Over the past decade, the U.S. wireless market has become increasingly concentrated, with the former Bell companies (AT&T and Verizon) using their legacy wireline monopoly advantages to establish and increase their market power in the wireless market. What once was a market with six national and numerous regional wireless providers has now devolved into a market with two dominant national carriers, two struggling national carriers and an ever-dwindling number of struggling regional carriers. AT&T and Verizon continue to reap sustained wireless profit margins near 50 percent while other carriers struggle to earn profits at a fraction of that level, a clear indication that competition in the wireless market is broken. Even the nation’s largest cable companies, with their scale and scope advantages and massive spectrum holdings, gave up on entering this market.

These disturbing competitive trends are not the result of the invisible hand of the market; they are the result of a regulatory system that has aided and abetted this march towards duopoly. Though the Commission has recently taken actions to begin to remedy its past failures to promote wireless competition, there is much work to do, work that is increasingly difficult in the face of the politically well-connected Twin Bells' desires to further extend their market power and dominance. There is much the Commission can do to provide a check on the Twin Bells' market power, from reforming the broken special access regulatory system to ensuring smaller competitors have a fighting chance through reasonable interoperability rules. But the answer to the riddle of how to get wireless competition back on track lies in the Commission’s power over allocation of the wireless market’s key production input: spectrum. As the wireless market transitions from a voice-centric narrowband business model to a data-centric broadband model, the Commission has an opportunity to ensure that the problems of the past are not ported into the future. However, to capitalize on this opportunity to right what is wrong, the Commission first must do no further harm by approving any license transfers that further widen the already large spectrum gap between the Twin Bells and their competitors.