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Senators Grill Mobile CEOs on AT&T/T-Mobile Merger

WASHINGTON May 12, 2011- The Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights assembled leading mobile CEOs Wednesday to explore the proposed merger between AT&T and T-Mobile.

“The proposed merger between AT&T and T-Mobile will bring together two of the four remaining national cell phone carriers to create the nation’s largest cell phone network, with an estimated 43 percent market share,” said Sen Herb Kohl (D-WI), Chairman of the Subcommittee, setting the tone for the hearing. “Should this deal be approved, AT&T and Verizon will control close to 80 percent of the national cell phone market.”

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WASHINGTON May 12, 2011- The Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights assembled leading mobile CEOs Wednesday to explore the proposed merger between AT&T and T-Mobile.

“The proposed merger between AT&T and T-Mobile will bring together two of the four remaining national cell phone carriers to create the nation’s largest cell phone network, with an estimated 43 percent market share,” said Sen Herb Kohl (D-WI), Chairman of the Subcommittee, setting the tone for the hearing. “Should this deal be approved, AT&T and Verizon will control close to 80 percent of the national cell phone market.”

Kohl highlighted that the wireless industry is increasingly become concentrated among only four national providers, T-Mobile, AT&T, Verizon and Sprint. Kohl fears that the merger will allow AT&T to have a stranglehold on the already scarce spectrum market.

Sen. Patrick Leahy (D-VT) along with Kohl asked AT&T to guarantee that if the merger was approved the company would meet its promise of expanding mobile broadband to 97 percent of Americans.

“I want assurances that these requirements will be met,” Leahy said. “AT&T represented to me that within two years, this acquisition will result in 250,000 more Vermonters having access to its 4G service than would otherwise be serviced by either company on its own – but I am naturally skeptical.”

Leahy was also curious as to why AT&T needed T-Mobile to expand its spectrum holdings since AT&T is one of the nation’s largest spectrum holders. During her testimony Gigi Sohn, Co-Founder of Public Knowledge, said that AT&T does not use one third of the spectrum the company owns in the top 25 markets.

Randall Stephenson, CEO of AT&T, said that the company needs the spectrum owned by T-Mobile to expand its coverage into rural America and further expand 4G Long Term Evolution coverage.

Stephenson also responded to Sohn’s comment by saying that AT&T will exhaust its current spectrum holdings over the next two years in those large markets. Additionally, the firm needs to maintain older networks while it transitions its users.

With the newly acquired spectrum, AT&T claims it will be able to expand its 4G coverage to 97 percent of the population, which will cover 50 million more people than the firm would be able to cover using its current spectrum holdings.

T-Mobile USA’s CEO Philipp Humm said that if it does not merge with AT&T, T-Mobile customers will not be able to gain access to 4G Long Term Evolution. T-Mobile does not possess the necessary spectrum to develop a LTE network and its parent company, Deutsch Telekom, does not have the funding to purchase additional spectrum.

Humm also assuaged the Senators’ concerns about the potential rise in prices  for consumers with the decrease in competition.

“Due to the complimentary nature of the T-Mobile and AT&T networks, when the firms merge the costs to operate the networks will decrease, creating price savings for consumers,” Humm said.

Kohl pressed Stephenson on the price issue, asking if current T-Mobile customers would be able to keep their lower price plans. Stephenson said that AT&T would allow for the maintenance of current prices for T-Mobile customers and that prices could potentially drop for all of its customers due to the gained efficiencies.

Daniel Hesse, CEO of Sprint Nextel, refuted the claim that prices would drop saying that the newly formed duopoly would not have a viable competitor to drive prices down. Currently both Sprint and T-Mobile are able to drive down prices by offering competitive nationwide plans.

Hesse also believes that this new duopoly will limit handset availability and decrease overall innovation.

“Competition drives innovation, and innovation is vital to maintaining the prosperity and leadership of this country,” Hesse said. “Because wireless communication has become a fundamental gateway to so many other related industries, it is imperative we advance competitive, market-driven policies that maximize this engine of innovation and economic growth. Handset manufacturers will be less likely to partner with anyone other than the duopolists, because access to their nearly 80 percent of the market’s customer base will be sufficient.”

Cellular South CEO, Victor Meena, echoed Heese’s fears that the new duopoly would lock out smaller regional carriers from gaining access to new smartphones. Regional carriers already struggle to gain access to these handsets.

“AT&T already uses their market power to enter into exclusive contracts preventing others from getting access,” Meena said. “By acquiring T-Mobile, [AT&T] will only become more powerful,”

Sen. Al Franken (D-MN) pressed Stephenson on the issue of handset exclusivity, asking if the firm would stop entering into these agreements. Stephenson said that these agreements provide handset makers with production guarantees that allow for large production runs that decrease overall price.

 

Rahul Gaitonde has been writing for BroadbandBreakfast.com since the fall of 2009, and in May of 2010 he became Deputy Editor. He was a fellow at George Mason University’s Long Term Governance Project, a researcher at the International Center for Applied Studies in Information Technology and worked at the National Telecommunications and Information Administration. He holds a Masters of Public Policy from George Mason University, where his research focused on the economic and social benefits of broadband expansion. He has written extensively about Universal Service Fund reform, the Broadband Technology Opportunities Program and the Broadband Data Improvement Act

Congress

House Democrats Fight Against Anti-Crypto Measures in Senate-Passed Infrastructure Bill

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Rep. Anna Eshoo, D-Calif.

August 20, 2021 – Pro-crypto House Democrats pushed back against the Senate Infrastructure Investment and Jobs Act’s inclusion of crypto regulatory language, seeking to make it less broad.

The additions of cryptocurrency taxes aim to generate revenue to pay for part of the infrastructure spending. Its authors intended to reduce fraud in reports to the IRS.

Democratic California Reps. Ro Khanna, Eric Swalwell, and Anna Eshoo joined cryptocurrency enthusiasts Rep. Bill Foster, D-Illinois, and Rep. Darren Soto, D-Fla., in urging to amend the infrastructure bill in the House.

In a letter released on August 12, Eshoo advocated to Pelosi that the House should “amend the problematic broker definition,” describing the existing language as “imposing unworkable regulations.”

But there is some feeling that amendments to the bill in the House may not be necessary. According to a Treasury Department official, the agency plans to clarify its definition of a “broker” to be more specific.

Any amendments to the House would force the infrastructure measure back to the Senate.

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Digital Inclusion

Senators Reintroduce Bipartisan Digital Equity Act

Sen. Murray re-introduces bi-partisan that would provide grants to states pushing for digital equity.

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Patty Murray, D-Washington

June 14, 2021– Three Senators have introduced legislation that would provide grants to states that create digital equity plans.

The proposed legislation, reintroduced on Thursday by Patty Murray, D-Washington, Rob Portman, R-Ohio, and Angus King, I-Maine, would set-aside $60 million to establish a State Digital Equity Capacity Grant within the Department of Commerce that would “promote the achievement of digital equity, support digital inclusion activities, and build capacity for efforts by States relating to the adoption of broadband by residents of those States.”

The funds from the Digital Equity Act in the Senate would be made available to all states, foundations, corporations, institutions, or agencies. The bill was first introduced by Murray in 2019.

Each state will receive a different grant amount depending on a formula that includes population and access to broadband across the state, to be spent within 5 years of receipt.

In addition to funding for states, the bill creates a  $125-million Digital Equity Competitive Grant Program. This program is also for state agencies and institutions but is more specifically geared toward those that are responsible for “adult education and literacy activities.”

Infrastructure portion

A final pillar of the bill is to create more infrastructure and resources for future development of policies that will continue to promote a bridging of the digital divide.

During a press conference on the bill, Murray told the Broadband Breakfast that she believes the bill will be successful because it gives states and local communities the ability to decide what their needs are. “We cannot dictate that in D.C.,” she remarked.

When asked why the bill will create more permanent solutions, she stated that it, “Provides for the diversity of needs that are going to continue to be out there.”

The senators co-sponsoring the bill said they are confident it will make its way into any infrastructure legislation passed by Congress.

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Infrastructure

Senate Committee Hears High Symmetrical Internet Speeds, Up-To-Date Technologies For Future Of Rural America

NTCA’s Shirley Bloomfield on driving improvements for rural broadband.

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Shirley Bloomfield

May 19, 2021– The head of the NTCA — Rural Broadband Association told a Senate Finance Committee that there are a number of improvements that can be made to broadband services and infrastructure for rural Americans, including higher symmetrical internet speeds, up-to-date network technologies, and better coordination of government funding to avoid overbuilding.

Shirley Bloomfield provided six different types of actions at Tuesday’s hearing that the government should take to improve broadband coverage in rural markets.

Bloomfield’s first suggestion was to build networks to last. She argued that building networks that provide insufficient speeds or utilize technology that is already outdated will not be sufficient to address the broadband needs of the future generation. During her testimony, Bloomfield specifically voiced support for 100 Mbps symmetrical service.

“We have a once in a generation opportunity—on the investment side—to do this right—to aim higher and to do better,” she said.

Her second suggestion was to take steps to limit overbuilding. To do this, she suggested that state and local governments coordinate with existing programs that provide mapping and funding for broadband projects. She clarified during her testimony that those without broadband service need to be prioritized before those with insufficient broadband service. She argued that the best way to do this would be ensuring that there is coordination with federal and state regulatory bodies with access to mapping data.

Bloomfield’s third suggestion was that network maintenance must be prioritized, and that modern networks will only stay modern and efficient if they are kept working and up to date.

Bloomfield also recommended clearer standards for broadband providers and that un(der)served rural communities should not be treated as “test labs” for new technologies. She stated that technologies should not be deployed until they have been sufficiently tested and established as viable strategies to serve communities in need of broadband. This includes not just the current needs of the communities in question, but also the projected needs of future generations.

Her sixth recommendation was to encourage consumers to look for local ISPs to provide broadband service. She noted that these smaller, local ISPs have cultivated relationships with the communities they serve, and those who work for the ISP often live among those they serve. She stated that it is this intimate connection that has allowed them to navigate the unique issues that these rural communities face.

Finally, Bloomfield encouraged the Committee to push for lower barriers to entry for broadband expansion projects, stating that bureaucracy and costs associated with many projects are simply too high. She also stated that a concerted effort must be made to sure-up supply chain issues that are currently applying significant pressure to ISPs and hampering expansion.

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