@jbtaylor on tech

Mark your calendars. The Senate Antitrust Subcommittee is holding a hearing on Verizon's proposed transactions with Comcast, Bright House, Time Warner Cable and Cox on Wednesday, Mar. 21 at 2:00 ET.

The hearing will be webcast live from the Judiciary Committee's web page or you can attend in person in Room 226 of the Dirksen Senate Office Building in Washington, D.C. The title of the hearing is telling:

"The Verizon/Cable Deals: Harmless Collaboration or a Threat to Competition and Consumers?"

It looks like a good panel of witnesses. Testifying before the subcommittee will be:

Randal S. Milch
Executive Vice President & General Counsel
Verizon Communications Inc.

David L. Cohen
Executive Vice President
Comcast Corporation

Charles F. (Rick) Rule
Managing Partner, Washington, DC Office
Cadwalader, Wickersham & Taft LLP

Steven K. Berry
President & CEO
Rural Cellular Association

Joel Kelsey
Policy Advisor
Free Press

Timothy Wu
Isidor & Seville Sulzbacher Professor of Law
Columbia University

The FCC is currently reviewing a massive spectrum transaction where Verizon Wireless will acquire spectrum held by cable companies Comcast, Cox, Time Warner Cable and Bright House. In exchange, Verizon will begin to market cable services in Verizon stores, online and telesales channels. At the same time, the cable companies will start to market Verizon Wireless services.

The details of these joint marketing agreements are central to the proposed transaction, but the attorneys from Verizon and the cable companies are refusing to allow the FCC to see the details of the agreements.

They have decided that the FCC has no jurisdiction over the matter and in regulatory filings last week, basically told the FCC to butt out.

This morning, Sprint joined T-Mobile, DIRECTTV, Free Press, Public Knowledge, Media Access Project, the Computer & Computing Industry Association, the New America Foundation, RCA-The Competitive Carriers Association and the Rural Telecommunications Group in asking the FCC to stop the informal 180-day clock on its review of the proposed transaction until the FCC can review the full and unredacted details of the proposed transaction.

Put simply, what Verizon and the cable companies are essentially telling the FCC is, "Trust us."

And what the other companies and public interest groups are asking the FCC to tell Verizon and its cable partners is just as simple: "Trust, but verify."

And honestly, no one at Verizon, Comcast, Bright House, Cox or Time Warner Cable should have anything to fear if their proposed transaction is truly as pro-consumer as they purport it to be.

But by hiding the details which are central in determining whether or not the transaction is in the public interest, it certainly raises serious questions about the nature of the transaction and the motivation behind it. Otherwise, why is there a need to hide the details from the independent agency in charge of regulating the cable and wireless industries?

p.s. While other companies have formally asked the FCC to deny the transaction, Sprint has not done so. Like other posts on this blog, the opinions expressed are entirely mine, and not necessarily those of my employer.

On the eve of a bipartisan compromise to extend a middle class tax cut and continue unemployment benefits for our friends and neighbors out of work, Politico described AT&T's lobbyists as, "furious" that Republican and Democratic leaders in Congress didn't adopt everything the company wanted in the legislation.

Remember, with AT&T, it's always "my way or the highway" when it comes to public policy.

Missing from what DSL Reports' Karl Bode called a "pout festival" was like-minded Twin Bell Verizon. I'm guessing that top Verizon lobbyist, former Iowa GOP Congressman Tom Tauke and his team realized what Rep. Anna Eshoo (D-Calif.) said about the compromise over the bill's spectrum provisions was true:

“Did we get every single thing that we wanted? No. No one ever has and I don’t think they ever will, including my children.”

Perhaps AT&T's top lobbyist Jim Cicconi believes that too, but in a statement to media yesterday, he pointed out that there is "an opportunity for a court challenge" if the FCC doesn't give his company all the spectrum it wants.

Lovely.

Before the FCC even opens a docket about the future wireless spectrum auction, AT&T is already threatening a lawsuit if it doesn't get its way.

That sounds like an empty threat to me. The last time AT&T was in court over an effort to obtain more spectrum was when the U.S. Department of Justice and a bi-partisan group of state Attorneys General sued the company over its proposed takeover of T-Mobile.

We all know what happened then.

Rather than fight the government in court, AT&T chose to leave the courtroom and abandon the transaction, rather than stand by its scorched earth rhetoric.

So yesterday's threat from AT&T sounds like more empty saber rattling to me.

Time will tell.

p.s. Once again, please remember that this is my personal blog and may not necessarily reflect the views of my employer.

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.

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.