@jbtaylor on tech

Today Sprint CEO Dan Hesse joined the CEOs of Atlantic Tele-Network, Bluegrass Cellular, C Spire Wireless, Cricket Communications, NorthwestCell, T-Mobile USA, and RCA - The Competitive Carriers Association in sending the following letter to the members of the Congressional Conference Committee considering the JOBS Act, H.R. 3630.

Dear Senators and Representatives,

We write to call your attention to language currently contained in Title IV of H.R. 3630 (the "JOBS" Act) that could cause the U.S. wireless market to revert back to the innovation and competition starved market that existed before Congress granted the FCC spectrum auction authority in 1993. The JOBS Act contains provisions that could provide significant benefits to smaller carriers and consumers by putting additional, high-quality spectrum into the marketplace. However, Section 4105 of the Bill, as currently worded, would undercut those benefits by prohibiting the Federal Communications Commission from considering existing spectrum holdings in determining a carrier’s participation in future spectrum auctions. The proposed provision would substantially limit the FCC’s ability to promote competition and a competitive wireless marketplace for consumers throughout America. It would facilitate spectrum warehousing, inefficient use of scarce spectrum resources, and reduce spectrum auction revenues to the U.S. Treasury. Accordingly, we ask Congress to support fair spectrum auctions that promote competition in the mobile broadband marketplace by eliminating Section 4105.

Congress first granted the FCC authority to design and conduct spectrum auctions in 1993; since then, the agency has conducted more than 80 auctions raising tens of billions of dollars for the U.S. Treasury and issuing thousands of new spectrum licenses. The FCC has used its auction design authority cautiously and wisely. It has adopted auction eligibility restrictions only when needed to promote competition and avoid excessive spectrum concentration in the hands of a few carriers. Stripping the FCC of its auction design discretion would disserve the public interest by permitting unchecked participation by the two largest, best-funded wireless carriers in future spectrum auctions. That would discourage smaller competitors from participating in future auctions thereby reducing auction revenues and limiting wireless competition and innovation.

In the early 1990s, Congress and the FCC were faced with a wireless duopoly. Congress responded by giving the FCC the auction eligibility flexibility it implemented to auction the spectrum which the undersigned wireless carriers used to compete in the marketplace. Congress’ challenge today is to authorize the FCC to conduct incentive auctions to bring additional spectrum to market while preserving the FCC’s ability to manage auction eligibility and structure to promote the benefits of vibrant wireless competition for consumers and the economy.

We urge you to safeguard America’s mobile broadband future by ensuring that FCC auction authority is renewed by taking the concrete steps outlined above.

Kent German, the CNET columnist, always has strongly expressed opinions. This week's column is no exception. Although his rhetoric is unusually charged, I think most consumers share his view that it's time for AT&T to stop whining, which is exactly what AT&T's CEO Randall Stephenson did on AT&T's Q4 earnings call this week.

The company's earnings were hit by the T-Mobile break fee and Stephenson rivaled Jim Cicconi, AT&T's top lobbyist, in his efforts to play the victim card. Stephenson essentially complained that the FCC is out to get his company and everyone else in the industry, refusing to approve mergers and spectrum transactions.

None of that is backed up by facts though.

As FCC officials pointed out in response to media inquiries, the FCC has approved more than 150 commercial mobile transaction applications last year alone and more than 300 in the last two years, including AT&T's nearly $2 billion acquisition of Qualcomm's spectrum.

(I would point out, the FCC refused to apply any of the conditions that competitors and consumer groups had sought for the Qualcomm deal -- AT&T got everything it wanted with the deal. This was the 15th major AT&T deal that the FCC has approved over the last 15 years.)

This whining and cherry picking of facts by AT&T wasn't limited to Stephenson this week. As I pointed out earlier, AT&T's top FCC lobbyist, repeatedly and falsely charged Sprint with "disinvesting" (sic) in its network in Oklahoma and Kansas -- the charges were made in blog posts where the lobbyist whined and complained about the FCC's decision to ensure that data roaming rates are affordable for all consumers.

Mind you, this was an FCC decision supported by every major consumer group and everyone in the wireless industry except for AT&T and Verizon, but AT&T's lobbying team, chose to single out Sprint as some sort of bad actor.

It's laughable in the minds of observers, of course. Many see it as payback for Sprint's role in opposing the T-Mobile takeover in 2011.

While that's an easy conclusion to draw, it's too simple for me. I have a different view.

I don't think AT&T really has a beef with Sprint. Or for that matter, with the FCC. (Sprint and the FCC are mere strawmen.)

No, AT&T's problem is with consumers. When faced with the choice with doing the right thing for its customers or squeezing more money out of consumers wallets, they almost always make the choice which screws consumers.

That's what the proposed takeover of T-Mobile was all about. That's what the Qualcomm transaction was about. That's what the data roaming fight was about. That's what the special access fight is about. I could go on, but you get the point.

And frankly, for far too long, too many of the wireless carriers have followed that path. There's a reason why so many consumers have a love/hate relationship with their wireless carrier.

Fortunately, because of competition, companies like Sprint and T-Mobile and U.S. Cellular and C-Spire and Cricket and Metro PCS are putting pricing pressure on the Twin Bells. This is how competition benefits consumers.

But given the vast resources of the Twin Bells -- be it spectrum, scale, lobbying muscle, manufacturer relationships, advertising spend, you name it -- it's becoming increasingly difficult for other carriers to bring that kind of competitive pressure to the wireless industry.

Sprint's CEO Dan Hesse summed up my personal views best in a conversation with GigaOM's Kevin Fitchard late last year:

"When AT&T announced its intention to take over T-Mobile USA," Hesse said, "It made me realize the industry has been gradually moving toward being a duopoly and how tenuous the competitive situation is in the U.S. wireless industry. . . . [Before the merger was announced] I could see this gradual creep in size and market dominance of the big two — growing gradually each year, though not to the extent that it became alarming. But the attempted acquisition of T-Mobile set off all sorts of alarms and had you step back and notice what’s been happening each year for a number of years."

There was a time in Washington, D.C., where I'd look for groups like Public Knowledge, Free Press, CCIA, RCA, RTG, COMPTEL, Consumers Union, MAP and others to lead the charge in fighting for competition. No doubt, these groups have long stood up for consumers and competition in telecom public policy fights. And they will continue to do so on behalf of all consumers.

But given the consumer outrage over the proposed T-Mobile takeover, the consumer petitions which forced Verizon and Bank of America to back off of new fees, and the unbelievable citizen action to stop SOPA and PIPA, I agree with my friend and colleague Maura Corbett, I think our politics has fundamentally changed.

The interest groups in D.C. still play an important role, but the real power is in the hands of consumers themselves. And that power is far greater than any trade association or public interest group will ever wield.

Businesses, large and small, should not ignore this development. Neither should the politicians.

It's my belief that the smart ones won't.

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Of course, it bears repeating that this is my personal blog and these are my personal views, not those of my employer. For more of a discussion of that, visit my blog's home page.

A few weeks ago, Kevin Fitchard, a writer with GigaOm, interviewed Sprint's CEO, Dan Hesse, to ask him about 2012 and what to expect from Sprint in the new year. Kevin's story was published today.

Dan explained a lot about our strategy and focus at Sprint, but he also shared his observation that increasingly in the wireless industry, there really isn't a "Big Four" -- AT&T, Verizon Wireless, T-Mobile and Sprint -- but really a "Big Two".

Dan's right. That's why during our fight to stop AT&T from swallowing up T-Mobile, we called AT&T and Verizon, "Twin Bells".

You see, Verizon Wireless and AT&T Mobility, aren't really wireless companies at all, but arms of much larger descendants of the original Ma Bell phone system. And they are marching in lock step towards a duopoly which will harm consumers.

Take Verizon's recently proposed spectrum deal with the cable companies. The New York Times editorial board pronounced it, "worrisome".

The Times is right to be worried. Anyone who cares about competition in the wireless industry should be.

But being worried is useless.

What consumers need to do is speak up loudly and vocally. That played a huge role in defeating the T-Mobile takeover and, more recently, convincing Verizon to back off from instituting a new $2 fee.

I'm convinced that kind of consumer activism is essential to reign in the Twin Bells in 2012.

p.s. Remember, this is my personal blog and does not necessarily reflect the views of my employer.

On Friday, Sprint CEO Dan Hesse gave a speech in San Francisco where he talked about Sprint's commitment to operating the company in the a greener, more sustainable manner. Sprint has made great strides in recent years and people are taking notice. In its most recent rankings of the greenest companies in America, Sprint was ranked number six.

Dan also talked about how the wireless industry can help the rest of the country's businesses operate in a greener manner, too. Want more employees telecommuting and staying off the freeways? Wireless modems mean people can connect anywhere. Want fewer in person meetings? Try video chats via a 4G connection.

Dan pointed out however that the innovation in the wireless industry that makes this greener future possible was in jeopardy if the government allowed AT&T to takeover T-Mobile.

Media picked up on this, not surprisingly, when Dan said that approval of the T-Mobile takeover would, "stifle innovation and put too much power in the hands of just two carriers," meaning AT&T and Verizon.

Well AT&T's top lobbyist, former Bush White House official Jim Cicconi, couldn't let that stand. He immediately penned a blog post saying Dan's remarks and his point of view were, "way off-base."

• In AT&T's world it's "way off base" to point out that T-Mobile is a low price carrier with a good reputation for customer care and AT&T has high prices and the worst reputation for customer service in the industry.
• It's also "way off base" to point out if this takeover of T-Mobile is approved, AT&T and Verizon will control almost 75% of the wireless market and drive up the prices you pay for wireless service. They also will strengthen their control of the special access market, which is a key cost driver in our industry.
• AT&T also thinks every major consumer group in the country is "way off base" including Consumers Union, Free Press, Public Knowledge and National Consumers League who all oppose AT&T. AT&T always thinks any consumer advocate is "way off base." After all, those are the people who point out just how bad AT&T's network is.
• AT&T thinks the Rural Cellular Association and the Rural Telecommunications Group and the hundreds of their member companies are "way off-base". These are the carriers who joined with Sprint to fight for the ability of consumers to use their smart phones to check email, surf the Net and use Net-connected apps anywhere they travel in America. AT&T thinks those consumers who expect that are "way off-base".

In fact, the more I think about it, AT&T thinks EVERYONE who disagrees with its political agenda is "way off-base".

Here's what I think.

Despite the fact that AT&T spent more than $15 million lobbying Congress and the Obama Administration last year, despite the fact that no company in America gave more in campaign cash to Congressional candidates from 1989 to 2010, despite the fact that AT&T is one of most powerful political forces in American politics, AT&T will lose.

AT&T will lose not because Sprint will beat them. We won't beat them. But you will.

You see, this isn't about AT&T vs. Sprint. This is about AT&T vs. everybody. You know, all those people which it calls, "way off base."

We call them consumers. People like you.

If enough people like you contact the FCC and the Justice Department and Congress and the White House, you will stop AT&T.

But you have to act.

The people I work with at Sprint can never match AT&T's lobbying muscle. AT&T is much too big for that. But AT&T can't stop you, if you care enough to stand up for yourselves.

Here's a post which explains how you can stand up to American Telephone & Telegraph, the corporation who thinks you're "way off base."

As I told Politico last night, I think lawmakers in Washington, once they learn the facts about how this T-Mobile takeover will hurt their constituents, will stick up for consumers and demand that the Department of Justice and the FCC block this deal.

But you have to demand that from your Members of Congress.

AT&T is hoping that you're not paying attention and that if you are paying attention, you won't make the effort to speak out.

Prove them wrong and point out that you think AT&T is "way off-base."

If you do, AT&T will strike out in its attempt to takeover T-Mobile.