Today, IIA Broadband Ambassador Navarrow Wright has a great piece on The Huffington Post highlighting the need to ensure there is an “even playing field” when it comes to communities connecting to the digital economy. Here’s a taste:
The importance of wireless technologies became a national priority earlier this year when President Obama talked about the need to deploy next-generation 4G wireless networks to 98% of the nation during his 2011 State of the Union Address. Likewise, the Federal Communication Commission has become acutely attuned to the need for additional greater spectrum in order to sustain wireless growth and demand..
Because of the increasing importance of wireless accessibility and the need to improve the more efficient allocation and use of spectrum, the proposed merger of AT&T and T-Mobile represents a very important measure for the future of wireless-enabled entrepreneurship, especially for people of color. Regardless of the companies involved in this deal, the end result holds a greater promise for consumers and businesses alike, particularly for those individuals who stand to lose access to a 4G LTE network if this doesn’t come to fruition.
In response to the Department of Justice’s move to block the merger of AT&T and T-Mobile, the Communications Workers of America has released a new report on the effect blocking the merger will have. Titled, rather bluntly, “Blocking the AT&T/T-Mobile Merger will Harm Consumers, Communities & the Economy,” the report covers everything from AT&T’s commitment to expand 4G LTE, to the effect the merger will have on much-needed job creation.
The entire report is a must-read, but there are a few points made that are worth highlighting, beginning with the argument that blocking the merger will be good for preserving competition. As CWA states:
“[T]here is no long-term future for a stand-alone T-Mobile as an effective competitor: it has neither the spectrum nor the capital to create a competitive network utilizing the latest wireless technology (called 4G LTE). In January 2011 the CEO of T-Mobile’s parent company, Deutsche Telekom (DT), stated that DT would not provide the capital for T-Mobile’s 4G LTE deployment. T-Mobile also is on a downward trajectory suffering from declining revenue, eroding profit margins and increasing customers defections.”
With Verizon, AT&T, and now Sprint making the shift to 4G LTE technology, the fact that T-Mobile will soon be left behind regardless of the merger continues to be overlooked. And given that only AT&T and T-Mobile are compatible when it comes to network technology, the idea that T-Mobile could simply merge with someone else simply isn’t realistic. From the report:
There are two separate technological family trees that are not easily compatible. GSM based systems have evolved through UMTS, HSPA+, LTE and, the next step, LTE Advanced. CDMA based systems have evolved to EVDO.
• The merger between AT&T and T-Mobile creates technological synergies because each of these companies utilizes GSM and HSPA based networks.
• A merger between Sprint and T-Mobile (these companies were in merger discussions) would have experienced significant technological challenges because the two companies utilize different and incompatible technologies. T-Mobile’s systems are GSM based while Sprint’s systems are CDMA based.
As for AT&T’s ability to expand its 4G LTE network to cover nearly every corner of America — a key point, as it dovetails with President Obama’s State of the Union pledge to bring advanced mobile broadband to everyone — CWA points out such an expansion wouldn’t be feasible without the merger due to capacity and spectrum constraints:
AT&T’s other options could not remotely approach the merger in terms of increasing capacity, utilizing spectrum more efficiently, improving service and expanding 4G LTE deployment… [I]t would take AT&T eight years to obtain and activate the number of cell sites it will obtain from T-Mobile. AT&T also could not depend on a possible federal auction to reallocate spectrum because it is a multi-year process that needs Congressional approval, a FCC rule making, the actual auction and then a period for relocation of incumbent licenses and integration of existing network and equipment with the spectrum — if the bid is successful.
These are just a few of the salient points CWA makes about the merger. There’s much more to be found in the full report, including the effects blocking the merger will have on job creation and efforts to close the digital divide. You should definitely dig in.
To maximize productivity in the 19th century, artificial light was created to conquer darkness. Today, high-speed Internet connectivity overcomes distance and enables transformative changes in the economy and quality of life for rural areas. In a very real sense broadband is the light bulb of the 21st Century.
Recently, our Honorary Chairman Rick Boucher appeared on the podcast The Flint Report for an in-depth discussion about rural broadband expansion, job creation, and the proposed merger of AT&T and T-Mobile. You can download Part 1 of the podcast here, and Part 2here.
Our Honorary Chairman Rick Boucher has been an op-ed for the Nashua Telegraph on the importance of expanding mobile broadband access in rural communities. Here’s a taste:
Broadband is the great equalizer. It can help contractors and architects check prices and place orders from a construction site. Professionals in health, education and fields with licensing requirements can stay abreast of requirements through online study. And farmers can quickly connect with restaurants that want the latest information on currently available produce.
Rural communities have long enjoyed a high quality of life. Broadband is a further enhancement that also spurs a wide range of business opportunities.
With the Justice Department suing to stop the merger of T-Mobile and AT&T, T-Mobile president and CEO Philipp Humm has written an op-ed for the Seattle Times to highlight the company’s reasons for the merger:
The proposed merger of T-Mobile and AT&T will solve an inexorable need for increased network capacity and speed, and it advances the public interest in many different ways. That’s why we at T-Mobile look forward to a speedy settlement of the Justice Department’s lawsuit — a step that will allow consumers to enjoy the many benefits of this deal.
Humm also makes an important point about why time is of the essence when it comes to freeing up more spectrum for wireless use, a key reason for the merger:
Relying on the government to solve this is simply not a viable option, as proposed solutions such as a government-mandated reallocation of spectrum from national defense, broadcasters and commercial operators will take years to accomplish.
The Hill‘s Brendan Sasso reports six members of the House Energy and Commerce Committee have sent a letter to the DOJ and FCC in support of the merger of AT&T and T-Mobile:
“In challenging economy times, we need to be especially thoughtful in our approach to private sector investments and potential job growth as we can ill afford to lose valuable opportunities when they arise,” wrote Reps. John Shimkus (Ill.), Adam Kinzinger (Ill.), Steve Scalise (La.), Brett Guthrie (Ky.), Marsha Blackburn (Tenn.) and Phil Gingrey (Ga.).
“In addition, to the extent that either of your agencies believes that the transaction should be approved subject to certain conditions, such conditions should only impact the parties to the transaction and be narrowly tailored to address any specific harm attributable to the transaction.”
In an op-ed for the Detroit Free Press, our Co-Chairman Jamal Simmons writes about the ongoing problem of America’s digital divide and how the merger of AT&T and T-Mobile will help address the problem. Here’s a taste:
The Internet transforms daily life and delivers opportunities. Millions of Americans are already taking advantage of the benefits of broadband, from entertainment to on-demand education to job searching and better health care options. But too many disconnected Americans are being left behind.
The AT&T/T-Mobile combination is the fastest way to expand wireless broadband to even more Americans—without drawing on scarce American taxpayer dimes. The FCC just has to say yes.
Last July, 10 attorneys general sent a letter to the Department Justice and Federal Communications Commission in support of AT&T’s merger with T-Mobile. Today, those same attorneys general reenforced their support. From their new letter to the DOJ and FCC:
Within the last two weeks, AT&T announced that in connection with the merger it would bring 5,000 jobs back to the U.S. and it committed to no job losses for wireless call center workers at AT&T and T-Mobile on the payroll at the closing of the merger. We again urge both DOJ and the FCC to focus on ways to resolve specific competitive concerns so this merger can proceed and deliver the significant benefits not only for wireless consumers, but also for investment and jobs that will support economic growth.
Sara Frier of Bloomberg reports Verizon Chief Executive Officer Lowell McAdam spoke out today about the proposed merger of AT&T and T-Mobile:
“The AT&T merger with T-Mobile is kind of like gravity, it had to occur,” McAdam said at an event in New York today. If the government wants to stop the takeover, it needs to have a plan to distribute spectrum and ease the crunch some carriers are facing, he said. “We’re going to watch that very closely.”
In other merger news, AT&T is meeting with the Department of Justice today in federal court in an attempt to reach a settlement. Stay tuned…
With AT&T’s merger with T-Mobile still receiving scrutiny in the Beltway, things are heating up in the advertising world. Since the merger was first announced, AT&T has been touting the benefits of its joining with T-Mobile, including the expansion of AT&T’s 4G LTE network to the vast majority of America. Rival carrier Sprint, meanwhile, has attempted to counteract the merger’s benefits for consumers by hitting hard on the competition angle.
Today, things heated up a notch with AT&T running an ad against Sprint in Washington D.C.. As Shira Ovide of the Wall Street Journalreports:
As AT&T Inc. works to convince regulators and lawmakers on the merits of its proposed takeover of T-Mobile USA, the telecom giant said it is launching an advertising blitz in Washington focused on its original selling point for the deal: better wireless service.
“In case you’re wondering why Sprint is trying to kill the AT&T/T-Mobile merger… It’s all about spectrum,” reads the text of the AT&T ad slated to run starting Tuesday in publications popular on Capitol Hill, such as the Washington Post, Politico and the Hill newspapers.
Sprint has long claimed AT&T’s spectrum concerns are off the mark, which is no doubt why AT&T decided to highlight Sprint’s industry dominance in spectrum holdings. Meanwhile, Sprint is also receiving blowback on the labor front, with the Communications Workers of America — which has a good relationship with AT&T, given the telecom’s union-friendly stance — taking out ads of its own with the headline:
Sprint — a creator of American jobs? We don’t think so.
At the Wall Street Journal, L. Gordon Crovitz has a must-read piece on wireless competition, the AT&T/T-Mobile merger, and the real threat to a healthy wireless ecosystem:
The great threat to competition for wireless data and mobile phones is not mergers—it’s government failure to free enough spectrum to meet demand. Deutsche Telekom agreed to sell T-Mobile, the fourth-largest wireless provider in the U.S., because it couldn’t get enough spectrum to compete and wanted out of the U.S. market. For AT&T, the $39 billion purchase price was the best way to get the spectrum and local cell towers it needs to serve 97% of U.S. consumers with a new 4G LTE network—a technology currently provided only by Verizon. In other words, this merger would mean more competition, not less.
Our Honorary Chairman Rick Boucher has an op-ed for The Gazette in Iowa on the benefits of the AT&T/T-Mobile merger for rural America. Here’s a taste:
[The] promise of expansive rural opportunity leads me to support AT&T’s proposed merger with T-Mobile. The companies combining their strengths will bring 4G LTE wireless broadband access, with data speeds rivaling today’s fastest wired connections, to more than 97 percent of Americans. President Obama has set a goal for 98 percent of the population to have broadband access within five years; the combination of AT&T and T-Mobile very nearly achieves the president’s goal and does so with private capital, not taxpayer funds.
In more Boucher news, the former congressman recently sat down for an interview with WebProNews. Here’s video of the conversation:
Yesterday, Rep. Heath Shuler (D-NC) and fourteen other House Democrats sent a letter to President Obama “urging him to swiftly resolve concerns with the proposed transaction between AT&T and T-Mobile USA.” From the official press release:
“The road to economic recovery is long, but there is an opportunity before us to immediately create jobs and spur infrastructure investments and technological innovations that will create jobs for years to come,” said Rep. Shuler. “By settling the proposed merger of AT&T and T-Mobile USA we can put thousands of Americans back to work and promote economic development across the country. I urge the President to strongly consider the vast benefits this merger will have on job creation and the economy and quickly resolve any concerns the Administration may have with the proposal.”
The full list of co-signers:
Rep. John Barrow
Rep. Mike Ross
Rep. Dan Boren
Rep. Dennis Cardoza
Rep. Joe Baca
Rep. Leonard Boswell
Rep. Ben Chandler
Rep. Jim Costa
Rep. Henry Cuellar
Rep. Mike McIntyre
Rep. Mike Michaud
Rep. Collin Peterson
Rep. Loretta Sanchez
Rep. David Scott
Yesterday at the Newseum in Washington, D.C., we held our latest broadband symposium, “Realizing Deployment of Next Generation Broadband Services and Applications to All of America.”
Delivering the keynote address was former Pennsylvania Governor Edward Rendell, whose long history as an advocate for infrastructure investment made him well-suited to talk about the critical need to expand America’s digital infrastructure to everyone in the nation. As he said at the start of his keynote:
”Our ability to grow economically and compete in the global marketplace is tied to our infrastructure. And when people use the term infrastructure the average citizen thinks of roads, bridges, maybe mass transit. But infrastructure today has a totally different meaning and building America’s future is dedicated no just to rebuilding and revitalizing our transportation infrastructure, which we dearly need to do, but building out our infrastructure to make us competitive in the future. That means the electric grid, which needs serious work in this country, and of course broadband technology.”
Rendell then pivoted to the challenge wireless providers are facing to keep up with unprecedented demand for mobile data:
”Today, America’s wireless industry continues to grow based on consumer demand that’s at an all time high, and the staggering growth of mobile broadband traffic is creating an explosion in new services, new devices, content and applications.”
After calling for the government and wireless industry to keep working together in order to keep meeting demand, Rendell turned to America’s growing spectrum concerns:
”The looming spectrum crunch threatens to dampen the innovation of the high-tech industry. Driven by explosive growth from mobile broadband data, spectrum exhaust — particularly in urban markets — will challenge our ability to provide the services, the us of smartphones, mobile apps, and content to consumers. Clearly there’s a need for more spectrum and everyone knows it.”
One way to quickly address America’s looming spectrum crunch, Rendell said, is the approval of the AT&T/T-Mobile merger, which the former governor is advocating for. But Rendell also made clear spectrum wasn’t the only reason the merger should be approved, and used an example from his terms as governor to help make the point:
”You know, one of the things we did in Pennsylvania that was successful is triple our exports in the eight years I was governor. One of the ways we tripled exports is we went to small and midsized companies who had zero export business and we told them that there’s a market for what you produce. And we told them the countries where that marketplace existed. And we told them how to go about reaching that marketplace, how to do exports and how to deal with the local law and customers. But many of the companies couldn’t do the marketing because they couldn’t get the access [to broadband] they needed. And after this merger, I believe in great part they will.”
In closing his keynote, Rendell tackled regulations and economic growth:
”[W]e’ve got to continue to make the regulatory system work to do its job. Regulation is important. Any suggestion that we should strip away regulations just in return for economic growth is silly. We don’t have to do it. But we have to carry out those regulations in a common sense way that allows for growth and as strong a growth as we can.”
Then the two-term governor challenged America to think big again— not just in broadband deployment, but in all areas of infrastructure:
”We always did big things. We always were fearless. We always took on challenges. And now I think we’re at a critical juncture and that American spirit has to be unleashed again. That spirit will come and that unleashing will come from letting technology do its job.”
In today’s edition of the Chicago Tribune, the paper’s editorial board comes out strongly in favor of approval of the AT&T and T-Mobile merger. After highlighting the negative effect the Justice Department’s actions could have on job creation, the editorial board writes:
Access to advanced wireless Internet is the key. A merger of AT&T and T-Mobile would bring an under-served swath of America into the 21st century of high-speed mobile data communication. Much like the rural electrification movement of the 1930s, this deal offers a chance for many Americans to leap ahead technologically.
If Justice gets its way, progress will slow to a crawl. We think the FCC should approve the merger after obtaining appropriate concessions — and Justice should settle its case sooner, not later. Dragging out this proceeding stands to hurt a nation that can ill afford more damage from a government too often hostile to business interests.
At The Hill, Gautham Nagesh reports that in the wake of the Justice Department’s lawsuit to stop the merger of AT&T and T-Mobile, members of the House Energy and Commerce Committee want to have a discussion:
Chairman Fred Upton (R-Mich.), telecom subpanel chairman Greg Walden (R-Ore.) and Rep. Joe Barton (R-Texas) point to the nation’s unemployment rate and ask Attorney General Eric Holder and FCC chairman Julius Genachowski to what extent job creation and economic growth factor into their reviews of the merger.
“We have also seen press reports that DOJ’s ‘door is open’ if AT&T and T-Mobile USA want to address the DOJ’s ‘concerns’,” the lawmakers wrote. “We want to know what the DOJ’s specific concerns are and how these concerns relate to the impact on jobs and economic growth.”
Earlier this week, a federal judge asked both the DoJ and AT&T to mark September 21 on their calendars in order to talk through a possible settlement.
From an editorial in the Wall Street Journal responding to this week’s announcement that the Department of Justice is suing to block the merger of AT&T and T-Mobile:
The real threat to wireless competition is the lack of available spectrum for companies to use to meet public demand. The crunch has become acute as consumers snap up new smartphones, which enable them to watch videos, download data and more. The last auction was held in 2008 and there aren’t any new ones on the calendar. If companies can’t get the spectrum they need, they’ll restrict usage through higher pricing—exactly what the Justice Department says it doesn’t want.
The political interpretation of Justice’s actions was borne out yesterday when acting antitrust chief Sharis Pozen said that “our door is open” to AT&T if the company wants to resolve the government’s “concerns.” In other words, do our bidding on some regulatory or political business, and you can still get your merger. Meantime, Ms. Pozen and Justice are putting a legal damper on investment and innovation in one of America’s few dynamic industries, and that will do economic damage far beyond AT&T.
The Wall Street Journal‘s complaints about the DoJ’s actions are echoed by Geoffrey Manne of Forbes, who wrote shortly after the lawsuit was announced:
[E]ven on a national level, the blithe dismissal of a whole range of competitors is untenable. MetroPCS, Cell South and many other companies have broad regional coverage (MetroPCS even has next-gen LTE service in something like 17 cities) and roaming agreements with each other and with the larger carriers that give them national coverage. Why they should be excluded from consideration is baffling. Moreover, Dish has just announced plans to build a national 4G network (take that, DOJ claim that entry is just impossible here!). And perhaps most important the real competition here is not for mobile telephone service. The merger is about broadband. Mobile is one way of getting broadband. So is cable and DSL and WiMax, etc. That market includes such insignificant competitors as Time Warner, Comcast and Cox. Calling this a 4 to 3 merger strains credulity, particularly under the new merger guidelines.
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