The Federal Communications Commission (FCC) has recognized that Wi-Fi plays an increasingly important role as a competitor to the services offered by the mobile wireless industry, including when evaluating the state of competition in the mobile wireless marketplace. When reviewing proposed mergers, however, the FCC relies on a product market definition—“mobile telephony/broadband services”—that has been unchanged for approximately a decade and that does not account for the changing role of Wi-Fi in the competitive marketplace during that time. Notably, the FCC continues to rely on this market definition without undertaking any particular analysis and without the support of any empirical evidence. Since the FCC adopted its market definition: (1) the choice of Wi-Fi has become a clear reflection of how U.S. consumers use wireless devices; (2) market conditions for wireless services have changed rapidly; (3) more data has migrated to Wi-Fi offload— transmitting wireless data to a Wi-Fi network—than has remained on the cellular networks, and most wireless services are used in both nomadic and fixed environments; (4) Wi-Fi capabilities in wireless devices have evolved and become ubiquitous; (5) new technologies have not appeared to lessen demand for Wi-Fi; (6) cable providers are challenging wireless carriers with Wi-Fi offload and wireless services; and (7) consumers have become sensitive to price and quality in choosing between cellular services and Wi-Fi. When the use of Wi-Fi for consumer data offload is examined, a hypothetical monopolist might reveal that “mobile telephony/broadband services” are not a separate market.

The FCC first adopted this market definition in 2008, when 3G technologies were first being deployed and 4G was only on the planning boards. Today, the technologies of 2008 and the associated market definitions are outdated. Instead, new 5G technologies are being deployed. In this context, the FCC’s reliance on an outdated market definition results in an inaccurate understanding of competition in the market. Before conducting competitive analyses of the mobile marketplace, the FCC should carefully examine consumer choices of communications services and develop market definitions that reflect current technologies and consumer practices. Wi-Fi and the businesses that provide it likely discipline prices of wireless services and are part of the same economic market.