AT&T Mobility since its T-Mobile merger was shot down is attempting smaller spectrum acquisition deals like the one they had with Qualcomm that was approved. Despite AT&T losing some AWS spectrum to T-Mobile as part of the breakup agreement they gained some licenses to 700 MHz airwaves from Qualcomm and now want more from 700 MHz LLC even if threatens any future hope of 4G LTE Interoperability (700 MHz Interoperability 12-69). To submit non-docketed comments/pleadings or confidential pleadings to the FCC regarding this application groups or individuals participating must have registered with the FCC to participate in Universal Licensing System proceedings. Once logged in a pleading for ULS File Number 0005262760 which is the file number associated with this application can be submitted. Petitions to Deny this application are due by July 25th, 2012 with Oppositions due August 6th, 2012 and Replies due August 13th, 2012. I have already participated in this proceeding myself submitting my concerns stating why the deal should either be conditionally approved or denied. As it is much smaller than AT&T T-Mobile merger and is purely a spectrum swap there are less competitive concerns than there were for that proposed merger but some concerns do exist that need addressing.
As noted above the transaction(s) at issue here could further derail or threaten any future hope for 4G LTE device carrier interoperability among carriers offering 4G LTE services and as such the FCC should carefully review and evaluate all the evidence submitted for or against the transaction(s) at issue here. The FCC as I will explain in an upcoming article should implement and enforce 700 MHz interoperability rules which will benefit smaller carriers and foster greater competition. This is because the Big 2 carriers AT&T and Verizon have benefited from a non interoperable wireless market even making devices on their own networks incompatible with each other’s network. So not only are devices on AT&T’s network incompatible with those pof smaller carriers including Sprint Nextel, T-Mobile USA, MetroPCS, Leap Wireless (Cricket), U.S. Cellular, C-Spire (Cellular South) etc but devices on AT&T’s network are also incompatible with those on Verizon’s network and vice versa.
In 1984 AT&T in exchange for government permission to enter the computer equipment business agreed to a breakup of its subsidiaries into several Regional Baby Bells. The breakup was very beneficial for consumers and resulted in greater competition. Unfortunately, in the 2000s AT&T Corp., as it came to be known was allowed to re-merge with two of the original Baby Bells from the Ma Bell System: SBC Communications and later Bell South. Another Baby Bell MCI eventually become part of Verizon Communications which is a co-owner of Verizon Wireless.
What some people don’t know is in 1968 the FCC ruled that wire-line telephones had to be made compatible with any telephone company. The Carterfone decision as it was called paved the way for the innovation of the fax machine and allowed innovation in the phone equipment business that the AT&T monopoly otherwise sought to curtail. Today the wireless market for cellular phones and tablets looks a lot unfortunately like the phone equipment market pre Carterfone with wireless carriers allowed to dictate which handsets work with which carriers. It is imperative that this be resolved eventually for the benefit of the consumer.
Right now the Federal Communications Commission is accepting comments on a proceeding regarding interoperability rules for carriers with 700 MHz of wireless spectrum (12-69). They also have an open proceeding on Advanced Wireless Services (AWS) rules for holders of AWS spectrum (12-70). I would encourage anyone who has not had a chance to comment on these proposals to file comments as soon as possible in support of interoperability requirements for carriers using both 700 MHz and AWS spectrum. Furthermore, anyone wanting to contribute their opinion(s) on such rules are certainly welcome in doing so and public input is certainly a good thing. Otherwise the corporations against interoperability and any rules benefiting the public’s interest would be the only ones to speak out. We need to show their is support for pro consumer policies like these that also benefit smaller wireless companies and are thus pro competitive. AT&T Mobility and Verizon Wireless might not like these rules but the proposed rules benefit smaller companies and consumers a like.
I have already commented myself in these proceedings and mentioned having an open equipment market for cellular phones and tablets that can work with the carrier of the individual’s choice and would encourage others to do so as well. Please note that the FCC’s next Open Commission meeting is on Friday April 27th at which time they will vote on some proposed rules in proceedings related to standardized and enhanced disclosure pertaining to broadcaster’s public interest obligations (00-168) that while still open the commenting period for rules has passed, and on a few other proceedings related to USF contributions etc.
A few weeks back it was announced that T-Mobile USA which survived a takeover attempt from AT&T Mobility would layoff several call center workers. AT&T which has also laid off call center workers reacted saying their merger could have saved these jobs. Never mind the fact that many duplicative jobs would have been lost as a result of the merger in retail and engineering and that the takeover was anti-competitive as AT&T believes that it could have saved these jobs had the merger occurred.
AT&T is now publicly criticizing the FCC like a sore loser upset at the denial of their merger. Even though they got a nice consolation prize in the form of 700 MHz of unused wireless spectrum from Qualcomm that regulators allowed AT&T to acquire they want to resort to petty attacks against this agency. The fact is the U.S. Department of Justice and the Federal Communications Commission denied the merger because it was found to be anti-competitive and not in the public’s interest to have even fewer choices in the nationwide market for wireless service providers.
Their deceptive attempt to Monopolize Everything using their PR campaign “Mobilize Everything” rightly backfired on them and now they need to just move on. AT&T’s arrogance in assuming the merger was a done deal and suggesting to the public their opinion didn’t matter if they were opposed to the merger helped torpedo the takeover. From the start the “inevitable” merger of AT&T Mobility with T-Mobile USA was rightly under intense government scrutiny as it proposed making an already concentrated wireless market even less competitive. Fortunately, regulators were not willing to allow anymore consolidation on such a massive scale in the U.S. wireless market despite all of AT&T’s lobbying and advertising the merger was killed.
First off would like to wish all my readers a Happy New Year 2012. Secondly I know I’ve not updated my blog in a while as I’ve been kind of busy lately but hope to keep it more up to date in the new year. Since my last post Adobe announced they would discontinue mobile Flash development and AT&T has given up on merging its wireless business with T-Mobil. This decision from AT&T came after both the U.S. Department of Justice filed an antitrust lawsuit to stop the merger and the Federal Communications Commission Chairman proposed sending the case to an administrative law judge. Now one of the commenters on my previous posts about the AT&T T-Mobil merger made an interesting point stating that mergers in the current economy seem like a necessary evil stating that if big companies are going to go under it would be more beneficial for them to merge. However, the commenter replied in agreement that consumer choice though is being sacrificed particularly in the market for telecommunications. This comment was very well said and I do indeed worry about telecom and media consolidation. In the following passages will discuss how both the discontinuation of mobile Flash development and AT&T’s abandonment of the T-Mobil merger affects the mobile Internet.
When Adobe announced it would be discontinuing mobile Flash development after it had begun developing HTML 5 authoring tools critics of Flash began proclaiming the death of Flash and saying Apple’s late and great CEO Steve Jobs was right to exclude Flash from iOS devices including the iPad tablet computer and iPhone line of smartphones. However, let’s not get too carried away on the talk of Flash’s demise. Adobe Flash is not dead yet it lives on for desktop computer users and in the world of notebook computers. That being said it is true Adobe is ending mobile development of its Flash Player which Apple criticized as a buggy and insecure program. Despite what you think of Adobe’s Flash Player Apple in their criticism of Flash made some hypocritical remarks. In the open letter Steve Jobs had written against Flash he talked about how it was a proprietary and closed development platform as opposed to HTML 5. The truth is that Apple products are also proprietary and while they use some open source technologies in some of their products their hardware and software is just as proprietary.
In fact Apple uses H.264 a proprietary web codec for HTML 5 video in a number of its products including QuickTime. While H.264 is the current industry standard for HTML 5 video as it is also supported by Blu Ray Disc Players and associated media Google has developed the royalty free and open source WebM codec for HTML 5 video. Google has also dropped support for H.264 in its Chrome web browser since producing WebM which is supported by the Mozilla Foundation, Opera and a number of organizations in the free software movement. Now some have speculated on why Apple opposed Adobe Flash in the first place from being run on iPhones, iPods and iPads noting that Apple probably wants to protect sales of mobile apps in its App Store from competition via web apps developed for use with Flash.
Of course when the iPhone & iPod Touch were first launched there was no App Store and Apple told developers who wanted access to Apple’s devices to make mobile web apps using HTML 5 which some certainly did and today users have a choice between those web apps or the native apps included in Apple’s App Store. Don’t like the selection of apps in Apple’s App Store and their lock-in you can jail-break your devices to run non Apple approved apps from Cydia and other app stores but you run the risk of voiding your warranty. That being said another reason why Apple may have chosen to prevent users from running Flash besides protecting App Store sales/profits is the fact that when Adobe Flash arrived it may have cut into Apple QuickTime’s market share for in browser web streaming. Also Google as noted earlier chose an open royalty free specification for HTML 5 video with the development and launch of their WebM codec. Google decided to support mobile Flash since Apple wasn’t and at the same time support an HTML 5 video format Apple didn’t and hope to be able to undercut Apple using Flash along with its own HTML 5 format.
As for AT&T’s abandonment of the T-Mobil merger in a way this is very good news for consumers. First the future of the mobile internet as an open platform which would have been seriously threatened by this merger is looking brighter. However, even without the merger there is insufficient competition in the wireless market. Big carriers continue to claim a spectrum shortage to justify monopolistic takeovers when it is the smaller carriers with insufficient spectrum. In the case of the AT&T T-Mobil merger after AT&T tried to justify the merger by claiming it faced a spectrum shortage they proved otherwise when the Justice Department filed its suit against the merger asking regional carriers like MetroPCS and Leap Wireless to buy some spectrum to save the T-Mobil deal. So which is it AT&T? Do you lack spectrum in which case you couldn’t afford to sell off spectrum or do you have sufficient spectrum? You can’t have it both ways. Fortunately the Justice Department and FCC saw right through Ma Bell’s deception. FCC licensees are required in their filings to be transparent and to not deceive the Commission. As a penalty for doing so licensees can have their licenses revoked. However, the FCC tends to only do so for smaller companies that lie. This double standard should be stopped. If AT&T willfully and purposely lied to the Federal Communications Commission they should have their licenses revoked.
Also the fact that the Communication Workers of America (CWA Union) supported the merger was rather unsettling. It figures they supported the merger because by their calculations the merger could lead to more union jobs but overall the record revealed a net loss in overall American jobs post-merger. Moreover regulators correctly recognized that T-Mobil was responsible for many industry firsts like being the first carrier to offer Google Android smartphones and for being a low cost innovator. Without T-Mobil in the market prices for wireless phone service could skyrocket and the market would have been a near duopoly with just 2 companies AT&T Mobility and Verizon Wireless controlling 80% of the market. Today’s Twin Bells would become Twin Cells with Ma Bell (AT&T) erecting a Ma Cell over the wireless market. Sprint Nextel which would have become a distant third in the market would be substantially weaker and could easily be bought up by one of the remaining big two carriers leaving the post-paid national wireless market with only 1 or 2 national carriers remaining. Ever since the Federal Communications Commission classified broadband via cable modems in 2002 as a Title I information service competition in broadband has begun to decline. Worse still was the 2005 ruling extending that status to telecom companies with DSL modems supplying broadband. Today there is more competition for slow dead-end dial-up Internet access than there is for broadband or mobile broadband. What’s needed are competition mandates for broadband providers. Next time will discuss Verizon Wireless’s non compete agreement with cable companies in exchange for buying unused wireless spectrum that could spell the death knell for FIOS services.
Even before the U.S. Department of Justice filed its antitrust lawsuit to block the anti competitive, anti consumer jobs killing AT&T T Mobil merger apparently the U.S. Federal Trade Commission and Federal Communications Commission had serious concerns about the deal and the proposed transaction for AT&T to also acquire Qualcomm’s spectrum. In fact the Federal Communications Commission has launched a joint investigation of both proposed mergers since it rightly decided to combine its review of both deals. If you too are rightly concerned by the possibility for greater abuse by AT&T if either merger or both mergers were approved suggest emailing a letter to the U.S. Federal Trade Commission’s Competition Bureau via firstname.lastname@example.org.
If you do so I would suggest your letter to the FTC include your name, mailing address and a daytime telephone number. Also suggest submitting any critical comments of either or both of AT&T’s proposed mergers in the FCC’s docket regarding the proposed AT&T T Mobil merger (11-65) asap. You can also write the Federal Communications Commission via e-mail. Each Commissioner has their own email address. The Chairman’s is email@example.com, Commissioner Michael Copps can be emailed via firstname.lastname@example.org, Commissioner Mignon Clyburn’s email is email@example.com, and Commissioner Robert McDowell’s email is firstname.lastname@example.org. You can also email comments to the FCC at email@example.com and/or firstname.lastname@example.org. Finally even though Justice has already filed its antitrust lawsuit and a trial date has been set for next February (2012) suggest consumers opposed to either or both mergers email the US Justice Department’s Antitrust Division if they haven’t done so already via email@example.com and emailing the US Justice Department directly at AskDOJ@usdoj.gov.
Internet companies especially those rightly supporting Net Neutrality should worry about the potential of the job killing, competition and consumer choice reducing AT&T T Mobil merger. The merger which would likely result in higher prices would also give AT&T more market power and increased incentive to discriminate against innovators and users online. Nonetheless some technology companies like Facebook, Microsoft, Oracle, and Yahoo have unfortunately chosen to support the merger. Whether or not they are aware of the risks to the wireless market and chose to ignore them or naively chose to believe AT&T’s empty promises that if it wins approval for the deal it will expand mobile broadbnd access is unclear. One thing is certain though one web company Google is strangely silent on the issue of this merger.
Google which has been a longtime supporter of Network Neutrality at least up until last year when it reached a controversial deal with Verizon Wireless on a Network Neutrality framework exempting nondiscrimination requirements from wireless services has been silent on this telecommunications merger. Last year when they announced their pact with Verizon Wireless they were criticized by Facebook and a number of public interest groups and pro Net Neutrality activists.
On the issue of Microsoft’s support for the merger remember this is the same company taken to court by antitrust regulators in the US Department of Justice for trying to illegally monopolize the market for web browsing software. So Microsoft’s no champion of the Open Internet and their past history proves such. However, for Google a previous supporter of openness and nondiscrimination to have made that pact with Verizon Wireless was really outrageous. What’s more outrageous is their silence on the issue of the AT&T T Mobil and Qualcomm mergers as well as Facebook’s support of the merger.
Previously, I have written extensively about the Justice Department’s decision to use its authority to mandate competition and protect free markets with antitrust law from monopolies to block AT&T’s T Mobil merger. Now I want to write a bit more though on Network Neutrality. Network Neutrality rules of nondiscrimination are essential to maintaining the free and open Internet as a level playing field for new startups to compete, innovate and succeed or fail on their merits. In an Open Internet small businesses can grow to become big businesses and don’t need permission to innovate. My next post will describe Network Neutrality in further detail.
Don’t let big cable and phone companies succeed in redefining Network Neutrality a government takeover of the Internet. It is an absurd and false argument to trick individuals into opposing what are in fact protections for the Open Web that prevent these corporations from discriminating against us online. As I said my next article will discuss this in more depth but for now just know that Network Neutrality are a set of nondiscrimination rules preventing unfair ISP discrimination. ISPs should not be able to exempt their own services from unnecessary and unfair bandwidth caps they place on user’s Internet connections to make using competing applications and services on the Web inconvenient. So please spread the word and prevent the telecommunications industry from distorting Network Neutrality.