September 2011

AT&T Losing T-Mobile Seen Spurring Exodus on Dropped Calls

The Justice Department’s effort to block the takeover of T-Mobile USA Inc. chokes off AT&T’s path to an expanded network and wrecks its plan to gain as much as $20 billion in airwaves to help handle surging call volume. If AT&T fails to gain T-Mobile’s network, some of its 98.6 million customers may defect to rivals to avoid dropped calls and get access to faster services for smartphones and tablets.

Besides paying a $3 billion breakup fee, AT&T would also have to transfer some of its spectrum to T-Mobile, further squeezing its network capacity and stalling plans for growth. If the T-Mobile deal falls through, the company may have to scale back its plans to deploy faster networking technology, Kevin Smithen, an analyst at Macquarie Securities. While AT&T still might seek to acquire spectrum from other companies, such as Comcast, Dish Network, Clearwireor LightSquared, any other deals are now going to be viewed with skepticism because they are likely to face similar regulatory scrutiny, Smithen said.

CWA Takes On Sprint In Wake Of Justice Effort To Block AT&T Merger

One day after AT&T vowed to fight a Justice Department lawsuit to block the firm's acquisition of T-Mobile USA, the Communications Workers of America appears to be following them into battle by taking aim at one of the deal's fiercest critics: Sprint.

The CWA launched a new website called "eyeonsprint" aimed at highlighting what the union says are Sprint's true reasons for opposing the AT&T-T-Mobile deal. The new CWA website aims to rebut claims made by Sprint and other critics who say the merger will lead to job losses, higher prices and less innovation. It also outlines why the union opposes a possible merger between Sprint and T-Mobile.

AT&T's T-Mobile merger lobbying campaign falls short

AT&T has long been known for its lobbying prowess in Washington — and it pulled out all the stops to try to convince regulators that its $39 billion acquisition of rival T-Mobile was a good idea. AT&T spent nearly $11.7 million on lobbying during the first half of 2011, up nearly $2 million over the same time period in 2010.

It has more than 10 contract firms on retainer -- including Clyburn Consulting, Crossroads Strategies, Polaris Government Relations and Peck, Madigan and Jones -- and dispatched more than 72 outside lobbyists and consultants to help convince the Federal Communications Commission and DOJ to bless the deal. It brought on public relations agencies that helped craft the message that the mega-deal will expand wireless broadband to underserved populations across the country and would, therefore, create new jobs. But the company’s master plan showed serious signs of unraveling , when the Justice Department went to court to block AT&T’s bid. The FCC said it also has serious concerns about the deal. AT&T has an impressive track record on merger proceedings. Over the past decade, it has cleared high-profile deals, including one with SBC Communications, despite the initial reservations of regulators. But this time, AT&T’s confidence in the deal may have hurt its case. In fact, AT&T’s confidence bordered on arrogance, according to staffers who were in meetings with A&T’s lobbyists over the past five months. One staffer said AT&T was “almost dismissive” of competition concerns that had been raised about the deal. While it’s a setback for AT&T, DOJ’s move is a victory for the consumer advocates and public interest groups that are often far outgunned giant corporations like AT&T.

Public Knowledge Tells FCC It Should Act Now To Block AT&T Takeover of T-Mobile

Public Knowledge followed up the decision by the Department of Justice to file a court blocking AT&T’s takeover of T-Mobile by asking the Federal Communications Commission (FCC) to use its authority under the Communications Act to reject the deal immediately.

PK said in a filing with the Commission that the FCC is required to turn down the deal under provision of the law that prohibits the agency from approving deals that reduce competition for any international phone service (Sec. 314 of the Act). PK noted that the Justice Department sued to block the deal because of the potential for increased concentration of mobile services markets. Those markets have an international component, meaning the absolute prohibition comes into play, Public Knowledge said. Carriage of international traffic, international roaming, and reciprocal carriage agreements all are part of the international component that makes it compulsory that the deal be rejected, PK said.

Gov Rick Perry reiterates support for AT&T/T-Mobile merger

Rick Perry's presidential campaign reiterated the Texas governor's support for AT&T's acquisition of T-Mobile, one day after the Justice Department sued to block the deal.

"AT&T is a highly-regarded Texas-based company, creating thousands of good American jobs and providing critical communications services worldwide," Mark Miner, a spokesman for Perry. "Governor Perry believes the combination of the two telecom companies will be good for consumers, good for technology innovation and good for America job creation." Gov Perry (R-TX) wrote a letter to the Federal Communications Commission in May urging the agency to approve the deal. He said the merger would be a boon for the Texas economy and would improve broadband access in rural areas.

How AT&T conquered the 20th century

As the reconstituted AT&T makes its bid to buy T-Mobile, another interesting question presents itself. Why did the United States of America, supposedly the land of free market competition, accept the near total dominance of AT&T over telephone service for about 60 years? Historians have been debating this question for almost as long.

They often disagree on the answers. But if you accept their observations and arguments as mostly compatible pieces of a larger story, what stands out is a corporation that, at crucial moments, did just about everything right. In the early 20th century, the Bell system got there before its competitors. It learned how to fight or game the emergent regulatory system better than its rivals. AT&T publicly framed its purposes better than its critics. It used advertising not just to promote itself, but to sanctify its mission. And the corporation mastered the art of backing away from its darker ambitions at strategic public moments. Sometimes Bell was just lucky. But almost as often, the quality of service that the emergent monopoly created approximated its message -- that AT&T was about creating telephone access for everybody.

Android vendors unfazed by Google-Motorola deal

Smartphone vendors using Google's Android platform are unfazed by the Web giant's acquisition of Motorola Mobility, seeing it as a move to protect the software from legal attacks and not a competitive threat in the marketplace. Android vendors Sony Ericsson, HTC and Acer said they are not changing their product plans regarding Android due to the deal.

EU says Motorola deal will not impact Google probe

Google's planned purchase of Motorola Mobility will not influence an ongoing antitrust probe into the Internet search engine, the EU's antitrust chief said.

"(The antitrust investigation) is not simple, it is a complex issue," EU Competition Commissioner Joaquin Almunia said at the Alpbach Forum Economic Conference. Asked if the Motorola Mobility deal would affect the antitrust probe, Almunia said: "No, no ... we deal with mergers in a completely separate way than the antitrust cases that we have. Nothing to do (with each other)." "This is the same company but two different cases, two different procedures, two different analyses, two different teams analyzing but no link."

The New Political (Smartphone) Platforms

As a host of industries converge (consumer electronics, mobile computing, software, media), Platforms have become the political currency of the technology world.

They are the gateway to apps, devices, services, and all kinds of "value." These politics are deadly serious, with billions in market cap at stake. The drama plays out most clearly not in the public commons, but in the corporate boardroom. Platform strategy has become the new way technology companies set their agenda. You can mark the rise and fall of executives and divisions by how they play the New Politics of Platforms. Enormous power comes from naming a new Platform within these environments.

Google wins antitrust victory in Ohio case

An Ohio judge dismissed antitrust claims in a case against Google, handing the company a victory as it faces a separate federal investigation into its search results.

Google is under investigation by the Federal Trade Commission over whether it uses its strength in online searches to thwart competitors, and the Ohio case leveled similar allegations against the Internet search company. MyTriggers DOT com, an Ohio-based shopping comparison search Website, accused Google of giving preferential treatment in its search results to Google's own services. It also accused Google of making unfair agreements with other sites to exert control over search advertising. Franklin County Court of Common Pleas Judge John Bessey agreed that the federal Communications Decency Act did not prohibit Ohio state law antitrust claims against Google. However, Judge Bessey also ruled that myTriggers had only identified harm to itself. The law requires it show harm to competition generally, Bessey wrote, and myTriggers.com had not identified other competitors harmed by Google's alleged conduct.

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