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Analysis: For AT&T, It’s All About The Spectrum

in FCC/Mobile Broadband/Spectrum/Wireless by

WASHINGTON March 29, 2011 – With the acquisition of T-Mobile, AT&T may be not only solving a long standing question about where it would find the spectrum to deploy its planned 4G network, but also make a leap in its public image.

Currently, AT&T uses a band of spectrum not supported by any other carrier in the world, meaning handsets must be specially made for the carrier. Both T-Mobile and AT&T use the same base technology, but the two carriers run their 3G networks on different bands of spectrum. The acquisition of T-Mobile would greatly increase the amount of spectrum and infrastructure that AT&T would possess, bringing service to a greater number of Americans.

For example, T-Mobile is currently far ahead of AT&T on building HSPA+, an intermediate 4G technology that fits right between the carriers’ existing 3G networks and Long Term Evolution (LTE) technology. Immediately, AT&T  would be able to improve it’s current 3G speed and coverage by redeploying the infrastructure to speed up and widen its 3G coverage.

Long term, AT&T has focused on building its next-generation LTE infrastructure, but has fallen behind Verizon in actually deploying the technology. If the T-Mobile acquisition goes forward, AT&T would be able to re allocate the spectrum it acquires from T-Mobile and expand its LTE service more rapidly,  closing the gap that Verizon is currently widening.

AT&T confirmed this plan in a call with investors following the announcement of the potential acquisition. The company’s roadmap calls for eventually moving T-Mobile’s subscribers off the 1700 megahertz  3G spectrum they currently occupy.  AT&T will then combine this spectrum with other availible spectrum it already owns to make LTE service available to an estimated 95 percent of Americans. The projected roadmap calls for this network to be fully in place by 2013, making the deal imperative to AT&T’s competitiveness, as spectrum is a large part of what has been missing from the carrier’s past plans.

Spectrum, therefore, is the keystone to AT&T’s future. The company’s plan to acquire T-Mobile utilizes the current assets T-Mobile possesses that will improve and expand AT&T’s network and give a definite shape shape to it’s future plans. AT&T suffered blows to its public image in the last year from numerous directions: losing iPhone exclusivity, the unpopular introduction of capped data plans, and repeated issues with call reliability. The acquisition of T-Mobile would allow AT&T to cultivate an image of a faster, newer network with a larger amount of available spectrum, possibly placing it ahead of its closest competitor Verizon.

Although he declined to comment specifically on the deal, FCC chairman, Julius Genachowski, echoed his long held sentiment about the importance of spectrum while at the CTIA Wireless trade show in Orlando last week: “Spectrum is the oxygen that allows all of these mobile innovations to breathe. Whether or not most Americans know the physics of spectrum, they know what it feels like to have a dropped call or a slow connection or cranky Wi-Fi.”

And it looks like that is what this deal is about: AT&T’s need for more spectrum both technologically and in the public perception.

 

AT&T Announces $39B Deal To Acquire T-Mobile

in FCC/House of Representatives/Media ownership/Mobile Broadband/Spectrum/Wireless by

WASHINGTON, March 21, 2011 – Nationwide wireless carrier, AT&T announced Sunday that it had finalized an agreement to acquire competitor T-Mobile from Deutsche Telekom for $39 billion in cash and stock.

The deal between the nation’s second- and fourth-largest carriers would likely create the largest nationwide wireless carrier, topping current leader, Verizon.

“This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation’s future,” said Randall Stephenson, AT&T Chairman and CEO through a statement Sunday. “It will improve network quality, and it will bring advanced LTE capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more.”

AT&T touted the projected benefits of the acquisition in its press release, from helping achieve President Obama’s high-speed wireless deployment goals to helping alleviate an impending spectrum crunch. Monday morning, however, is certain to bring industry and government questions regarding the transaction’s effect on competition in one of the nation’s most highly concentrated industries.

Rep. Anna Eshoo (D-CA), ranking member of the House Subcommittee on Communications and Technology, released a statement Sunday evening, portending competition questions that are certain to be asked in the coming weeks and months.

“Competition is essential to promoting a vibrant wireless market, where consumers have a choice in the innovative services and devices available to them,” said Eshoo. “As the FCC and DOJ begin their regulatory and antitrust review, I urge them to carefully examine the proposed transaction.”

Industry watchdog, Public Knowledge, also released a statement shortly after the announcement, condemning the consolidation from four major carriers in the market to three “unthinkable.”

“The fact that AT&T and T-Mobile would even think of such a combination shows how desperately the U.S. needs both strong network neutrality rules and a competition policy that requires dominant broadband providers to make their networks available to competitors,” said Gigi Sohn, president and co-founder of Public Knowledge.

Before the acquisition is finalized, the Federal Communications Commission and the Department of Justice will conduct a regulatory and antitrust review of the transaction. The FCC’s standard of review for whether to give the transaction the go-ahead will depend on whether it determines it is in the best interest of the public. The Commission has taken up to a year to pass on similar mergers.

Wireless World Betokens Further Challenges and Opportunities for Broadband

in Wireless by

WASHINGTON, October 19, 2009 – In a year that has been described as transformational and phenomenal for the telecommunications industry, any attempts at regulating the Internet may turn back the good that the industry has enjoyed, and may slow down efforts at innovation, said panelists speaking at a Progress and Freedom Foundation event.

Many on the panel touted wireless mobile internet as the means to get efficient and competitive services to consumers, and they identified the wireless sector as a key component of increased broadband deployment and penetration.

Ruth Milkman, chief of Wireless Telecommunications Bureau at the Federal Communications Commission, commented that smartphones and iPhones and laptops will be in greater use as more wireless connectivity becomes available to consumers.

“Unleashing broadband for use in mobile devices will call for urgent and efficient use of broadband,” said Milkman. “We need to find ways of streamlining processing of applications, and internet should remain open.”

Brett Glass of Lariat.net said that the FCC does not yet know what to regulate, and Net neutrality regulations is a radical solution to a non-existent problem. Innovation enables competition, and that could be blocked if neutrality rules are imposed. Rather, the with internet provider is likely to pay more to get services to the consumers.

“[Lack of regulation] will in turn make the products more desirable to consumers, giving them choices,” said Thomas Hazlett, a professor of economics at George Mason University. Regulation is a complex process, and the government should be careful as they consider stepping into it, he added, asking the government to use wireless frequencies to facilitate greater competition among users of the spectrum.

People want to connect to the Internet, find information or get news from anywhere, at any time – and that is why spectrum is important. Unfortunately, the government is yet to release large swaths of spectrum for use by consumers.

Regulation will also muzzle emerging media such as blogs, said Kathleen Ham, the vice president of federal regulatory affairs at T-Mobile U.S.A.

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