@jbtaylor on tech

Congressional negotiators announced this morning that a compromise had been reached regarding an extension of a payroll tax cut and unemployment benefits. The Members of Congress who brokered the compromise indicated the legislative compromise includes provisions regarding future wireless spectrum auctions to be conducted by the FCC, as well as provisions to help fund an interoperable public safety broadband network.

The following statement can be attributed to Vonya B. McCann, senior vice president for Government Affairs, Sprint:

“Sprint supports the bipartisan compromise announced this morning by the House and Senate leadership and we hope that Republicans and Democrats in both the House and Senate will support it with a vote for final passage.

Sprint agrees with the Federal Communications Commission that all wireless carriers – small, regional and large – should have a meaningful chance to participate in wireless spectrum auctions. While we didn’t see the need to amend the statute, the compromise language approved by the conferees preserves the FCC’s ability to promote competition as it conducts future wireless spectrum auctions.

“In addition, the legislation includes language which provides funding for construction of an interoperable public safety broadband network which will give our country’s first responders much needed financial resources to protect the communities they serve.

"Supporting the final passage of this compromise legislation will help drive the expansion of high speed mobile broadband across the country thereby encouraging innovation, stimulating our economy and better meeting the needs of wireless consumers."

For nearly 30 years, Rick Boucher represented the people of Southwest Virginia in Congress with distinction. I personally was disappointed that he was defeated for re-election in 2010. Mr. Boucher has a keen understanding of many of the complex public policy issues in telecommunications. He was fantastic at forging compromises among his fellow Members of Congress. People on the Hill, even when they disagreed with him, liked him. I sure do. He was the kind of Congressman who most closely represented my personal views.

When he was defeated, Boucher became a lobbyist for Sidley Austin. "Sidley offers a truly unique opportunity for me to promote the growth of a public policy group that brings together lawyers renowned for their leadership in areas I have focused on for much of my career, such as technology, telecommunications, life sciences, financial services, energy and the environment,” said Mr. Boucher in a news release announcing his new job in May last year.

Sidley Austin is one of the most respected law firms and lobbying firms in Washington, D.C. The folks at Sidley proudly tout their work on behalf of AT&T -- they've represented AT&T and its predecessors for more than a century. There's an entire page on Sidley's website about its work for AT&T.

I have absolutely no problem with any of that.

But I am disappointed that Mr. Boucher continues to publicly advocate for AT&T's public policy positions without disclosing that he is now an AT&T lobbyist.

Today's oped in Roll Call on spectrum policy is the latest example. His oped today is not unique in its lack of disclosure.

Throughout the fight over AT&T's failed bid to acquire T-Mobile, Mr. Boucher gave dozens of interviews and penned dozens of opeds claiming that the proposed T-Mobile takeover would benefit rural America. Never once did he disclose his new relationship with AT&T.

Usually, Mr. Boucher would describe himself as the chairman of the Internet Innovation Alliance. Never once were readers told that IIA is largely funded by AT&T and the other large landline phone companies.

Mr. Boucher, were he still in office, may very well have advocated for AT&T's failed merger with T-Mobile. He also may have advocated for AT&T's public policy positions on spectrum and other issues. I would like to think so.

At least when he was in office, voters knew that AT&T was his third largest campaign contributor. That was fully disclosed and voters could decide for themselves the significance of AT&T's donations to his campaign.

But now that he is a lobbyist, he doesn't have to disclose his relationship to opinion page editors. He should though. I don't know one editor who wouldn't find that relevant and worth sharing with readers.

Disclosure in politics is important. Even though this is my personal blog and the views I present here aren't necessarily those of my employer, I think it's important for you to know I work for Sprint. That's why I disclose that on this blog and elsewhere online.

Mr. Boucher should do the same. Doing so would be consistent with his reputation he earned over many years of public service.

Last week, our friends at at Verizon and AT&T shifted into overdrive in their lobbying efforts to convince Congress to strip the FCC of its authority to set rules for wireless spectrum auctions. With such rules, the FCC ensures that the every wireless carrier -- small, regional and national -- has a meaningful chance to bid on wireless spectrum in an auction.

The FCC has had this authority in every auction since 1994. Since then, Republican and Democratic FCC Chairmen have run over 80 auctions which have brought more than $50 billion to the U.S. Treasury.

Under the law, Verizon and AT&T have obtained the lion's share of most valuable spectrum -- about 73 percent of all the spectrum under 1 GHz. That's why it's so odd that the Twin Bells are working to overturn this law which has greatly benefited both companies

So why are the Twin Bells working so hard to get their friends in Congress to do them a special favor, independent of any Congressional hearing or open debate? Basically, Verizon and AT&T fear that the Federal Communications Commission MAY use its authority to promote competition.

That's really hilarious, of course, because that's what the law REQUIRES the FCC to do.

So last week I was encouraged to see that media have begun to focus on the details of what's happening in the backrooms on Capitol Hill. And more importantly, it was good to see members of Congress are asking the Conferees to keep the law unchanged.

Sen. Herb Kohl, the chairman of the Senate Antitrust Subcommittee wrote that the legislation is, "a serious threat to competition."

Sen. Maria Cantwell wrote that the current language, "will hurt competition" and "benefit only the incumbent providers with the deepest pockets." (Maybe that's why journalist Karl Bode calls the provision "duopoly protection language.")

Senators Kohl and Cantwell are not alone. On Friday, a big voice for competition, the American Antitrust Institute, wrote that, "legislated constraints on the FCC’s ability to design incentive auctions – leaving less room for the agency to learn, change, and adapt – could undermine their potential benefit."

I was particularly heartened to see T-Mobile forcefully weighing in last week. Kathleen Ham, T-Mobile's vice president of Federal Regulatory Affairs, pointed out how it was former GOP Rep. Dennis Hastert of Illinois who argued for the provision in the law that has served to promote competition.

Hastert, who went on to be the Speaker of the House said, "we need to make sure that all qualified bidders will have the opportunity to participate in this new process ...This language will ensure that the FCC promotes competition ... thereby giving all potential bidders the opportunity to procure spectrum at auctions."

Speaker Hastert was right then, of course. And so are Senators Kohl and Cantwell, and also the bipartisan group of Senators who weighed on on this earlier in the winter.

Reporters have asked me where I think this thing is going and when it will be decided. The truth is, while I'm heartened by this support, I don't know what the Conferees are going to do.

That said, I do know what's right and what's the soundest public policy -- I'm firmly convinced of that. The question is will the Conferees do the right thing or will they do a special favor for the Twin Bells, who already control the bulk of the country's wireless spectrum licenses?

Time will tell if the FCC will be able to continue to maintain a level playing field, or if the Twin Bell lobbyists will carry the day.

p.s. Please remember that this is my personal blog and does not necessarily reflect the views of my employer.

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.