Notes from Telecommunication Mergers and the Public Good Talk

Today the Humphrey Institute hosted a discussion on the AT&T T-Mobile mergers. Here is the description from the UMN web site

The Center for Science, Technology, and Public Policy (CSTPP) will host a lecture featuring two very different views about possible mergers in telecommunications giants AT&T and T-Mobile from 2 to 3:30 p.m. on Monday, October 3, in the Wilkins Room (Room 215) at the Humphrey School. Former Congressman Rick Boucher, now a partner in the Washington, D.C. office of Sidley Austin, and amalia delony, grassroots director for the Center for Media Justice will discuss their differing views of the proposed merger and take questions from the audience. Steve Kelley, director of CSTPP, will moderate the discussion.

It was an interesting discussion in many ways because the two main speakers agreed on so many points so unlike many debates today it wasn’t like trying to bring black to white or white to black. There was careful consideration of the nuance, details and ramifications of the decisions being discussed. I’ll include my pretty full notes below but I thought I’d include a quick list of pros and cons. (These are as stated by the speakers – not my personal pros and cons.)

For the Merger:

  • It’s a good way to get to 98% broadband coverage in the US in the next 5-6 years without government spending.
  • T-Mobile will probably be sold anyways the parent company is no longer interested in the American market
  • 4G is broadband; it is faster than most rural communities experience now

Against the Merger

  • A merger will mean a loss of jobs. T-Mobile’s workforce is 48% minorities
  • AT&T is not known for quality customer service while T-Mobile is the most low-income-friendly with prices and service locations
  • 4G may be broadband, but access through a smartphone alone is not enough. You can’t fill out a college application on your smartphone. People need

Former Senator Rick Boucher –
Now heads up the Internet Innovation Alliance – they agree on nationwide universal broadband. It is achievable. (Universal however is 9% broadband deployment within 5 year period)

  1. Get the FCC to reform USF. The US has highest telephone rate. SO the USF has worked in terms of getting landlines to rural areas. It makes sense to modify USF to allow it to be expended for broadband as well as telephone. Right now the providers are small rural telcos – if they could use funds for broadband, they would.
  2. Get the Legislature to allow the FCC to confer incentive auctions. Smartphones have taken off hugely. We’ll need more spectrum to accommodate smartphones.
    1. The FCC would encourage spectrum owners (TV air owners) to give it up for a portion of auction proceeds. There are urban, independent stations that will take advantage of the opportunity.
    2. Enough stations have expressed interest to make it worth trying. It might happen this year. The Super Committee is looking into it.
  3. Support the merger between AT&T & T-Mobile. We have a goal of 98% broadband coverage. AT&T says within 6 years they will cover 97%. We think we can make up the rest from USF reform & financial support.

Why is the merger good for consumers?

T-Mobile will be bought by someone. Deutsche Telkom owns it and wants to get out of the American market. Few upgrades have been made.

Verizon 4G is as fast as my connection at home. It can be a stable and independent platform for access. We may see people give up cable & DSL to go wireless on 4G as people have given up their landlines. AT&T has said they will deploy 4G.

AT&T says it will honor T-Mobile customers contracts for the duration of the contract.

AT&T will remove one carrier from the national table – but it’s not anti-competitive in that 1 of the largest 20 cities, there will still be 5 or more wireless providers from which to choose. In the other 2 cities the merger requirements may mean that T-Mobile is broken down and sold to others.

The current major spectrum holder is Sprint. They control about 30 percent of all spectrum. Then Verizon and then AT&T. TO remain competitive, AT&T needs more spectrum.

amalia deloney

I don’t work for AT&T in any way, shape or form.

We agree on the importance of broadband. The Center for Media Justice is a think tank that represents marginalized communities. We work with grassroots communities of color.

The Media Action Grassroots Network is made up of community-based organizations. We want to build media policy that’s people centered and place-based. Our top concerns:

  • Internet Freedom (Net Neutrality)
  • Universal Service Fund
    • Involve din low cost programs
    • Safelink (mobile/tracphone)
  • AT&T T-Mobile
    • Created video on Mo Mergers Mo Problems
    • Minnesota is leading a voice against the merger

Broadband connectivity is essential for education, healthcare… For low-incomes folks, jobs is the top concern. You can only apply for jobs online. So that means the Rondo Library in St Paul opens up with a 3-hour wait for a computer.

Why don’t we like the merger?

  • We think the merger is a jobs killer.
    • T-Mobile has chosen to build out in marginalized areas. It is the cheapest option. So many people use it. Nationally 4% of T-Mobile’s workforce is a minority.
  • AT&T is notorious for bad customer service.
  • The merger will leave a duopoly in the industry – that will not be good for customer service for users.
  • Real competition doesn’t really exist right now. In many places there is only 1-2 providers.
  • Wireless access is essential – but you can’t fill out a college application on your smartphone. They need affordable prices, the need protective policies.
    • Families are getting broadband through their wireless devices. Wireless access is essential – but you can’t fill out a college application on your smartphone. They need affordable prices, the need protective policies

We want reliable, affordable service from a corporation with a connection to the community. We want to be innovators, not just consumers.

Boucher –

AT&T has not widely deployed 4G yet. The fifth generation iPhone is coming out soon. (Hopefully this week.) Verizon has done a pretty good job of 4G deployment.

AT&T has pledged to retain all of the call center positions from AT&T and T-Mobile. They will need those call center operators to handle the subscribers. This is one of the fastest growing industries in the US.

CWA & ALFCIO have both endorse the merger. The claim that up to 96,000 jobs will be created.

The FCC has a low definition of broadband. What do you call broadband?

Boucher – 3G isn’t real broadband; 4G is. And AT&T is looking at 20 Mbps.

deloney – it depends. Symmetrical upload/download is necessary.

Question: 20 Mbps in many rural areas would be a step up. Is there a difference in impact between a low-income users in rural vs urban area?

deloney – generally no. There’s a false division between communities that are underserved and unserved – but we would group them together. You face issues of being left behind. It’s not that people don’t understand that they need broadband.

People need reliability & affordability. Competition helps. Maintains a low cost providers helps too. Options are important for consumer rights.

Question: Customers are fluid and growing. Congress gave broadcasters spectrum with the ideas that they might give it back.

Boucher – 8 years ago Congress decided to prepare a path to transition from analog to digital. SO 700 MHz spectrum was opened up. The big change was getting home owners a digital TV set (or convertor box). We loaned the spectrum to the broadcaster so that they could broadcast on analog and digital. About 3 years ago analog broadcasting stopped. There were subsidies to buy convertors.

We got the spectrum back and that’s where the 4G is coming from.

Sprint in the largest spectrum holder and they don’t use much of it now.

Isn’t it possible to get to 98% broadband in 5-6 years without the merger?

Boucher – no. There will be a requirement in the law to make them cover 98% in that timeframe. AT&T won’t do it in the timeframe without the merger.

Verizon might be better poised, but they will build in the cities first.

deloney – There’s a question of how AT&T spends money – such as lobbying and a multi-billion dollar ads.

There are innovative solutions – ILSR in MN talks about community-based broadband networks. We can open up the discussion to talk about community-based solutions. Now is a good time to look at what models in which we should invest.

Boucher – I supported the bill that would have allowed easier connection to community-based networks. About half the states have prohibitions of some sort of network communications.

There ought to be an expanded definition to lifelink & linkup to include broadband options.

This entry was posted in Conferences, Digital Divide, FCC, MN, Policy, Rural by Ann Treacy. Bookmark the permalink.

About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (blandinonbroadband.org), hosts a radio show on MN music (mostlyminnesota.com), supports people experiencing homelessness in Minnesota (elimstrongtowershelters.org) and helps with social justice issues through Women’s March MN.

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