Competition in the U.S. wireless industry has eroded and is worsening due to continuing consolidation and concentration among companies, Federal Communications Commission member Michael Copps said on Thursday.

The FCC was due to issue its annual report on the state of competition in the wireless industry in 2008 and a portion of 2009 at an open meeting Thursday.

In a written statement, Copps, one of three Democrats on the five-member panel, said some findings are worrying.

Specifically, the report confirms something I have been warning about for years -- that competition has been dramatically eroded and is seriously endangered by continuing consolidation and concentration in our wireless markets, he said.

We are going to need an extra dose of vigilance going forward and use whatever policy levers we have available to ensure good outcomes for American consumers, he said.

The wireless industry is largely dominated by AT&T Inc, Verizon Wireless, Sprint Nextel Corp and T-Mobile, a unit of Deutsche Telekom AG. Verizon Wireless is a joint venture between Verizon Communications Inc and Vodafone Group Plc.

The industry has seen explosive demand from consumers increasingly surfing the Web on mobile devices, especially smartphones. Demand for data is increasing faster than demand for voice services.

In August, U.S. communications regulators launched an inquiry into competition in the wireless industry. Under recommendations made in the National Broadband Plan, the FCC is considering ways to provide more airwaves to wireless companies to meet a growing demand for mobile devices.

(Reporting by John Poirier; editing by John Wallace)