Wireless Competition Drives Lower Prices while State Utility Regulation Increases Consumer Costs

Wireless consumers benefit from lower prices and industry investment under nationally-focused, light-touch regulation while prices for electricity and water have increased under utility-style, rate-setting regulation at the state or local level, according to a new Advanced Analytical Consulting Group (AACG) study commissioned by CTIA.

The analysis found that while the nationwide price of wireless service decreased by 43% between 2010 and 2019, (1) residential electricity prices increased by 13% and (2) population-weighted average water prices increased 63% percent across 30 cities (between 2010 and 2018).  Across 13 selected states, electricity price increases were as high as 30%, with only two states experiencing declines in electricity prices.  Water price increases ranged from 26% to 93% for cities within the 13 states.

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In addition to lower prices, wireless consumers benefitted from growing demand for better products, facilitated by steady investment.  From 2010-2020, while the price of wireless service decreased, mobile wireless providers served consumers with 108 times more mobile and download speeds 31 times faster —all facilitated by annual investment in network capabilities totaling about one-third trillion dollars over the period.

“This study should serve as a warning sign for those states considering applying a regulatory framework similar to that of electric and water utilities to the competitive wireless industry,” concluded Tim Tardiff, the paper’s author. “If past is prologue, then this paper suggests that such an approach by states will likely constrain wireless broadband innovation, deter investment, and lead to rising prices—and ultimately harm consumers.”

“This research confirms that consumers directly benefit from the intense competition that characterizes America’s wireless industry,” said Meredith Attwell Baker, CTIA President and CEO. “While prices across other industries are increasing, wireless industry competition helped keep costs low for consumers during a period of rampant inflation.”