The above dynamics manifested by the various telecom players operating in the country are governed, regularized and regulated by a common independent agency- Federal Communications Commission (FCC).

Founded by the Communications Act of 1934, the agency has since then undertaken turnkey decisions that have marked the course of the country’s telecommunication industry.

One of the most important milestone verdicts announced by the FCC is its approval to cable television companies to foray the telecommunications services industry. The move was prompted by Cox Enterprises'' and Tele-Communications Inc's desire to purchase Merrill Lynch Group's Teleport Communications Group. The United States Telephone Association however opposed the decision citing that the US law doesn’t allow a cable television company from offering communication services in the same market.

Besides, other significant moves include its approval to Verizon's $28.1billion takeover of rival Alltel in the later half of 2008. The deal was approved by the five-member panel on the condition that Verizon sells its network operations in 105 markets where its service overlaps with Alltel's.

The ruling came a week after Verizon won approval from the US Department of Justice (DoJ), after agreeing to divest assets in 100 markets, across 22 states.

Around the same time, FCC gave green light to Sprint Nextel's plan to combine its WiMax business with Clearwire. The collaboration is valued $14.5 billion.

Regulatory barriers:

The FCC’s spectrum management policies are perceived to pose as an obstacle to new entrants from entering the mobile telecommunication market.

Government control of spectrum allocation and assignment has the potential to create a barrier to entry into markets for mobile communications services by restricting the amount of spectrum allocated to CMRS and by requiring providers to obtain a government-issued license in order to use such spectrum for the provision of CMRS.

However, the Commission has now created new policies that reduce any potential entry limiting effects of government-controlled spectrum allocation and assignment.

Non-Regulatory Barriers to Entry

Three types of various non-regulatory entry barriers can be noted. All three bottlenecks delve into separate spaces of the difficulty of entering an industry.

The first type of entry barrier is placed by advertising expenditures, an expenditure that can neither be resold nor be transferred to prospective buyers, making such expenditures irrecoverable or sunk.

In such cases, incumbents would have incurred the sunk costs, but not the entrant. Thus, the entrant is rounded with higher incremental cost and incremental risk associated with its move of entry.

The second type of entry barrier is erected by the economies of scale. During such a scenario, companies lower the cost per unit of producing and distributing a product as the volume of output expands.

The more extensive economies of scale are, the larger the minimum efficient scale is relative to the size of the market.

Therefore nascent firms are forced to either produce at optimal scale and risk the gloomy market price or 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.

All three types of entry barriers have the potential to afford incumbent carriers first mover advantages over latecomers. Therefore, it is possible that the three types of entry barriers are significant in mobile telephone service.