June 2011

Status Update: The AT&T, T-Mobile Mega-Merger

A lot has happened since news broke in March that AT&T planned to acquire T-Mobile USA. Here's a rundown of what led up to the merger, who's for and against the deal, and where it goes from here. This week marks the first major deadline in the Federal Communications Commission's review of AT&T's mega-merger with T-Mobile USA, which will make it the largest wireless operator in the country and further consolidate an already condensed industry. Anyone who wants the FCC to block AT&T's merger with T-Mobile had until the end of May 31 to file their opposition – the FCC calls it a "petition to deny" – with the agency. So far, more than 15,000 comments have poured into the FCC about the merger. The volume of comments surged by the thousands last week as people flocked to a website set up by Free Press that made it easier for consumers to voice their opposition to the deal, with more than 10,000 comments filed through the site in a single day last week. Since AT&T announced its $39 billion bid to buy T-Mobile on March 20, the companies have withstood a storm of criticism over the deal, sat through interminable hearings in the House and Senate and explained again and again why regulators should allow the deal to pass. And this is just the beginning.

AT&T to spend $8 Billion on LTE expansion after T-Mobile deal

AT&T CEO Randall Stephenson said that if the company's proposed $39 billion purchase of T-Mobile USA is approved by regulators, AT&T will spend $8 billion over three years to expand LTE coverage to 97 percent of Americans. In a wide-ranging interview at the Sanford C. Bernstein & Co. Strategic Decisions Conference, Stephenson talked about the acquisition, AT&T's efforts to woo technology companies to support the deal, the company's LTE deployment and the future of the industry.

Stephenson said AT&T thinks it will be at least six years before the FCC can get a significant amount of spectrum into the market, which is why AT&T felt compelled to make the T-Mobile deal. He said AT&T's move to LTE is more about spectral efficiency and lower latency than simply boosting transmission speeds. He said AT&T is deploying 2,000 cell sites this year in its efforts to upgrade to the faster HSPA+ network technology. And though AT&T's LTE deployment trails significantly behind that of Verizon Wireless, Stephenson said AT&T is not worried about lagging Verizon. He said the two companies will be compete as fiercely over data speeds and network claims on LTE as they have on 3G. "That's going to be the fight," he said. "It's going to be the boxing match."

Alito owned stock, voted in case with Disney's ABC

Supreme Court Justice Samuel Alito took part in a case over curse words on television involving ABC and other networks even though he owned stock in ABC's parent, Walt Disney, at the time.

Justice Alito said that he owned around $2,000 in Disney stock when the court heard the case FCC v. Fox Television Stations in late 2008. ABC and the other networks also were parties to the case. Justice Alito said his participation was an oversight. He said aides who routinely check for conflicts in high court cases missed the Disney connection when they looked at the Fox case, even though ABC's brief clearly disclosed Disney's ownership. In any event, Justice Alito voted with the majority, against ABC's interests. The case came out 5-4, suggesting that Alito's participation directly affected the outcome in which the court threw out an appeals court ruling favorable to the networks.

Wi-Fi to Overtake Wired Network Traffic by 2015

Wi-Fi devices will for the first time use more bandwidth than wired devices in 2015, according to Cisco’s new Visual Networking Index (VNI) Global IP Traffic Forecast.

Cisco predicts Wi-Fi devices will consume 37.2 Exabytes of data worldwide per month in 2015, which is slightly more than the 37.0 Exabytes of wired IP traffic the company is forecasting. And Wi-Fi will take up 46.2 percent of all IP traffic in 2015, up from 36 percent of all IP traffic in 2010. The share of wired IP traffic, on the other hand, will sink from 63 percent in 2010 to 46.1 percent in 2015. Mobile networks will place third, with 6.3 Exabytes per month, but cell phone network operators will have to adapt faster than anyone else to growing data consumption: Mobile IP traffic will grow 26 times over the period, compared to three-fold growth for wired and five-fold growth for Wi-Fi traffic. Mobile will make up 8 percent of global IP traffic in 2015. Last year, mobile users only consumed 237 Petabytes per month, which accounted for 1 percent of the global IP traffic.

All or Nothing at All

[Commentary] In looking at the response of the critics to the new PROTECT IP bill I couldn't help but recall the title of the old Altman/Lawrence song "". These critics want a perfect solution to piracy or no solution at all. They all do lip service to the idea that piracy is a problem but, and there is ALWAYS a "but", they find some hypothetical situation that might happen as a result of the legislation and say the results would be too dire for them to support the bill in its current form. As a creator there is nothing more disheartening than seeing your work being stolen while advertizements are sold on top of the access to illegal copies of your work. The time has come to protect the voices that are being silenced by these rogues websites. The Protect IP Bill isn't a perfect fix-all for piracy, but it is a start. Sometimes instead of singing "" we need to sing 'something is better than nothing'! [Carnes is President of the Songwriters Guild of America]

Public Knowledge Still Urging Broadband Reclassification

Meeting with Federal Communications Commission staff, Public Knowledge restated that the failure to classify broadband as a Title II service raises significant difficulties for expanding the universal service fund to include creation of the Connect America Fund (CAF) and disbursement of funds high cost funds to entities other than eligible telecommunications carriers (ETCs).

However, the authority asserted by the FCC under Section 706 of the Telecommunications Act and under its forbearance authority, if sufficient for the modifications proposed in a rulemaking, would also be sufficient to support the proposals made by Public Knowledge and the Benton Foundation. In particular, the authority asserted by the FCC would permit both creation of a small fund for the purchase of equipment for self-provisioning entities in unserved communities pursuant to the law's mandate to ensure deployment where broadband is not being deployed in a timely manner.
PK proposed two solutions. First, and on the most solid legal footing, the FCC could classify interconnected VoIP as a Title II service. Alternatively, the FCC could interpret the creation of CAF as occurring through a combination of Section 706 and Section 254.

Cable Giants Seek to Limit Internet Streaming, Slow Netflix

Just as more and more American consumers are joining the streaming-video party, and using more bandwidth because of that, their Internet service providers – many of which, by no coincidence, also run large pay TV operations -- are getting set to cap the fun.

With companies like Netflix and Hulu threatening their subscription business, companies including AT&T, Comcast and Charter no longer want to aid the competition by offering consumers all-you-can-eat broadband. The message: Think twice before you cut that cord, America.

Public finds less value in entertainment industry, is unhappy about paying

With so many entertainment options available now, consumers are finding less value from entertainment products and an overwhelming majority are displeased with the industry's move to charge for services provided over the Internet, according to a survey by public relations company Edelman.

In its 2011 survey, Los Angeles- and London-based Edelman found that the value consumers are getting from the entertainment industry has fallen by 68 percent in all areas. Only 17 percent of all respondents feel that entertainment sources today provide "very good" or "excellent" value. Only social networking sites, which the majority of respondents believe are a form of entertainment, have retained steady levels of value at 37 percent in the US.

It's time for journalists to stand up against Fox News

[Commentary] Rolling Stone's profile of Fox News chief Roger Ailes this week provides the latest item in a long line of evidence that Fox News is a morally bankrupt sham of a news organization - a propaganda outlet that engages in intentional lying to advance its partisan cause. If you haven't read the piece yet, do. It's vital media criticism.

I've met plenty of journalists who bristle when I criticize Fox News. They've told me that, as defenders of free speech and the First Amendment, journalists should not be in the business of trying to silence other voices in the media marketplace. But as defenders of truth, journalists also have an obligation to call out voices that intentionally spread lies to the public. Fox News' owners and executives have a right to speak. But they don't have a right to set the public agenda. It's past time for responsible journalists to stand up against Fox News.

Lawmakers mull new cyber powers for FERC

House lawmakers are considering legislation that would give the Federal Energy Regulatory Commission (FERC) emergency powers to shore up the electric grid's cyber defenses. It's authority that utility companies say FERC doesn't need, and may not be qualified to exercise. The Grid Reliability and Infrastructure Defense (GRID) Act passed the full House last year, but stalled in the Senate. Now, its backers in the House are considering reintroducing the measure, which attempts to boost cyber protections in two areas: The nation's interstate bulk power supply system, and parts of the electric grid that supply power to Defense Department facilities that are critical to national security. Under the bill, FERC would have the authority, at the President's direction, to "with or without notice, hearing, or report, issue such orders for emergency measures as are necessary in its judgment to protect the reliability of the bulk-power system or of defense critical electric infrastructure against such threat." Potential cyber attacks to civilian critical infrastructure are something DoD worries a lot about, said Paul Stockton, the Pentagon's assistant secretary for homeland defense. He said the military depends on the private grid for 99 percent of its electric needs.

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