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August 29, 2011

AT&T/T-Mobile: FCC Restarts the Shot Clock

By Peter Bernstein, Senior Editor

For those of you who may have been concerned, the Federal Communications Commission (FCC), on August 26 after roughly a month delay, re-started the “shot clock” on the AT&T/T-Mobile (News - Alert) deal. Just as historical reference, Friday was day 83 of what is supposed to be a 180 day process. Why is this news? Let’s take a look.



A little background

Back in July, as a result of public and Congressional pressure, the FCC stopped the clock and asked AT&T to provide additional economic and engineering analyses of the potential benefits of the merger. The goal was for more details about the expected efficiencies.

TheHill.com reported on Friday that a letter on this from FCC Wireless Bureau chief Rick Kaplan says:

 “We have now received AT&T's answers to our specific questions as well as AT&T's confirmation that it believes our record is complete with respect to the models…Our understanding is that, unless specifically prompted by a request from the Commission or the Department of Justice, AT&T will not be submitting any further revisions to the models."

In other words, case closed on getting more input. The posting then goes on to quote the pleasure expressed by representatives of AT&T and T-Mobile that the process is moving and they are confident the additional information they provided will further demonstrate that the proposed merger is in the public interest and should be approved.

As pointed out in a BusinessWeek.com posting by Stacey Higginbotham, the filing was an attempt to quiet an uproar created in the past two weeks when, in letters that were supposed to remain confidential and were subsequently released in redacted form, AT&T laid out its economic rationale for the deal. In these letters, they stated that the $39 billion merger was beneficial because it would enable them to avoid proving fourth generation (4G) LTE (News - Alert) service nationally at a cost of $3.8 billion. We shall leave you to do the math, and ask the same questions critics raised.

The BusinessWeek.com posting went on to say that:

“The FCC already had all the information—it’s merely the rest of us who weren’t privy to AT&T’s machinations around building out an LTE network to rural areas. And if the FCC only this week realized that was an issue, then we have bigger problems.”

While admittedly a broadside against the industry, the FCC and the National Broadband MAP by the National Telecommunications and Information Administration (NTIA) for the “lack of transparency,” the post does speak to a vexing problem. If we are supposedly one of the global leaders in broadband network deployment, wired and wireless, where is the proof? How come even a cursory review shows how underserved much of the rural U.S. is when it comes to broadband? Wasn’t all of this supposed to become clear with NTIA’s multi-million dollar taxpayer funded attempt at creating a National Broadband MAP?

The answer to the latter is key. It should be yes. However, the industry has been successful in thwarting the efforts to make enough granular information available to make the effort useful. The industry has stated that more detailed disclosure would enable competitors to cherry pick the market. Indeed, for those of you who hoped to see broadband availability by address, speeds and provider there is no reason to click. I am so sorry.  However, there is hope. NTIA wants people to submit their own information, which means the map could get better.

This is one of those OMG moments. Actually letting customers and Congress know the real story about coverage and affordability seems such a quaint notion in an era that increasingly is characterized by a “don’t confuse me with the facts” mentality.  This is why, in fact, back in June, Congresswoman Anna G. Eshoo (D-Palo Alto, CA (News - Alert)) introduced the “Next Generation Wireless Disclosure Act.”

In addition, it seems the FCC’s priorities are askew if it is worrying more about “cramming” than it is about the future economic vitality engendered by universal broadband at affordable prices.

The silver lining, if there is one, is that at least a decision will be made on this merger and hence put to rest the cheap shots being taken in Congress about how slowly the FCC works. Now, at least, we can all see how it works and the quality of its decisions instead of worrying about how fast.

We obviously will keep you informed as the clock winds down. Can’t wait to see what buzzer beaters are thrown up on this one.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.


Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya (News - Alert), Alcatel-Lucent, Telcordia, HP, Siemens, Nortel, France Telecom, and others, and having served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.

Edited by Rich Steeves
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