & Bennet)

National Telecommunications Cooperative Association

[Replies to Comments]{.underline}

Dobson Communications Corporation

Leap Wireless International, Inc.

T-Mobile of USA, Inc.

Virgin Mobile USA, LLC

SouthernLINC Wireless

**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.*

This is the tenth year we have issued a Report on wireless competition
in America. I am pleased that the quality of these reports is
improving---as, for example, in the competition analysis that we
conduct. But we're not all the way there yet, and I concur because of
arguments and omissions that continue to concern me.

In requiring these Reports, Congress tasked us with doing an "analysis
of whether or not there is effective competition" in commercial mobile
services. Yet we still fail to define "effective competition" -- and
this limits the ability of the Commission and the Congress to rely on
our results. I also remain troubled by our inability truly to assess
coverage for rural communities. The Report states that ninety-seven
percent of Americans live in counties with three or more
competitors---but that does not mean that all residents of a county
actually have access to three or more competitors. It could mean---and
we lack the data to know---that access is focused along a highway that
cuts through a county. Going forward, the Commission needs to look for
additional data sources so that we can more accurately assess rural
coverage in future Reports.

The Report further claims that consumers do not face difficulties
obtaining the information they need. Why then do we continue to receive
consumer complaints about wireless services, including complaints about
confusing wireless bills, hidden and expensive fees, and service maps
that do not adequately allow consumers to determine where they will get
service?

Notwithstanding the concerns I have expressed, we should recognize that
the Report shows that more consumers have mobile phones than ever before
and consumers benefit as carriers introduce innovative offerings and
pricing plans and roll out new services. It is because of the growing
importance of these technologies and services that the Commission needs
to do the best possible job of studying and monitoring developments.
Increasing consolidation in the industry also argues in favor of making
sure that improvements continue and that we avoid problems that could
harm consumers and competition.

[^1]: Consequently, while the report acknowledges that the Sprint-Nextel
    and Alltel-Western Wireless mergers have occurred, these
    transactions closed too recently for their effects to be reflected
    in the indicators of market structure, carrier conduct, and market
    performance. However, the structural changes resulting from these
    transactions, and their potential impact on carrier conduct and
    market performance, will be reflected in future reports.

[^2]: 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).

[^3]: 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).

[^4]: 47 U.S.C. § 332(c)(1)(C).

[^5]: *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*"). The reports can also be found on the FCC's website at
    \<http://wireless.fcc.gov/cmrs-crforum.html\>.

[^6]: 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.

[^7]: 47 U.S.C. § 332 (c)(1)(C).

[^8]: *Ninth Report*, at 20602-20603 and 20607.

[^9]: WTB Seeks Comment on CMRS Market Competition, WT Docket No. 05-71,
    *Public Notice,* 20 FCC Rcd 4073 (2005) ("*Tenth CMRS PN*"). *See
    also*, 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*").

[^10]: *See* Appendix C, *infra*, for a list of parties that filed
    comments in response to the *Tenth CMRS PN*.

[^11]: *See* CTIA-The Wireless Association, *PN* *Comments*, at ii, 2-3
    (filed Mar. 28, 2005) ("CTIA Comments"); T-Mobile USA, Inc., *PN
    Reply Comments*, at 1-2 (filed Apr. 12, 2005) ("T-Mobile Reply
    Comments").

[^12]: T-Mobile Reply Comments, at 6.

[^13]: Tracfone Wireless, Inc., *PN Comments*, at 3 (filed Mar. 29,
    2005) ("Tracfone Comments"); Virgin Mobile USA, LLC, *PN Reply
    Comments*, at 5 (filed Apr. 12, 2005) ("Virgin Mobile Reply
    Comments").

[^14]: The Public Forum was held in order to examine ways in which to
    better gather and analyze data for the CMRS Competition Reports, in
    particular data regarding the development of competition in rural
    and underserved areas. *See* 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*"). Forum participants not only provided additional
    data, including data on the average price of mobile telephone
    service in rural areas, but also presented suggestions on how to
    analyze data more effectively. Research organizations and agencies
    offered insight into the methodologies they use to gather and
    analyze data, and the wireless carriers offered anecdotes on the
    competitive pressures that their companies face. The Commission
    incorporated these data, suggestions, and insights into the *Seventh
    Report*.

[^15]: *See* Section VI.A.1, Pricing Trends, *infra.*

[^16]: *See* CTIA, *Wireless Industry Indices: Semi-Annual Data Survey
    Results* (results through December 2004) ("*Dec 2004 CTIA Survey*").
    *See* note Error: Reference source not found, *infra*, for a
    discussion of data reported by CTIA.

[^17]: *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.

[^18]: *See Seventh Report*, at 13005, 13049.

[^19]: 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.

[^20]: *Seventh Report*, at 13005; *See* Section VI.B.4, Sub-National
    Penetration Rates, *infra*.

[^21]: *Ninth Report*, at 20618-20620.

[^22]: 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*.

[^23]: *See* Section III.C.1, Number of Mobile Telephone Competitors,
    *infra.*

[^24]: 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.

[^25]: BTAs can be sub-divided into counties. The United States is made
    up of approximately 3,200 counties versus 493 BTAs.

[^26]: 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/\>.

[^27]: 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.

[^28]: *See Eighth Report*, at 14792.

[^29]: 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.

[^30]: *See* 47 C.F.R. §§ 22.900, 24.200, 90.601.

[^31]: 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.

[^32]: 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.

[^33]: 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.

[^34]: 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.

[^35]: The L-Band has MSS allocations at 1525-1559 MHz (downlink) and
    1626.5-1660.5 MHz (uplink).

[^36]: *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"*).

[^37]: *Satellite Flexibility Order*, at 1984.

[^38]: Mobile Satellite Ventures Subsidiary LLC, *Order and
    Authorization*, 19 FCC Rcd 22144 (Int'l Bur. 2004).

[^39]: Sprint PCS is a division of Sprint Corp. ("Sprint"). *See* Sprint
    Corp., SEC Form 10-K/A, Apr. 29, 2005.

[^40]: 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, 2005, at 12.

[^41]: T-Mobile USA, formerly known as VoiceStream Wireless Corp., is a
    wholly-owned subsidiary of Deutsche Telekom AG ("Deutsche Telekom").

[^42]: Cingular Wireless is a joint venture of SBC Communications, Inc.
    ("SBC") and BellSouth Corporation ("BellSouth"). *See* *Sixth
    Report*, at 13363-64.

[^43]: *Wireless 411*, at 11.

[^44]: Due to its large customer base but limited geographical scope,
    some analysts refer to ALLTEL as a "super-regional." *See, e.g.,*
    Dan Meyer, *ALLTEL to pick up Western Wireless for \$6 billion*,
    [RCR Wireless News]{.smallcaps}, Jan. 17, 2005, at 1 ("Merger-mania
    trickled down the food chain last week as super-regional operator
    Alltel Corp. said it had reached an agreement to buy rural operator
    Western Wireless Corp. for approximately \$6 billion"). 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.

[^45]: Interconnection and Resale Obligations Pertaining to Commercial
    Mobile Radio Services, *First Report and Order*, 11 FCC Rcd 18455,
    18457 (1996).

[^46]: Virgin Mobile Reply Comments, at 4-5.

[^47]: *See* Appendix A, Table 2, *infra*; *Ninth Report*, at 20614.

[^48]: Jason Armstrong, *et al*., *Shades of Grey in Prepaid*, Goldman
    Sachs, Equity Research, Apr. 12, 2005, at 11 (footnote 2 in Exhibit
    6: 4Q2004 net addition analysis).

[^49]: [Communications Daily]{.smallcaps}, Jun. 5, 2005, at 8 (citing a
    study by Atlantic-ACM).

[^50]: TracFone Comments*,* at 2.

[^51]: That is, without an equity interest from a facilities-based
    carrier.

[^52]: *See* Section 2, Prepaid Service, *infra*, discusses some of the
    reasons for this increased interest.

[^53]: *See* Virgin Mobile Reply Comments, at 1. For a detailed
    discussion of the venture, *see Seventh Report*, at 13026.

[^54]: Virgin Mobile Reply Comments, at 2.

[^55]: *See Ninth Report,* at 20627-20628.

[^56]: *Ninth Report*, at 20615. SBC's attempt to acquire AT&T, plus
    AT&T's decision to no longer market to consumers, might change those
    plans. John Byrne, *Wireless Industry '05: Fewer Networks, More
    Labels*, [Kagan Wireless Market Stats]{.smallcaps}, Jan. 31, 2005,
    at 2; Frank J. Governali *et al*., *Global Telecom Weekly*, Goldman
    Sachs, Equity Research, Aug. 27, 2004, at 4.

[^57]: Simon Flannery *et al*., *Prepaid Wireless: Revisiting a Diamond
    in the Rough*, Morgan Stanley Equity Research, Apr. 6, 2005, at 9
    ("*Diamond in the Rough*").

[^58]: *Korea\'s SK Telecom, Earthlink Form U.S. Venture*,
    [Reuters]{.smallcaps}, Mar. 25, 2005; John Byrne, *Wireless Industry
    '05: Fewer Networks, More Labels*, [Kagan Wireless Market
    Stats]{.smallcaps}, Jan. 31, 2005, at 2

[^59]: John Byrne, *Wireless Industry '05: Fewer Networks, More Labels*,
    [Kagan Wireless Market Stats]{.smallcaps}, Jan. 31, 2005, at 2.
    *See*, *also*, Sinead Carew, *Virgin Making Mark Among Mobile
    Services*, [Reuters]{.smallcaps}, Oct. 2, 2004. In July 2005, Disney
    and Sprint announced an agreement to launch a family-oriented MVNO
    on Sprint PCS' network, to be called "Disney Mobile." The service,
    aimed at \"the unique communication needs of families,\" is planned
    for launch in 2006. *Sprint, Disney will offer wireless service for
    families*, [bizjournals.com]{.smallcaps}, July 6, 2005. In December
    2004, ESPN, which is majority-owned by Disney, announced a similar
    deal with Sprint, targeting sports fans with sports content on their
    ESPN-branded wireless phones. Jesse Drucker and Merissa Marr,
    *Disney to Enter Cellphone Market, With Kids in Mind*, [Wall Street
    Journal]{.smallcaps}, July 6, 2005, at D5.

[^60]: John Byrne, *Kagan Ups Wireless Data Forecast*, [Kagan Wireless
    Telecom Investor]{.smallcaps}, Jun. 6, 2005, at 1. Firefly is
    selling the device with prepaid service through Suncom Wireless and
    Cincinnati Bell Wireless. The company also sells it on their Web
    site for \$100 (with 30 prepaid minutes). Target stores began
    selling Firefly in the summer of 2005 with service from Cingular.
    Gary Krakow, *This isn\'t Your Father\'s Cell Phone*,
    [MSNBC.com]{.smallcaps}, Mar. 14, 2005. *See*, *also*,
    http://www.fireflymobile.com/. "The Firefly phone is a pioneering
    voice-only phone designed for the smaller hands of kids aged eight
    to 12 years old. With just five keys instead of a regular dial pad,
    parents use a PIN to program up to 22 outgoing numbers into the
    phone, including speed-dial keys for Mom and Dad. The patented phone
    lights up like a firefly when in use and intermittently when in
    standby mode. It is about the size of a small pocket calculator and
    weighs two ounces." Firefly Mobile, *Firefly Mobile Announces
    Firefly Phone for Tweens*, News Release, Mar. 9, 2005.

[^61]: Nextel, SEC Form 10-K (filed Mar. 15, 2005), at 2. Boost Mobile
    used to be joint venture between Nextel and an Australian-based
    company. *See* *Ninth Report*, at 20615.

[^62]: Nextel, SEC Form 10-K (filed Mar. 15, 2005), at 1. Boost Mobile
    accounted for 26 percent of Nextel's new subscribers in 2004. Li
    Yuan, *Pay First, Call Later*, [Wall Street Journal]{.smallcaps},
    Apr. 25, 2005, at R10 ("*Pay First*").

[^63]: *See* Section IV.B.1.e, inf*ra*; Wireless Broadband Access Task
    Force, Federal Communications Commission, GN Docket No. 04-163,
    Report (rel. February 2005), at 23 ("*Wireless Broadband Access Task
    Force Report*"); Clearwire, *Now Serving/Coming Soon* (visited
    August 2, 2005) \<http://www.clearwire.com\> (indicating that the
    markets currently served by Clearwire include Daytona Beach, FL;
    Abilene, TX: Midland/Odessa, TX; Duluth, MN; St. Cloud, MN; Eau
    Claire, WI; Eugene, OR; Medford, OR; Stockton, CA; Modesto, CA;
    Merced, CA; and Visalia, CA).

[^64]: Clearwire, *Service Plans* (visited June 3, 2005)
    \<http://www.clearwire.com\>.

[^65]: *Id.*; "Delivering the Future of Broadband Wireless Today,"
    Presentation by Guy Kelnhofer, President and CEO, NextNet Wireless,
    submitted at the Wireless Broadband Forum, May 19, 2004, Federal
    Communications Commission, Washington, DC.

[^66]: *See* Section IV.B.1.e, *infra*, for a more detailed discussion
    of OFDM technology*.*

[^67]: *See* Section IV.B.1.e, *infra.*

[^68]: SkyTel Communications, Inc. is a wholly owned subsidiary of MCI
    (formerly WorldCom) that was acquired on October 1, 1999. *See Fifth
    Report*, at 17720-17721. Mike Dano, *Nationwide paging down to one
    carrier,* RCR WIRELESS NEWS, Apr. 5, 2004, at 3+.

[^69]: *See* Brad Smith, *Early Data Models Drain Finances*, [Wireless
    Week]{.smallcaps}, Apr. 15, 2004 ("Early Data Models Drain
    Finances").

[^70]: *Space Data's SkySite® Network Takes Off Over South-Central
    U.S.*, Press Release, Space Data Corporation, Oct. 19, 2004. *See*
    Section IV.B.1.e, *infra.*

[^71]: 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.

[^72]: This data is not based on information that is subject to a
    protective order.

[^73]: The Commission has buildout rules for geographic area licenses,
    although they 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.

[^74]: All population figures are based on the Bureau of the Census's
    2000 county population.

[^75]: *See* Appendix B, Maps 2-3, *infra*. By overlapping cellular
    Service Area Boundaries (SABs) over census block groups, we found
    that less than one-tenth of one percent of the US population lacked
    cellular coverage. FCC internal analysis. Wireless coverage is so
    pervasive, in fact, that the Wall Street Journal ran an article
    rating hotels on their *lack* of wireless service for those who
    desire to get away from it all. Nancy Keates and Shawn Young,
    *Destination: Unreachable*, [Wall Street Journal]{.smallcaps}, Apr.
    23, 2004, at W1.

[^76]: 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*.

[^77]: *See* Appendix A, Table 5, *infra*.

[^78]: *Id.* We note that the land area of these counties, 2.2 million
    square miles, is almost 50 percent larger than the combined land
    area of the 25 member countries of the recently expanded European
    Union (1.5 million square miles).

[^79]: *See* Appendix A, Table 9, *infra*.

[^80]: *See* Section D, Consolidation and Exit, *infra*. In the coming
    year, we will track the effects of more recent mergers on market
    structure, carrier conduct, consumer behavior, and market
    performance.

[^81]: 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.

[^82]: 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 \[(40)^2^ + (20)^2^ x 3\].

[^83]: The methodology used to compile NRUF data is described in Section
    4, Sub-National Penetration Rates.

[^84]: *See* Section 4, Sub-National Penetration Rates, *infra*. The use
    of EAs also minimizes the distortions from the use of NRUF data. In
    addition to the limitations of the NRUF data, 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.

[^85]: 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.

[^86]: *See* Appendix A, Table 3, *infra*. The simple mean (not weighted
    by population) is 2901.

[^87]: 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.

[^88]: Glen Campbell *et al*., *Global Wireless Matrix 4Q04*, Merrill
    Lynch, Global Securities Research & Economics Group, Apr. 13, 2005,
    at 3 ("*Global Wireless Matrix 4Q04*").

[^89]: At this writing, however, leading Dutch mobile operator KPN has
    agreed to acquire smaller mobile operator Telfort, while Deutsche
    Telekom has agreed to acquire Austrian mobile provider Tele.ring and
    plans to fold the company into its T-Mobile Austria unit. *See*
    Stefan Simons, *KPN Agrees to Acquire Telfort for \$1.19 Billion,*
    [Wall Street Journal]{.smallcaps}, June 29, 2005; *Deutsche Telekom
    to Acquire Teler.ring for \$1.61 Billion,* [Wall Street
    Journal,]{.smallcaps} Aug. 10, 2005. If approved, these transactions
    would reduce the number of national mobile operators in the
    Netherlands and Austria from five to four.

[^90]: MerrilI Lynch indicates that there are seven players in the
    Japanese mobile market. *See* *Global Wireless Matrix 4Q04,* at 3.
    However, there are only three main operators providing nationwide
    cellular mobile phone services. *See* Lara Srivastava, *Shaping the
    Future Mobile Information Society: The Case of Japan*, Document
    SMIS/06, International Telecommunications Union, Feb. 26, 2004, at
    15. Apart from the three main providers of cellular mobile services,
    there are three operators providing an alternative mobile service
    based on a mobile phone system called personal handyphone system
    ("PHS"). Relative to cellular service, however, PHS has limited
    coverage and is primarily a cordless phone. Launched in 1995, PHS
    initially had a rapid uptake, but the number of subscribers later
    declined, and it now accounts for a small fraction of the total
    mobile service market in Japan. *Id*. In addition, of the three PHS
    operators, until recently two were affiliated with nationwide
    providers of cellular mobile phone services. *Id*., at 11.

[^91]: There are also some exceptions among emerging markets, including
    Taiwan (six mobile operators) and Indonesia (seven). *Global
    Wireless Matrix 4Q04*, at 3.

[^92]: The subscriber shares used to calculate HHIs for European mobile
    markets were taken from *Global Wireless Matrix 4Q04*, at 74, 76,
    78, 94, 104, 126, and 138.

[^93]: *Global Wireless Matrix 4Q04*, at 3. In some West European and
    Asian countries, including Norway, Iceland, Switzerland, and Japan,
    the dominant mobile operator accounts for more than half of the
    mobile subscribers in the market. Additionally, in some of these
    countries the incumbent wireline operator is also the dominant
    mobile operator. *See* *Communications Outlook 2005*, Organization
    for Economic Cooperation and Development, 2005, at 46 ("*OECD
    Communications Outlook 2005*").

[^94]: *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.

[^95]: *See* Jonathan B. Baker, *Developments in Antitrust Economics*,
    [Journal of Economic Perspectives]{.smallcaps}, Vol. 13, No. 1,
    Winter 1999, at 182.

[^96]: 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*").

[^97]: 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.

[^98]: 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.

[^99]: The Commission must consent to the transfer of control or
    assignment of all spectrum licenses used to provide wireless
    telecommunications services. 47 C.F.R. § 1.948.

[^100]: *See Fifth Report*, at 17699 (For a complete discussion of the
    motivations for this phenomenon, *see Fourth Report*, at
    10159-10160).

[^101]: *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.

[^102]: For a more complete discussion of the motivations for this
    phenomenon, s*ee Fourth Report*, at 10159-10160.

[^103]: *Cingular Completes Merger With AT&T Wireless*, News Release,
    Cingular Wireless, Oct. 26, 2004. *See*, *also*, *Ninth Report*, at
    20623.

[^104]: Applications of AT&T Wireless Services, Inc., Transferor, and
    Cingular Wireless, Corp., Transferee, *Memorandum Opinion and
    Order*, 19 FCC Rcd 21522, 21543 (2004) (DOJ conditions); 21619-21622
    (FCC conditions) ("*Cingular-AT&T Wireless Order*").

[^105]: *See* *Ninth Report*, at 20625.

[^106]: In addition, the agreement waived the non-compete clause with
    Cingular, and the company received reduced roaming rates on
    Cingular's networks. *Cincinnati Bell Inc. Reaches Agreement with
    Cingular and AT&T Wireless on Wireless Services in Cincinnati and
    Dayton*, News Release, Cincinnati Bell, Aug. 5, 2004.

[^107]: In 2005, Triton PCS, Inc. changed its name to SunCom Wireless,
    Inc. Suncom Wireless, SEC Form 10-K, Mar 31, 2005, at F-7.

[^108]: *Cingular, AT&T Wireless And Triton PCS Sign Letter Of Intent To
    Exchange Operations In N. Carolina, Puerto Rico and Virginia*, News
    Release, Triton PCS and Cingular Wireless, July 8, 2004. Under the
    terms of the agreement, Cingular would receive Suncom's network
    assets and customers in Virginia, while Suncom would receive certain
    (formerly) AT&T Wireless network assets and customers in North
    Carolina and Puerto Rico, plus \$175 million in cash from Cingular.
    Additionally, the companies terminated their exclusivity
    arrangement.

[^109]: *ALLTEL to Purchase Western Wireless in \$6 Billion
    Transaction*, News Release, ALLTEL, Jan. 10, 2005.

[^110]: *Id.*

[^111]: *Id.*

[^112]: FCC Consents With Conditions To ALLTEL Corporation Acquisition
    of Western Wireless Corporation Licenses and Authorizations, *News
    Release*, FCC, July 11, 2005.

[^113]: *Id*.; *FCC Approves ALLTEL Merger with Western Wireless*, News
    Release, ALLTEL, July 11, 2005. The DOJ approved the merger
    contingent upon divesting 16 markets in Arkansas, Kansas and
    Nebraska now owned and operated by Western Wireless. The divestiture
    includes all the assets -- licenses, retail stores, employees and
    cell sites -- used to operate Western Wireless's CDMA wireless
    business in those markets. The company also will divest the Cellular
    One brand that is owned by Western Wireless. *FCC Approves ALLTEL
    Merger with Western Wireless*, News Release, ALLTEL, July 11, 2005.

[^114]: *ALLTEL completes merger with Western Wireless*, News Release,
    ALLTEL, Aug. 1, 2005.

[^115]: *Sprint and Nextel To Combine in Merger of Equals*, News
    Release, Sprint and Nextel, Dec. 15, 2004.

[^116]: *Id.*

[^117]: *Id.*

[^118]: *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.

[^119]: *Sprint Nextel Completes Merger*, News Release, Sprint Nextel,
    Aug. 12, 2005; *Sprint and Nextel To Combine in Merger of Equals*,
    News Release, Sprint and Nextel, Dec. 15, 2004.

[^120]: *See* Section 2, Affiliations, *infra*.

[^121]: *Sprint to Acquire Wireless Affiliate US Unwired for \$1.3B*,
    News Release, Sprint PCS, July 11, 2005.

[^122]: *Id.*

[^123]: *Id.*

[^124]: *Verizon Wireless Completes Purchase Of NextWave Spectrum
    Licenses In 23 Markets*, News Release, Verizon Wireless, Apr. 13,
    2005.

[^125]: *Id*.

[^126]: *See* Section 3, Roaming, *infra*.

[^127]: *See*, *e.g.*, Nextel, Automatic and Manual Roaming Obligations
    Pertaining to Commercial Mobile Radio Services, WT Docket No.
    00-193, *Comments*, at note 20 (filed Jan. 5, 2001) ("To facilitate
    rapid deployment of its network throughout suburban, tertiary and
    rural areas of the country and move towards more ubiquitous
    nationwide service, Nextel entered into an agreement with Nextel
    Partners . . . to construct iDEN coverage using Commission licensed
    frequencies disaggregated by Nextel to \[Nextel Partners\], and
    offering its services to the public under the Nextel brand according
    to strict service quality standards."). *See*, *also*, Nextel, SEC
    Form 10-K, filed Mar. 15, 2005, at 15 (We \[Nextel\] entered into
    the relationships with Nextel Partners principally to accelerate the
    build-out of our network outside the largest metropolitan markets
    areas that initially were the main focus of our network coverage").

[^128]: Cingular Wireless currently owns 35.7 percent of Edge. Cingular
    Wireless, FCC Form 602 (filed May 16, 2005).

[^129]: *See*, *e.g.*, *Edge Wireless Expands to Taylor Crossing*, News
    Release, Edge Wireless, July 7, 2005.

[^130]: Nextel Partners, Inc., SEC Form 10-K, Mar. 22, 2002, at 4.
    Nextel owns about 32 percent of Nextel Partners. *Sprint and Nextel
    To Combine in Merger of Equals*, News Release, Sprint and Nextel,
    Dec. 15, 2005.

[^131]: Nextel Partners, Inc., SEC Form 10-K, Mar. 16, 2005, at 4.

[^132]: *Sprint and Nextel To Combine in Merger of Equals*, News
    Release, Sprint and Nextel, Dec. 15, 2005.

[^133]: Nextel Partners has the right to put itself to the parent - that
    is, force the parent to buy Nextel Partners - after a change in
    control of Nextel. 50.1 percent of non-Nextel held shares must vote
    in favor to authorize the put. On June 23, Nextel Partners filed a
    preliminary proxy for shareholders to put the company to Nextel,
    with a recommendation that shareholders vote in favor of the
    exercise of put right. Phil Cusick and Richard Choe, *Nextel
    Partners:NXTL Files Prox; Recommends Put to Shareholders*, Bear
    Stearns, Equity Research, June 23, 2005, at 1.

[^134]: This counts US Unwired as a separate company. *See, however,*
    Section III.D.1, Sales and Swaps, *supra*. As of November 2004,
    there were 12 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. Four of these
    companies have since merged into two. 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.

[^135]: *See*, *e.g.*, US Unwired Inc., SEC Form 4249(B)(1), May 17,
    2000, at 7.

[^136]: *See* Phil Cusick and Richard Choe, *Airgate PCS Inc.*, Bear
    Stearns, Equity Research, Nov. 24, 2004, at 7.

[^137]: *See* *Eighth Report*, at 14812; Phil Cusick and Richard Choe,
    *Airgate PCS Inc.*, Bear Stearns, Equity Research, Nov. 24, 2004, at
    15.

[^138]: Phil Cusick and Richard Choe, *UbiquiTel PCS*, Bear Stearns,
    Equity Research, July 13, 2005, at 2 (citing a complaint filed by
    UbiquiTel).

[^139]: Sprint, SEC Form 10K/A, filed Apr. 29, 2005, at 34.

[^140]: *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.

[^141]: *See Spectrum Cap Order*, 16 FCC Rcd at 22688-91, ¶¶ 39-43.

[^142]: *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.

[^143]: *Ninth Report*, at 20631.

[^144]: *See* Appendix B, Table 1 and Maps 11-14, *infra*, for
    descriptions and maps of various geographical licensing schemes
    employed by the Commission.

[^145]: 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/)\>.

[^146]: *See* Section VI.B.1, Subscriber Growth, *infra*.

[^147]: 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.

[^148]: The Commission's broadband PCS allocation includes 20 megahertz
    of spectrum at 1910 MHz - 1930 MHz for unlicensed broadband PCS.

[^149]: 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.

[^150]: In June 1998, broadband PCS C block licensees were permitted to
    elect to disaggregate their licenses and return 15 megahertz of C
    block spectrum to the Commission. As a result, a number of licensees
    elected to disaggregate some or all of their licenses, creating some
    BTAs with seven broadband PCS spectrum licenses. *See* Amendment of
    the Commission's Rules Regarding Installment Payment Financing for
    Personal Communications Services (PCS) Licensees, *Second Report and
    Order and Further Notice of Proposed Rule Making*, 12 FCC Rcd 16436
    (1997); Amendment of the Commission's Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licensees, *Order on Reconsideration of the Second Report and
    Order*, 13 FCC Rcd 8345 (1998). In August 2000, the Commission
    decided to reconfigure each 30 megahertz C block license available
    for auction, beginning with Auction No. 35, into three 10 megahertz
    licenses. Amendment of the Commission's Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licensees, *Sixth Report and Order and Order on Reconsideration*, 15
    FCC Rcd 16266, 16267 (2000).

[^151]: Broadband PCS Spectrum Auction Closes, *Public Notice*, 20 FCC
    Rcd 3703 (2005). Some of the spectrum to be re-auctioned was
    returned as a result of the settlement agreement between the FCC and
    NextWave. *See* *Ninth Report*, at 20630.

[^152]: 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").

[^153]: The Commission has held multiple auctions for SMR licenses. FCC,
    *FCC Auctions* (visited Mar. 7, 2002)
    \<http://wireless.fcc.gov/auctions/\>.

[^154]: 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.

[^155]: 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).

[^156]: 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.

[^157]: *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.

[^158]: 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.

[^159]: *Ninth Report*, at 20634.

[^160]: *See* Section IV.B.1.e, Data-Only Networks and Technology
    Deployment, *infra.*

[^161]: 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.

[^162]: 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.

[^163]: No more than 10 megahertz of SMR spectrum was attributable to an
    entity under the cap. 47 C.F.R. § 20.6(b).

[^164]: 47 C.F.R. § 20.6(a).

[^165]: *Spectrum Cap Order*, at 22669. The increase to 55 megahertz
    took effect February 13, 2002. *See* 67 Fed. Reg. 1626 (Jan. 14,
    2002). All 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.

[^166]: FCC Adopts Solution to Interference Problem Faced by 800 MHz
    Public Safety Radio Systems, *News Release*, Federal Communications
    Commission, Jul. 8, 2004.

[^167]: 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\>.

[^168]: *Id.*

[^169]: 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).

[^170]: *See* 929 and 931 MHz Paging Auction Closes, *Public Notice*, DA
    00-508 (rel. Mar. 6, 2000); *Seventh Report*, at 13050-13051.

[^171]: Lower and Upper Paging Bands Auction Closes, *Public Notice*, DA
    03-1836 (rel. May 30, 2003).

[^172]: 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).

[^173]: 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).

[^174]: *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).

[^175]: 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.

[^176]: *See Eighth Report*, at 14798-14799.

[^177]: 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).

[^178]: 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).

[^179]: *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*")*.*

[^180]: *See Lower 700 MHz Report and Order*, at 1024; *Upper 700 MHz
    Second Report and Order*, at 5301-2.

[^181]: *Id.*

[^182]: *Lower 700 MHz Report and Order*, at 1032.

[^183]: *Id.*, at 1028.

[^184]: *See* 47 U.S.C. § 309(j)(14)(A)-(B).

[^185]: 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).

[^186]: Auction Reform Act of 2002, Pub. L. No. 107-195, 116 Stat. 715
    ("*Auction Reform Act*").

[^187]: 47 U.S.C. § 309(j)(15), as added by the *Auction Reform Act*.

[^188]: 47 U.S.C. § 309(j)(15)(C)(iii), as enacted by the *Auction
    Reform Act*.

[^189]: Lower 700 MHz Band Auction Closes, *Public Notice*, DA 02-2323
    (rel. Sept. 20, 2002).. *See*, *also*, *Ninth Report*, at 20638.

[^190]: 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).

[^191]: Auction Reform Act of 2002, *Report To Congress*, FCC 03-138
    (rel. Jun. 19, 2003).

[^192]: 47 C.F.R §§ 20.901(a) and 24.3.

[^193]: 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.

[^194]: *Eighth Report*, at 14801. 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).

[^195]: 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*).

[^196]: 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); *Order on Reconsideration*, FCC 05-149 (rel. Aug. 15,
    2005).

[^197]: 47 C.F.R. Part 27.

[^198]: In the recently issued Order on Reconsideration involving the
    AWS band, the Commission has indicated that it plans to examine, in
    a future proceeding, certain aspects of its rules pertaining to a
    designated entity's eligibility for bidding credits. *See* Service
    Rules for Advanced Wireless Services In the 1.7 GHz and 2.1 GHz
    Bands, *Order On Reconsideration*, FCC 05-149 (rel. Aug. 15, 2005),
    at ¶41.

[^199]: AWS-2 Service Rules NPRM, 19 FCC Rcd 19263.

[^200]: 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.

[^201]: *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.

[^202]: Section IV.B.4, Advertising and Marketing, *infra*.

[^203]: *Ninth Report*, at 20641.

[^204]: *Sixth Report*, at 13350.

[^205]: The Commission held a public forum in February 2002 to discuss,
    among other things, CMRS competition issues in rural areas. 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*"). In addition, the *Eighth* *CMRS* *NOI* included questions
    on a range of rural wireless issues.

[^206]: 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. Similarly, in
    its *Ninth CMRS NOI*, the Commission asked for comments on how the
    Commission should define "rural areas" for purposes of the *Ninth
    Report*. *Ninth CMRS NOI*, at 5615-5616.

[^207]: Biennial Regulatory Review, Spectrum Aggregation Limits for
    Wireless Telecommunications Carriers, *Report and Order*, 15 FCC Rcd
    9219, 9256 at note 203 (1999).

[^208]: 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.").

[^209]: 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.

[^210]: *Ninth Report*, at 20643.

[^211]: *See*, *e.g.*, CTIA Comments, at 15-16 ("the wireless industry
    has a tremendous and unprecedented track record in rapidly bringing
    high-quality, affordable telecommunications services to consumers
    located in rural areas"); T-Mobile Reply Comments, at 6 ("T-Mobile
    and other wireless providers have demonstrated in recent Commission
    proceedings that there is significant wireless competition in rural
    areas").

[^212]: *See*, *e.g.*, CTIA Comments, at 21 ("in 2004, the Bureau of
    Labor Statistics found that 50.5% of rural households have wireless
    service, versus 53.5% of urban households") (Data *cited in* Joseph
    S. Kramer, *et al*., "The Myths and Realities of Universal Service:
    Revisiting the Justification for the Current Subsidy Structure,"
    PFF, January 2005, at 17 and 121).

[^213]: 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.

[^214]: We also note that early termination fees are a widespread
    phenomenon in the marketplace.  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).

[^215]: *See AT&T Launches First National One-Rate Wireless Service
    Plan*, News Release, AT&T Corp., May 7, 1998.

[^216]: *Family Plans Reflect Slowing Cell Growth*,
    [Reuters]{.smallcaps}, Mar. 27, 2005.

[^217]: Phil Cusick and Richard Choe, *Wireless Growth: It\'s a Family
    Affair*, Bear Stearns, Equity Research, Jan. 26, 2005, at 4.

[^218]: *Family Plans Reflect Slowing Cell Growth*,
    [Reuters]{.smallcaps}, Mar. 27, 2005.

[^219]: *Diamond in the Rough*, at 5. But prepaid subscribers have lower
    levels of bad debt, are cheaper to acquire, and pay more on a
    per-minute basis than postpaid subscribers. *Id*., at 5. "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.

[^220]: *Pay First*; Yuki Noguchi, *The Push Behind Prepaid*,
    [Washington Post]{.smallcaps}, June 2, 2005, at D01 ("*The Push
    Behind Prepaid")*.

[^221]: Only about 58 percent of the US population has prime credit.
    *Diamond in the Rough*, at 4.

[^222]: *Pay First*. However, not all carriers find prepaid that
    attractive. According to Verizon Wireless, "we want our customers to
    be postpaid...It's a better business proposition." *Id*.

[^223]: *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.

[^224]: *Pay First*. *See, also*, *The Push Behind Prepaid* ("In the
    next year, companies plan introductions of a slew of services
    offering some form of prepaid service").

[^225]: [Communications Daily]{.smallcaps}, Aug. 13, 2004, at 10 (citing
    a Coinstar Teen Poll).

[^226]: John Byrne, *Kagan Wireless Projections 2004-2014*, [Kagan
    Wireless Market Stats]{.smallcaps}, May 27, 2005, at 3 (10.8
    percent); *Diamond in the Rough*, at 4 (10 percent); Jason
    Armstrong, *et al*., *Shades of Grey in Prepaid*, Goldman Sachs,
    Equity Research, Apr. 12, 2005, at 1 (8 percent).

[^227]: *Ninth Report*, at 20654; *Eighth Report*, at 14830.

[^228]: David Janazzo *et al.*, *US Wireless Matrix 4Q04*, Merrill
    Lynch, Equity Research, Mar. 4, 2005, at 17 ("*US Wireless Matrix
    4Q04")*.

[^229]: *See* Section 2, Resale/MVNO Providers, *supra*.

[^230]: *Ninth Report*, at 20645.

[^231]: *Id*, at 20646.

[^232]: *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*").

[^233]: Cingular Wireless, *Media and Services* (visited May 26, 2005)
    \<www.cingular.com\>; Sprint, *Sprint PCS Vision* (visited May 26,
    2005) \<www.sprintpcs.com\>; T-Mobile USA, *Services & Features*
    (visited May 26, 2005) \<www.t-mobile.com\>; Verizon Wireless, *Get
    It Now* (visited May 26, 2005) \<www.verizonwireless.com\>; Nextel,
    *Services* (visited June 16, 2005) \<www.nextel.com\>. Some carriers
    provide more specific information about pricing structures on their
    web sites than others. In cases where carrier web sites were less
    informative, phone calls to customer service representatives
    provided the basis for statements about the data pricing methods
    used by certain carriers.

[^234]: Cingular Wireless, *Media and Services* (visited May 26, 2005)
    \<www.cingular.com\>; T-Mobile USA, *Services & Features* (visited
    May 26, 2005).

[^235]: Sprint, *Sprint PCS Vision* (visited May 26, 2005)
    \<www.sprintpcs.com\>; Nextel, *Services* (visited June 16, 2005)
    \<www.nextel.com\>.

[^236]: Cingular Wireless, *Media and Services* (visited May 26, 2005)
    \<www.cingular.com\>; Sprint, *Sprint PCS Vision* (visited May 26,
    2005) \<www.sprintpcs.com\>; Nextel, *Services* (visited June 16,
    2005) \<www.nextel.com\>. *See also*, *Options for Using the Web on
    Cellphones*.

[^237]: *Ninth Report*, at 20646. *See, also*, Options for Using the Web
    on Cellphones.

[^238]: Cingular Wireless, *Media and Services* (visited May 26, 2005)
    \<www.cingular.com\>; Sprint, *Sprint PCS Vision* (visited May 26,
    2005) \<www.sprintpcs.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 price usage based
    on the number of megabytes downloaded).

[^239]: T-Mobile USA, *Services & Features* (visited May 26, 2005)
    \<www.t-mobile.com\>.

[^240]: Verizon Wireless, *Get It Now* (visited May 26, 2005)
    \<www.verizonwireless.com\>.

[^241]: Cingular Wireless, *Data Connect* (visited June 16, 2005)
    \<www.cingular.com\>; Sprint, *Wireless Data* (visited June 16,
    2005) \<www.sprintpcs.com\>; T-Mobile, *Internet Rate Plans*
    (visited June 16, 2005) \<www.t-mobile.com\>; Nextel, Data Access
    (visited June 16, 2005) \<www.nextel.com\>; Verizon Wireless,
    *Wireless Internet BroadbandAccess* (visited June 17, 2005)
    \<www.verizonwireless.com\>.

[^242]: *Ninth Report*, at 20648.

[^243]: 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.

[^244]: *Id*., at 329-330.

[^245]: *Id*.

[^246]: 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*").

[^247]: *3G Economics a Cause for Concern*, at 10-11.

[^248]: 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.

[^249]: *See* SectionVI.B.1, Subscriber Growth, *infra*.

[^250]: *See* note Error: Reference source not found, *infra*, for a
    discussion of the cellular analog requirement and its sunset.

[^251]: *See, for example,* Cingular Wireless, SEC Form 10-K, filed Mar.
    7, 2005, at 70 (stating that "we \[will\] continue to sell and
    market TDMA services for the foreseeable future."). *See, also,
    Seventh Report*, at 13011.

[^252]: 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.

[^253]: *See* Section IV.B.1.c, Technology Choices and Upgrades of
    Mobile Telephone Carriers, *infra.*

[^254]: *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.

[^255]: *Wireless Broadband Access Task Force Report*, at 25.

[^256]: *Id.*.

[^257]: *See Seventh Report*, at 12990; *Ninth Report*, at 20650.

[^258]: *Id*.

[^259]: *Standards in Wireless Telephone Networks*, at 328.

[^260]: 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).

[^261]: Verizon Wireless, SEC Form 10-K, filed Mar. 14, 2005, at 3.

[^262]: *On-Demand in the Palm of Your Hand: Verizon Wireless Launches
    "VCAST" -- Nation's First and Only Consumer 3G Multimedia Service*,
    Press Release, Verizon Wireless, Jan. 7, 2005; *Verizon Wireless
    Launches High-Speed Wireless Broadband Network in Tallahassee,
    Florida Area*, Press Release, Verizon Wireless, Feb. 28, 2005;
    *Verizon Wireless Extends Rollout of 3G Network in St. Louis,
    Missouri*, Press Release, Verizon Wireless, June 3, 2005.

[^263]: *Wireless Broadband Access Task Force Report*, at 25.

[^264]: *See Ninth Report*, at 20652.

[^265]: *Wireless Broadband Access Task Force Report*, at 25.

[^266]: *Verizon Wireless Extends Rollout of 3G Network in St. Louis,
    Missouri*, Press Release, Verizon Wireless, June 3, 2005.

[^267]: Sue Marek, *Smaller Operators Mull 3G Upgrade*, [Wireless
    Week]{.smallcaps}, Apr. 15, 2005; Susan Rush, *Midwest Wireless
    Brings EV-DO to Minnesota*, [Wireless Week]{.smallcaps}, Apr. 21,
    2005.

[^268]: *See Ninth Report*, at 20652; *Sprint Begins Launch of EV-DO
    Wireless High-Speed Data Service*, Press Release, Sprint, July 7,
    2005.

[^269]: *Sprint Begins Launch of EV-DO Wireless High-Speed Data
    Service*, Press Release, Sprint, July 7, 2005.

[^270]: *See Ninth Report*, at 20653.

[^271]: *Id*.

[^272]: *See Ninth Report*, at 20651.

[^273]: *Id*.

[^274]: As of the end of 2004, Cingular had deployed GSM/GPRS technology
    across its entire network footprint and 65% of its subscriber base
    was equipped with GSM/GPRS devices. Cingular Wireless LLC, SEC Form
    10-K, filed Mar. 7, 2005, at 8. Just prior to its merger with AT&T
    Wireless, Cingular had deployed across EDGE technology to two-thirds
    of its covered network POPs. Cingular Wireless LLC, SEC Form 10-Q,
    filed Aug. 5, 2004, at 23.

[^275]: Mike Dano, *Cingular Wireless Takes Worldwide HSDPA Lead with
    DoCoMo Delay*, [RCR Wireless News]{.smallcaps}, May 16, 2005, at 1.

[^276]: *Id.*

[^277]: 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.

[^278]: *See* Appendix B, Maps 5-8, *infra*.

[^279]: *See* Appendix B, Map 9, *infra*.

[^280]: *See* Appendix A, Table 7, *infra*.

[^281]: *Id*.

[^282]: *See* Appendix B, Map 9, *infra*.

[^283]: *See* Section III.B.3, *supra*; *Wireless Broadband Access Task
    Force Report*, at 23; Clearwire, *Now Serving/Coming Soon* (visited
    June 3, 2005) \<http://www.clearwire.com\>. In addition to
    Clearwire, several small wireless broadband providers operating in
    the BRS/EBS band have begun to roll out non-line-of-sight OFDM
    equipment, some of which is manufactured by NextNet Wireless, to
    their customers. See Section III.B.3, *supra.*

[^284]: *Wireless Broadband Access Task Force Report*, at 19-20.

[^285]: Clearwire, *Service Plans* (visited June 3, 2005)
    \<http://www.clearwire.com\>.

[^286]: "Delivering the Future of Broadband Wireless Today,"
    Presentation by Guy Kelnhofer, President and CEO, NextNet Wireless,
    submitted at the Wireless Broadband Forum, May 19, 2004, Federal
    Communications Commission, Washington, DC.

[^287]: *Wireless Broadband Access Task Force Report*, at 23.

[^288]: *Id.*, at 19-20; Melanie Reynolds, *Getting a Fix on WiMax*,
    [Electronics Weekly]{.smallcaps}, Feb. 23, 2005; Mark Boslet,
    *Curtain Rises for WiMax Broadband*, [Dow Jones
    Newswires]{.smallcaps}, Feb. 2, 2005.

[^289]: *Wireless Broadband Access Task Force Report*, at 23.

[^290]: *See Ninth Report*, at 20653; *Wireless Broadband Access Task
    Force Report*, at 27.

[^291]: *Id.*

[^292]: *Wireless Broadband Access Task Force Report*, at 27.

[^293]: *See* Section III.A, Services and Product Market Definition, and
    Section III.B.3, Data-Only Providers, *supra*, for a discussion of
    traditional paging services and paging carriers.

[^294]: *See Ninth Report*, at 20654.

[^295]: USA Mobility, *About USA Mobility -- Quick Corporate Fact Sheet*
    (visited June 3, 2005)
    \<http://www.usamobility.com/about/facts.htm\>.

[^296]: *See Ninth Report*, at 20655.

[^297]: *See Ninth Report*, at 20655; eAccess Solutions, Inc., *DataTAC
    Network Coverage* (visited June 3, 2005)
    \<http://www.eaccess.com/wireless_tech/datatac.htm\>.

[^298]: RIM, *Blackberry Wireless Devices* (visited June 3, 2005)
    \<http://www.rim.net/products/handhelds/index.shtml\>; Motient Corp,
    SEC Form 10-K, filed Mar. 31, 2005, at 4.

[^299]: *See Ninth Report*, at 20655. S*ee also* Section III.B.3,
    Data-Only Providers, *supra*.

[^300]: *See Ninth Report*, at 20655.

[^301]: *Space Data Corporation Launches New Wireless Telemetry Service
    in West Texas Oil and Gas Fields*, Press Release, Space Data
    Corporation, Apr. 14, 2004; *Space Data's SkySite® Network Takes Off
    Over South-Central U.S.*, Press Release, Space Data Corporation,
    Oct. 19, 2004.

[^302]: 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.

[^303]: *Eighth Report*, at 14818.

[^304]: *US Wireless Matrix 4Q04*, at 38; *Ninth Report*, at 20656.
    While this report is retrospective, the Commission plans to examine
    in next year\'s report the possible impact of Hurricane Katrina
    on CMRS-related capital expenditures.

[^305]: *Ninth Report*, at 20656. *See*, *also*, *Wireless 411*, at 68.

[^306]: 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.

[^307]: *See* *Wireless 411*, at 40 (Table 19: Roaming Revenues as a
    Percentage of Total Service Revenues).

[^308]: Matt Richtel, *Where Only the Antelope Roam*, [New York
    Times]{.smallcaps}, Nov. 6, 2004. According to John Stanton, the
    chief executive of Western Wireless, the per-minute roaming charge
    that national carriers pay to regional companies has dropped to 16
    cents a minute, on average, from as high as \$1 in the 1990\'s. Matt
    Richtel, *Where Only the Antelope Roam*, [New York
    Times]{.smallcaps}, Nov. 6, 2004. *See*, *also*, *Wireless 411*, at
    33 ("Regional operators have generally seen annual declines in
    roaming revenues, as growth in roaming minutes has been more than
    offset by declines in roaming rates").

[^309]: *See* Appendix A, Table 1, *infra*.

[^310]: *Id*.

[^311]: 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.

[^312]: Simon Flannery, *et al.*, *Wireless Carrier Advertising Remains
    Intense*, Morgan Stanley, Equity Research, May 18, 2005, at 2.

[^313]: *Id*., at 3.

[^314]: *Id*., at 2.

[^315]: *Id*., at 2.

[^316]: *Id*., at 4 ("Of course, advertising also serves to retain
    existing subscribers, not just to bring in new gross adds. Since it
    is generally harder to bring in a new sub than to keep an old one,
    we would expect ad expense per subscriber to trend down as
    subscriber bases grow, as has been the case.")

[^317]: The Associated Press, *Sprint Looks to Fix Customer Problems*,
    [New York Times]{.smallcaps}, Mar. 10, 2005 ("*Sprint Looks to Fix
    Customer Problems*").

[^318]: *See Ninth Report*, at 20657.

[^319]: *Id.*, at 20657-20658.

[^320]: Li Yuan, *Why You Still Can't Hear Me Now*, [Wall Street
    Journal]{.smallcaps}, May 25, 2005, at D1 ("*Why You Still Can't
    Hear Me Now*").

[^321]: *Id*.

[^322]: *Cingular-AT&T Wireless Order*, at 21601.

[^323]: *Why You Still Can't Hear Me Now*; Li Yuan and Jesse Drucker,
    *How Cellular Services Rank On Complaints*, [Wall Street
    Journal]{.smallcaps}, Mar. 29, 2005, p. D1.

[^324]: *See Eighth Report*, at 14825.

[^325]: Simon Flannery *et al*., *1Q05 Trend Tracker: The Telecom
    Conundrum*, Morgan Stanley, Equity Research, June 8, 2005, at 24
    ("*1Q05 Trend Tracker*"); *Ninth Report*, at 20658.

[^326]: Phil Cusick and Richard Choe, *Characteristics of Wireless
    Subscribers and Non-Users*, Bear Stearns, Equity Research, Feb.
    2005, at 25.

[^327]: *See Eighth Report*, at 14824-14825.

[^328]: David Kesmodel, *T-Mobile Offers More Details On Coverage to
    Ease Concerns*, [Wall Street Journal]{.smallcaps}, Apr. 27, 2005
    ("*T-Mobile Offers More Details On Coverage*").

[^329]: *Id*. More specifically, the top rating means that customers
    have a 95 percent chance of making a call without it being dropped.
    *Id*.

[^330]: *Id*.

[^331]: *Id.* *See, also*, Jeff Gelles, *Consumers Get Less Static on
    Cellular Coverage*, [Philadelphia Inquirer]{.smallcaps}, May 2, 2005
    ("*Consumers Get Less Static on Cellular Coverage*").

[^332]: *T-Mobile Offers More Details On Coverage*.

[^333]: *Id*.

[^334]: *Id*.

[^335]: *Sprint Looks to Fix Customer Problems*.

[^336]: *Id*.

[^337]: *Id*.

[^338]: *See* Section VI.C, Quality of Service, *infra*.

[^339]: *See* *Eighth Report*, at 14843-14856; *Ninth Report*, at
    20659-20661.

[^340]: *Ninth Report*, at 20660.

[^341]: Walter S. Mossberg, *Watching TV on Your Cellphone*, [Wall
    Street Journal]{.smallcaps}, Sept. 1, 2004, p. D7 ("*Watching TV on
    Your Cellphone*").

[^342]: *Cingular Goes Live With MobiTV*, News Release, Cingular, Jan.
    25, 2005.

[^343]: *Sprint Offers Fox News Channel*, [Wall Street
    Journal]{.smallcaps}, Apr. 19, 2005; *Watching TV on Your
    Cellphone*.

[^344]: Walter S. Mossberg, *Verizon Devices Use High-Speed Network for
    Voice, Web, E-Mail*, [Wall Street Journal]{.smallcaps}, Dec. 16,
    2004, p. B1 ("*Verizon Devices Use High-Speed Network*").

[^345]: *Id*.; *On-Demand in the Palm of Your Hand: Verizon Wireless
    Launches "VCAST" -- Nation's First and Only Consumer 3G Multimedia
    Service*, News Release, Verizon Wireless, Jan. 7, 2005; *Now Playing
    on a Cell Phone Near You: Video Clips, Music Videos and 3D Games*,
    News Release, Verizon Wireless, Jan. 31, 2005.

[^346]: Walter S. Mossberg, *Verizon is Crossing the U.S. With Speedy,
    True Wireless Access,* [Wall Street Journal]{.smallcaps}, Apr. 8,
    2004, p. B1.

[^347]: *Verizon Devices Use High-Speed Network*.

[^348]: *Ninth Report*, at 20660; *see also*, *Watching TV on Your
    Cellphone*; *Verizon Devices Use High-Speed Network*; and
    Christopher Rhoads, *Cellphones Become 'Swiss Army Knives' as
    Technology Blurs*, [Wall Street Journal]{.smallcaps}, Jan. 4, 2005,
    p. B1.

[^349]: *Ninth Report*, at 20660.

[^350]: *1Q05 Trend Tracker*, at 25. *See,also*, Daniel Henriques *et
    al*., *The Quarter in Pictures -- 1Q05 U.S. Telecom Services
    Review*, Goldman Sachs, Global Investment Research, at 24 (showing
    that Sprint remains the data market leader as measured by the
    contribution of data to service revenue, followed by Cingular,
    Verizon, and Nextel).

[^351]: *Sprint Reports Fourth Quarter and Full-Year 2004 Results*, News
    Release, Sprint, Feb. 3, 2005, at 1 and 4.

[^352]: *Verizon Reports Strong 4Q and 2004 Results, Driven by Wireless
    Revenue Growth, Solid Cash Flows and Margins*, News Release, Verizon
    Communications Inc., Jan. 27, 2005, at 7; *First Quarter 2005
    Financial and Operational Results*, Presentation, Cingular Wireless,
    Apr. 20, 2005, at 13.

[^353]: *Ninth Report*, at 20661.

[^354]: *Largent Announces Landmark MMS Interoperability Pact*, News
    Release, CTIA, Oct. 26, 2004.

[^355]: Susan Rush, *Verizon Signs Another MMS Interop Partner*,
    [Wireless Week]{.smallcaps}, May 23, 2005.

[^356]: *See Eighth Report*, at 14826.

[^357]: *Cellular Service*, [Consumer Reports]{.smallcaps}, Feb. 2005,
    at 18.

[^358]: *Ninth Report*, at 20662.

[^359]: *US Wireless Matrix 4Q04*, at 14.

[^360]: *Id.*, at 4. See also, *1Q05 Trend Tracker*, at 24 ("Churn
    continues to slowly trend downward"). One analyst attributes this
    decline to "(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 terms
    of service and network quality." Jason Armstrong *et al*., *Global
    Telecom Weekly*, Goldman Sachs, Equity Research, Apr. 22, 2005, at
    2.

[^361]: Simon Flannery and Vance Edelson, *Wireless Carriers Susceptible
    to Slowing Industry Growth*, Morgan Stanley, Equity Research, May
    25, 2005, at 1.

[^362]: Timothy Horan *et al*., *Raising Wireless Subscriber;
    Profitability Outlook Improving*, CIBC World Markets, Equity
    Research, May 12, 2005, at 4.

[^363]: *See Sixth Report*, at 13372-73; *Seventh Report*, at 13007;
    *Eighth Report*, at 14817; *Ninth Report*, at 20663.

[^364]: *See*, *e.g*., [Communications Daily]{.smallcaps}, Nov. 8, 2004,
    at 7 (citing a Harris Interactive report); Simon Flannery and Vance
    Edelson, *Strong Showing for Bells in Annual Corporate Survey,*
    Morgan Stanley, Equity Research, Jun. 22, 2004, at slide 10; Phil
    Cusick and Richard Choe, *Characteristics of Wireless Subscribers
    and Non-Users*, Bear Stearns, Equity Research, Feb. 2005, at 26-28.

[^365]: 47 C.F.R. § 52.21(l).

[^366]: 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"*).

[^367]: *Verizon Wireless LNP Order*, 17 FCC Rcd at 14986, para. 31.

[^368]: Craig Stroup and John Vu, *Numbering Resource Utilization in the
    United States as of December 31, 2004*, Federal Communications
    Commission, Aug. 2005, at 35.

[^369]: *Id.*

[^370]: *Id.*

[^371]: *Id.*

[^372]: *Ninth Report*, at 20664.

[^373]: *See US Wireless Matrix 4Q04*, at 1, 14; Phil Cusick and Richard
    Choe, *Characteristics of Wireless Subscribers and Non-Users*, Bear
    Stearns, Equity Research, Feb. 2005, at 5-6 (noting that Verizon,
    Nextel and U.S. Cellular "have focused on customer service and
    satisfaction as an effective mechanism to mitigate churn."); CTIA
    Comments, at 20.

[^374]: Phil Cusick and Richard Choe, *Wireless 101: A U.S. Wireless
    Industry Primer*, Bear Stearns, Equity Research, June 2005, at 10.

[^375]: *See Fourth Report*, at 10164-10165.

[^376]: David Pringle, *Slower Growth Hits Cellphone Services Overseas*,
    [Wall Street Journal]{.smallcaps}, May 23, 2005 (citing a Yankee
    Group survey).

[^377]: 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.

[^378]: *Econ One Wireless Survey: Costs Nudge Down in December*, News
    Release, Econ One, Jan. 12, 2004. The survey is based on an analysis
    of pricing plan data collected from carriers' websites.
    *Transcript*, at 78.

[^379]: This does not include any additional charges for roaming or
    long-distance service.

[^380]: *E**con One Wireless Survey: Service Costs Stay Flat*, News
    Release, Econ One, Feb. 17, 2004; *Econ One Wireless Survey:
    Wireless Costs Decline*, News Release, Econ One, Feb. 22, 2005. The
    analysis assumes a 70 percent peak/30 percent off-peak split in the
    kind of minutes used. In January 2004, Econ One modified the minute
    buckets in its analysis to "reflect increased consumer service
    usage." Instead of reporting cost of wireless service based on 50,
    200, 500, and 800 MOUs per month, Econ One increased the buckets to
    200, 500, 800 and 1100 MOUs per month. In addition, Econ One added
    service plans offered by Nextel Communications into its analysis.
    Thus, Econ One's analysis is not directly comparable to prior
    periods. *Econ One Wireless Survey: Service Costs Stay Flat*, News
    Release, Econ One, Feb. 17, 2004.

[^381]: *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 July 11, 2005)
    \<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.

[^382]: *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
    July 11, 2005) \<http://www.bls.gov/cpi/cpifactc.htm\>.

[^383]: From December 1997 compared to the annual index.

[^384]: *See US Wireless Matrix 4Q04*, at 44.

[^385]: 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.*

[^386]: *See* Appendix A, Table 9, *infra*.

[^387]: *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 2004 CTIA Survey*, at
    197. CTIA defines an alternative measure of ARPU, which includes
    roaming revenues but not toll revenue. For a comparison between
    these two measures, *see* *Dec 2004 CTIA Survey*, at 100, 198.

[^388]: *See* Section 1, Pricing Trends., *supra*.

[^389]: *See*, *e.g.*, Simon Flannery *et al.*, *Skating on Thin Ice:
    Lowering Industry View to Cautious*, Morgan Stanley, Equity
    Research, Jan.19, 2005, at 16 (showing elasticity of demand greater
    than one for the last four years).

[^390]: Regardless of whether customers use the large bundles of minutes
    included with such plans, the higher monthly access fees increase
    operators' ARPU figures.

[^391]: *See*, *e.g.*, Jason Armstrong, *et al*., *Global Telecom
    Weekly*, Goldman Sachs, Equity Research, Apr. 22, 2005, at 2 ("ARPU
    strength \[is\] supported by rational pricing and increasing
    contribution from data").

[^392]: *1Q05 Trend Tracker*, at 25.

[^393]: 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 requires
    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. In their December 31, 2003 filings,
    operators reported that they served 157 million subscribers. *See*
    Appendix A, Table 2, *infra*. However, the Commission recognizes
    that its reporting rules result in some level of undercount of total
    industry subscribers since it does not count subscribers served by
    mobile telephone providers in states where the provider has fewer
    than 10,000 customers. *See* Local Competition and Broadband
    Reporting, *Report and Order*, 15 FCC Rcd 7717, 7743 (2000).

[^394]: 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.*

[^395]: 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.*

[^396]: *See Dec 2004 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.

[^397]: The advantages of NRUF data over CTIA's survey are discussed in
    the *Seventh Report*, at 13004.

[^398]: Craig Stroup and John Vu, *Numbering Resource Utilization in the
    United States as of December 31, 2004*, Federal Communications
    Commission, Aug. 2005, at 12 (Table 1: Number Utilization by Carrier
    Type as of December 31, 2004); adjusted for porting using *Trends in
    Telephone Service*, Federal Communications Commission, Apr. 2005, at
    8-15 (Table 8.10: Telephone Number Porting Activity Since Wireless
    Pooling Started). 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.

[^399]: 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, 2004
    was estimated to be 297.6 million. *See* U.S. Census Bureau,
    *National and State Population Estimates:* *Annual Population
    Estimates 2000 to 2004* (visited June 17, 2005)
    \<http://www.census.gov/popest/states/tables/NST-EST2004-01.xls \>.
    The number of subscribers refers to the number of separate wireless
    accounts. A particular individual may have more than one wireless
    account.

[^400]: *See Ninth Report*, at 20669.

[^401]: *See* Appendix A, Table 1, *infra*.

[^402]: *Id*.

[^403]: *Pay First*; *The Push Behind Prepaid*. At Sprint PCS, for
    example, such users are responsible for almost half of new
    subscription growth. Jesse Drucker, Almar Latour, and Dennis Berman,
    *Taking no Giants, Sprint Nextel Seeks to Exploit Wireless Growth,*
    [Wall Street Journal]{.smallcaps}, Dec. 16 2004, at A1. *See*,
    *also*, Simon Flannery and Vance Edelson, *Wireless Carriers
    Susceptible to Slowing Industry Growth*, Morgan Stanley, Equity
    Research, May 25, 2005, at 2; Timothy Horan et al., *Raising
    Wireless Subscriber; Profitability Outlook Improving*, CIBC World
    Markets, Equity Research, May 12, 2005, at 2; Daniel Henriques et
    al., *Global Telecom Weekly*, Goldman Sachs, Equity Research, Feb.
    4, 2005, at 1.

[^404]: *US Wireless Matrix 4Q04*, at 18. *See*, *also*, Colette M.
    Fleming *et al.*, *Wireless 411*, UBS Warburg, Equity Research, Jan.
    5, 2005, at 18 (also estimating 97 percent) ("*Wireless 411*"). CTIA
    found a similar rate: More than 96 percent of subscribers of
    responding carriers in its YE2004 survey were digital (CTIA
    estimated the digital percentage for its total estimate of
    subscribers at 94.6). *Dec 2004 CTIA Survey*, at 48-49.

[^405]: Based on digital penetration rates found in, *US Wireless Matrix
    4Q04*, at 18. Subscribers that can access both the digital and
    analog networks of carriers are considered to be digital
    subscribers.

[^406]: *Ninth Report*, at 20670.

[^407]: *Verizon Reports Strong 4Q and 2004 Results, Driven by Wireless
    Revenue Growth, Solid Cash Flows and Margins*, News Release, Verizon
    Communications Inc., Jan. 27, 2005, at 7; *First Quarter 2005
    Financial and Operational Results*, Presentation, Cingular Wireless,
    Apr. 20, 2005, at 13; *Sprint Reports Fourth Quarter and Full-Year
    2004 Results*, News Release, Sprint, Feb. 3, 2005, at 1 and 4.

[^408]: Li Yuan, *Text Messages Sent by Cellphone Finally Catch on in
    U.S.*, [Wall Street Journal, Aug. 11, 2005.]{.smallcaps}

[^409]: *Id*.

[^410]: Craig Stroup and John Vu, *Numbering Resource Utilization in the
    United States as of December 31, 2004*, Federal Communications
    Commission, Aug. 2005, at 12 (Table 1: Number Utilization by Carrier
    Type as of December 31, 2004).

[^411]: Private communication, TelAstra; *Ninth Report*, at 20670

[^412]: *US Wireless Matrix 4Q04*, at 26.

[^413]: *Id*. According to one survey, only 22 percent of wireless
    subscribers use all of their available minutes on a monthly basis,
    suggesting there is considerable potential for further growth. *Most
    Wireless Minutes Are Unused, Study Finds*, [Mobile Pipeline
    News]{.smallcaps}, Aug. 5, 2004 (citing a study by telecom market
    research firm TNS Telecoms).

[^414]: *US Wireless Matrix 4Q04*, at 26.

[^415]: *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.

[^416]: *See*, *e.g*., *Wireless 411*, at 45 ("\[G\]rowth in usage
    remains robust for the most part despite the already high levels. We
    believe this is a function of the lower effective price per minute
    charged").

[^417]: *Wireless Handsets*, Merrill Lynch, Equity Research, Jun. 4,
    2004, at 9.

[^418]: Robert F. Roche, *CTIA's Wireless Industry Indices*, CTIA-The
    Wireless Association, June 2005, at 226-227.

[^419]: *Id*.

[^420]: John Byrne *et al*., *Wireless Telecom Investor*, Number 208,
    Kagan Research, LLC, June 6, 2005, at 5 ("*Kagan Wireless
    Newsletter*").

[^421]: *Id*.

[^422]: Gary Strauss, *Cell Phone Ringtones Dial Into Pop Culture*, [USA
    Today]{.smallcaps}, June 2, 2005.

[^423]: *Kagan Wireless Newsletter*, at 5.

[^424]: *Next Generation Wireless Multimedia Services*, TMNG Market
    Research, July 2005, at 3 and 5.

[^425]: 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.

[^426]: 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.

[^427]: *Redefinition of the EA*, at 75.

[^428]: 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%.").

[^429]: "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.

[^430]: *See also,* Appendix B, Map 4, *infra*.

[^431]: 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.

[^432]: *T-Mobile Offers More Details On Coverage*; *Consumers Get Less
    Static on Cellular Coverage*.

[^433]: *J.D. Power and Associates Reports Satisfaction With Wireless
    Service Providers Increases Significantly as Customers Report Higher
    Ratings in Call Quality and Cost-Related Attributes*, Press Release,
    J.D. Power and Associates, Sept. 9, 2004 ("*J.D. Power and
    Associates Wireless Customer Satisfaction Study*").

[^434]: *Id*.

[^435]: *Id*.

[^436]: *Id*.

[^437]: *J.D. Power and Associates Reports The Number of Wireless Calls
    Experiencing a Problem with Initial Connections Declines 50 Percent,
    Despite an Increase in Calling Volume*, Press Release, J.D. Power
    and Associates, Aug. 2005.

[^438]: *Id*. The 2005 study employs a call quality index based on seven
    customer-reported problem areas that impact overall carrier
    performance. These are (in order of importance): static/interference
    (39 percent); connection on first try (24 percent); voice distortion
    (12 percent); no echoes (10 percent); dropped/disconnected calls (9
    percent); no immediate voice mail notification (4 percent); and no
    immediate text message notification (2 percent). The study is based
    on the experiences reported by 22,730 wireless users.

[^439]: *Id.*

[^440]: *Id.* The higher rate of call quality problems in non-metro
    areas is particularly the case with respect to dropped/disconnected
    calls, initial connections, static, and delayed voice mail
    notification.

[^441]: *Id*.

[^442]: Edward C. Baig, *Cell Phones Top List of What Gets Us Steamed*,
    [USA Today]{.smallcaps}, May 18, 2005 ("*Cell Phones Top List of
    What Gets Us Steamed*").

[^443]: In particular, a 2002 telephone survey conducted by the General
    Accounting Office found an 83 percent customer satisfaction rate,
    and a 2003 online survey conducted by the National Regulatory
    Research Institute found a 72 percent customer satisfaction rate.
    *See Ninth Report*, at 20674-20675; *FCC Should Include Call Quality
    in Its Annual Report on Competition in Mobile Phone Services*,
    General Accounting Office, GAO-03-501, Apr. 2003, at 27.

[^444]: *Cell Phones Top List of What Gets Us Steamed*.

[^445]: *Cellular Service*, [Consumer Reports]{.smallcaps}, Feb. 2005,
    at 18.

[^446]: *Cell Phones Top List of What Gets Us Steamed*.

[^447]: *Id.*.

[^448]: Quarterly Report on Informal Consumer Inquiries and Complaints
    Released, *News Release*, Federal Communications Commission March 4,
    2005.

[^449]: *Ninth Report*, at 20676-20678. In accordance with established
    practice in using international benchmarking for the purpose of
    assessing 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.

[^450]: *See* Appendix A, Table 10, *infra*.

[^451]: *Global Wireless Matrix 4Q04*, at 3.

[^452]: *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 (Subscriber Identity
    Module) Cards or handsets. As one analyst report explains, 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. *Id*., at 144. *See, also,*
    *Seventh Report*, at 13033, and *Sixth Report*, at 13391.

[^453]: *Global Wireless Matrix 4Q04*, at 3.

[^454]: The estimates of mobile penetration, MOUs, and revenue per
    minute in the United States cited in this section differ somewhat
    from estimates provided in previous sections of the report because
    they come from different sources. We rely on the comparative data
    reported in Merrill Lynch's *Global Wireless Matrix 4Q04* for this
    section of the report to ensure consistency with the methodology
    used to compile the data reported for other countries.

[^455]: *Id*.

[^456]: *Id*. In many West European and Asian countries, prepaid service
    along with the calling party pays regime may contribute to high
    mobile penetration. *See OECD Communications Outlook 2005*, at 299.

[^457]: *Global Wireless Matrix 4Q04*, at 3 and 8. 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. MOUs figures are potentially somewhat
    overstated in the United States, and more generally in countries
    that do not employ calling party pays, relative to countries that do
    employ calling party pays, as a result of the double-counting of
    same-network ("on-net") mobile-to-mobile minutes. The double
    counting occurs because under the "mobile party pays" system used in
    the United States the same minute of an on-net call is billed to
    both the caller and the receiver. *Id*., at 144-145.

[^458]: *Id*., at 3 and 8. *See, also,* Jason Armstrong *et al.,
    Wireless Services -- Look for Another Strong Year in 2005*, Goldman
    Sachs, Global Investment Research, Jan. 4, 2005, at 1 (asserting
    that "In Europe, high call termination rates to wireless phones have
    effectively kept a ceiling on the minutes traversing wireless
    networks.").

[^459]: *Global Wireless Matrix 4Q04*, at 3 and 8.

[^460]: *Id*., at 3.

[^461]: Revenue per minute is calculated by dividing monthly voice-only
    ARPU by MOUs. For purposes of international comparison, 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. *Id*., at 145.

[^462]: *Id*., at 3 and 8.

[^463]: *Id*., at 3.

[^464]: *Id*.

[^465]: *Id*.

[^466]: *Id*.

[^467]: *Ninth Report*, at 20679; *Seventh Report*, at 13037. *See,
    also,* Jason Armstrong *et al., Wireless Services -- Look for
    Another Strong Year in 2005*, Goldman Sachs, Global Investment
    Research, Jan. 4, 2005, at 1.

[^468]: *Ninth Report*, at 20678-20679; *Eighth Report*, at 14869-14871;
    *Seventh Report*, at 13036.

[^469]: *Ninth Report*, at 20680.

[^470]: *Global Wireless Matrix 4Q04*, at 3.

[^471]: *Id*.; *Ninth Report*, at 20680.

[^472]: *Global Wireless Matrix 4Q04*, at 3.

[^473]: Brian Lagrotteria, *R U There?*, [Wall Street
    Journal]{.smallcaps}, Feb. 14, 2005.

[^474]: Li Yuan, *Text Messages Sent by Cellphone Finally Catch on in
    U.S.*, [Wall Street Journal, Aug. 11, 2005.]{.smallcaps}

[^475]: *Ninth Report*, at 20680.

[^476]: Frank J. Governali *et al.*, *Wireless Data Prospects
    Brightening*, Goldman Sachs, Global Investment Research, Apr. 16,
    2004, at 12.

[^477]: *Id*. *See, also, Text Messages Sent by Cellphone Finally Catch
    on in U.S.*[.]{.smallcaps} 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.

[^478]: *See* *Ninth Report*, at 20681.

[^479]: *Id*.

[^480]: *Global Wireless Matrix 4Q04*, at 11.

[^481]: David Pringle, *Not So Fast*, [Wall Street Journal]{.smallcaps},
    Feb. 14, 2005; David Pringle, *Slower Growth Hits Cellphone Services
    Overseas*, [Wall Street Journal]{.smallcaps}, May 23, 2005; Simon
    Flannery *et al*., *3G Economics a Cause for Concern*, Morgan
    Stanley, Equity Research, Feb. 1, 2005, at 6-7.

[^482]: *Ninth Report*, at 20681.

[^483]: Telecommunications Carriers Association ("TCA"), *Number of
    Subscribers* (visited May 24, 2005)
    \<http://www.tca.or.jp/eng/database/daisu/index.html\>.

[^484]: *Id*.

[^485]: Paul Wuh e*t al*., *DoCoMo Gets 10mn 3G WCDMA Subscribers*,
    Lehman Brothers, Equity Research, Mar. 8, 2005, at 1.

[^486]: *3G Subscribers,* [3G Today]{.smallcaps}, (visited May 24, 2005)
    \<http://www.3gtoday.com/subscribers/index.html\>.

[^487]: *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.

[^488]: *A Spiritual Connection*, [Economist]{.smallcaps}, Mar. 10,
    2005.

[^489]: *See* Section 1, Subscriber Growth, *supra*.

[^490]: *Diamond in the Rough*, at 4.

[^491]: *More Cell Phones, Less Satisfaction*, [CNET
    News.com]{.smallcaps}, Apr. 13, 2005 (citing a Forrester Research
    study).

[^492]: Stephen Blumberg, *Household Telephone Service and Usage
    Patterns in the US in 2004*, data presented at "U.S. Household
    Telephone Usage Patterns In 2004: A Focus on Cell Phone Usage,"
    seminar hosted by the Bureau of Labor Statistics, Washington, DC,
    Jun. 16, 2005. Another recent study found that 6 percent of U.S.
    households are wireless only. Clyde Tucker, *Household Telephone
    Service and Usage Patterns in the United States in 2004*, data
    presented at "U.S. Household Telephone Usage Patterns In 2004:
    A Focus on Cell Phone Usage," seminar hosted by the Bureau of Labor
    Statistics, Washington, DC, Jun. 16, 2005.

[^493]: Jason Armstrong *et al*.*, Americas: Telecom Wireless,* Goldman
    Sachs, Equity Research, Jan. 4, 2005, at 1.

[^494]: This percentage includes wireless-only households. Clyde Tucker,
    *Household Telephone Service and Usage Patterns in the United States
    in 2004*, data presented at "U.S. Household Telephone Usage Patterns
    In 2004: A Focus on Cell Phone Usage," seminar hosted by the Bureau
    of Labor Statistics, Washington, DC, Jun. 16, 2005.

[^495]: *See* *Ninth Report*, at 20684.

[^496]: Jesse Drucker, Almar Latour, and Dennis Berman, *Taking no
    Giants, Sprint Nextel Seeks to Exploit Wireless Growth,* [Wall
    Street Journal]{.smallcaps}, Dec. 16 2004, at A1; Anne Marie Squeo,
    *In Tiny Towns, Call Options Shake Up an Old Phone System*, [Wall
    Street Journal,]{.smallcaps} Feb. 22, 2005, at A1.

[^497]: Timothy Horan *et al.*, *Transfer of Coverage: We Favor Wireless
    and Cable Over Wireline*, CIBC World Markets, Equity Research, May
    3, 2005, at 2.

[^498]: Jesse Drucker, Almar Latour, and Dennis Berman, *Taking no
    Giants, Sprint Nextel Seeks to Exploit Wireless Growth,* [Wall
    Street Journal]{.smallcaps}, Dec. 16 2004, at A1; Almar Latour and
    Shawn Young, *Verizon Consides Shedding Portion Of Its Local Lines,*
    [Wall Street Journal,]{.smallcaps} Oct. 29, 2004; [Communications
    Daily]{.smallcaps}, Oct. 22, 2004.

[^499]: *US Wireless Matrix 4Q04*, at 21.

[^500]: Christopher Rhoads, *Outside the Lines*, [Wall Street
    Journal,]{.smallcaps} Sept. 13, 2004, at R6.

[^501]: *See Eighth Report*, at 14832-14833; *Ninth Report*, at
    20684-20685.

[^502]: Frank Governali *et al.*, *Global Telecom Weekly*, Goldman
    Sachs, Equity Research, Aug. 9, 2004, at 2.

[^503]: *Id*.

[^504]: John Byrne, *Unlimited Local Plans Poliferate*, [Kagan Wireless
    Market Stats]{.smallcaps}*,* Oct. 15, 2004, at 2.

[^505]: *Leap Reports Results for Fourth Quarter and Full Year 2004*,
    News Release, Leap, May 11, 2005.

[^506]: *Id*.

[^507]: *Leap Blows Away Industry Average for Landline Displacement*,
    News Release, Leap, Mar. 14, 2005.

[^508]: *Id*.

[^509]: *Id*.

[^510]: *MetroPCS Announces Signing of 1.5 Millionth Customer*, News
    Release, MetroPCS, Feb 28, 2005.

[^511]: *See* MetroPCS, *more about metroPCS* (visited May 23, 2005)
    \<http://www.metropcs.com/about/moreaboutmetropcs.shtml\>.

[^512]: *See Ninth Report*, at 20685-20686.

[^513]: John Byrne, *Unlimited Local Plans Poliferate*, [Kagan Wireless
    Market Stats]{.smallcaps}*,* Oct. 15, 2004, at 2-3. *See, also,*
    Cricket, *Cell Phone Specials* (visited May 23, 2005)
    \<http://www.mycricket.com/\>.

[^514]: *See*, e.g.,T-Mobile, *Get the Nation's Most Whenever Minutes
    with the free Motorola V188* (visited May 23, 2005) \<
    http://www.t-mobile.com/promos/online/1000min6010/\>; Cingular,
    *Mobile Phone Deals & Cellular Service Plans that Fit you Best!*
    (visited May 23, 2005) \< http://www.cingular.com/\>; and Verizon
    Wireless, *America's Choice* (visited May 23, 2005) \<
    http://www.verizonwireless.com/b2c/index.jsp\>.

[^515]: John Byrne, *Unlimited Local Plans Poliferate*, [Kagan Wireless
    Market Stats]{.smallcaps}*,* Oct. 15, 2004, at 2.

[^516]: For a comprehensive discussion of WLAN technologies and
    deployment, *see, generally,* *Wireless Broadband Access Task Force
    Report*.

[^517]: 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.

[^518]: 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*")

[^519]: *See* Doug Mohney, *802.11b on edge of extinction: Bye bye
    Sooty, bye bye*, [The Inquirer]{.smallcaps}, Apr. 11, 2005.
    \<http://www.theinquirer.net/?article=22443\>.

[^520]: *Id*.

[^521]: *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.

[^522]: *See* \<http://www.wifi411.com/\> (visited May 18, 2005).

[^523]: *See*
    \<http://intel.jiwire.com/hot-spot-directory-browse-by-state.htm?country_id=1\>
    (visited May 18, 2005).

[^524]: *Wireless Broadband Access Task Force Report*, at 30-31.

[^525]: *Id*., at 30; *Gartner Says the Number of Hotspot Users
    Worldwide to Triple in 2004*, Press Release, Gartner, Inc., Feb. 18,
    2004.

[^526]: See Corilyn Shropshire, *Why Pay for Wi-Fi? As Wireless Internet
    Hot Spots Proliferate, So Do Demands for Free Service*, [Pittsburgh
    Post-Gazette]{.smallcaps}, Feb. 7, 2005.

[^527]: *Ninth Report*, at 20687.

[^528]: See *Wireless Broadband Access Task Force Report*, at 74.

[^529]: *See*, *for example*, Sprint PCS, *PCS for Business: Voice and
    Data* (visited May 20, 2004)
    \<https://wifi.sprintpcs.com/signup/terms.aspx\>; T-Mobile,
    *T-Mobile Hotspot: Service Plans* (visited May 20, 2004)
    \<https://selfcare.hotspot.t-mobile.com////services_plans.do\>.

[^530]: *See, for example*, T-Mobile, *T-Mobile Hotspot U.S. Location
    Map* (visited May 18, 2005)
    \<http://locations.hotspot.t-mobile.com/\>. The Nextel hotspot
    service alone is available for laptops for a monthly fee of \$39.99.
    With Wireless PC Access added, the service is charging a promotional
    rate of \$54.99 per month (visited May 18, 2005)
    \<http://nextelonline.nextel.com/en/solutions/dataaccess/wifi_hotspot_plan.shtml\>.

[^531]: *See, for example*, T-Mobile, *T-Mobile Hotspot U.S. Location
    Map* (visited May 18, 2005)
    \<http://locations.hotspot.t-mobile.com/\>. The Nextel hotspot
    service alone is available for laptops for a monthly fee of \$39.99.
    With Wireless PC Access added, the service is charging a promotional
    rate of \$54.99 per month (visited May 18, 2005)
    http://nextelonline.nextel.com/en/solutions/dataaccess/wifi_hotspot_plan.shtml

[^532]: *Sprint Extends Wi-Fi Leadership and Broadband Footprint
    Globally*, Press Release (visited May 18, 2005)
    \<http://www2.sprint.com/mr/news_dtl.do?id=6320\>. Sprint PCS offers
    pay-as-you-go Wi-Fi access for \$9.95 for 24 hours of unlimited
    usage in a supported location. It also has a month-to-month plan for
    \$49.95 (visited May 18, 2005)
    \<http://www.sprint.com/business/products/products/sprintPCSWI-FIAccess_tabB.jsp\>.

[^533]: Ryan Naraine, *Verizon Plans to 'Wi-Fi' Pay Phones*, 802.11
    Planet \<http:**//**www.80211-planet.com/news/article.php/2204901\>.

[^534]: *Verizon Wireless Answers the Mayor's Call: Accelerates
    Expansion of Wireless Broadband Network in New York City and Metro
    Region*, Press Release, Verizon Wireless, Apr. 27, 2005 (visited May
    18, 2005) \<http://news.vzw.com/news/2005/04/pr2005-04-27a.html\>.

[^535]: *See* Section, Section VI.B.1, Subscriber Growth, *supra*.

[^536]: *See* Section VI.D.2, Minutes of Use, *supra*, and VI.E,
    International Comparisons, *supra*.

[^537]: *See* Section VI.B.1, Subscriber Growth, *supra*, and Section
    VI.B.3, Mobile Data Usage, *supra*.

[^538]: *See* Section VI.A.1, Pricing Trends, *supra*.

[^539]: *See* Section VI.E, International Comparisons, *supra*.

[^540]: *See* Section IV.B.1, Technology Deployment and Upgrades,
    *supra*.

[^541]: As noted earlier, the Sprint-Nextel and Alltel-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.

[^542]: *See* Appendix A, Table 9, *infra*.

[^543]: *See* Section A, Background, *supra.*