January 2012

[Commentary] Metadata -- data about data. I'd love for every tweet that's sent out to be categorized in some way by the tweeter. Tweets need metadata in the same way that books need a title. Is this tweet about an interesting new blog post by the sender of the tweet? Or about an interesting blog post by someone other than the sender of the tweet? A tweet about a useful free resource for educators? A new explanatory screencast about open-source software? A tweet about an inspiring video on YouTube? A tweet that'll make me chuckle? Sure, it takes a bit of extra effort for people to add metadata to their tweets, but the result is well worth it. More people would receive more of the information they're interested in – and less of the information they're not interested in. In a knowledge economy, that's a big deal, for time is more valuable than money. When more people receive more signal and less noise, knowledge is created, more becomes possible – and thoughts dance beneath the diamond sky with one hand waving free.

AT&T posted a large quarterly loss as it took a $4 billion charge for its failed T-Mobile USA takeover bid, and the phone giant continued to lag behind rival Verizon Wireless in the race to add new subscribers.

AT&T added 717,000 customers with long-term contracts in the fourth quarter, a 79% jump from a year earlier, on the strength of 7.6 million iPhone activations and 9.4 million smartphone sales overall. But AT&T is adding fewer new customers than rival Verizon Wireless, which added 1.2 million contract subscribers in the same period. Most of AT&T's iPhone and smartphone sales are going to existing subscribers. Excluding one-time items—notably the cost of handing over $3 billion in cash and $1 billion in wireless airwaves to T-Mobile parent Deutsche Telekom AG after the merger deal crumbled—AT&T posted a profit of 42 cents a share, down from 55 cents a year earlier. The carrier also contributed $1 billion to its pension plan. Like Verizon, AT&T's wireless profit margins suffered due to high outlays for subsidizing the iPhone and other handsets upfront in exchange for two-year customer commitments. The carrier reported its wireless service margin, not including some expenses, fell to 28.7%, from 37.6%. The fourth-quarter margin was 23.7% at Verizon Wireless. AT&T lifted average revenue per contract customer by seven cents to $63.76. That could rise further after AT&T lifted the price of data plans this month for new customers by $5, which it said was necessary to reflect higher average data usage. AT&T's traditional wireline business, which includes landline telephones and its U-verse cable and Internet service, continued to contract as more users opt for mobile phone service. Revenue for the business fell to $14.9 billion from $15.1 billion in the year-earlier period. AT&T brought in 208,000 new U-verse television customers compared with the third quarter.

Chief Executive Randall Stephenson lashed out at the Federal Communications Commission, faulting the agency for standing in the way of industry growth by failing to organize an auction for spectrum licenses and for opposing the T-Mobile deal. "This FCC made it abundantly clear that they'll not allow significant M&A to help bridge and free up spectrum," Stephenson said. "The FCC is intent on picking winners and losers rather than letting these markets work."

Harold Feld, legal director for Public Knowledge, said, “It is unfortunate that AT&T Chairman Randall Stephenson still believes that buying out the wireless industry is the only way to improve his company’s spectrum efficiency. His comment in this morning’s earnings call that the FCC has made it clear the agency won’t allow acquisitions as a means of increasing spectrum holdings is inappropriate for two reasons. The failed acquisition of T-Mobile would have had far wider implications than simply a spectrum acquisition. It is unfortunate that AT&T thinks that the only way it can increase its spectrum holdings is to purchase a competitor. Using its current holdings more efficiently would also go a long way to relieving the company’s purported spectrum shortage. In addition, the Commission did allow AT&T to purchase spectrum from Qualcomm.”

[Commentary] The government scored a huge victory for consumers when it defeated AT&T’s acquisition of T-Mobile, preserving a wireless landscape with four nationwide competitors. Now that the dust has settled, though, there’s a lingering question in my mind: Was the fight worth it? Would we have been better off if the AT&T-Mo saga never happened, or are we better off that AT&T tried and failed? Here are three reasons why the merger’s failure shaped the U.S. wireless market for the better.

1. We know what to watch for: Regulators, lawmakers and a large part of the public now realize that preserving what remaining competition is left in the U.S. wireless market is vital. Just as AT&T can’t buy T-Mobile, Verizon can’t buy Sprint, and either would face stiff opposition if it tried to pick up a smaller regional operator like MetroPCS or Leap Wireless. And AT&T and Verizon now know better than to try.
2. Regulators have grown fangs: After a decade of nearly unfettered consolidation in the wireless industry, regulators took a huge stand against the most egregious anticompetitive deal of them all, showing AT&T absolutely no deference. What’s more, those regulators don’t appear to be returning to hibernation. John Hane, an antitrust lawyer with Pillsbury Winthrop Shaw Pittman, said that we may be witnessing the rebirth of much more aggressive Department of Justice, one that is willing to examine every telecom deal through a trust-busting lens.
3. Dormant spectrum is finally being put to use: Though AT&T has claimed that the U.S. is facing a spectrum crisis, the deplorable fact remains that it and many other operators have been hoarding frequencies for years. If operators can no longer buy networks from their competitors, they will have to build them.

Brent Bozell, president of the Media Research Center, is ramping up its campaign against the "left-wing, so-called news media" to the tune of a planned $5 million dollar "Tell The Truth 2012" campaign that Bozell says will include paid TV, radio and Internet advertising.

The group launched a similar effort in 2010, but he told reporters the spending on this campaign will be more than double. Bozell is tired of the "elite media" protecting the president by attacking Republicans. Bozell said he was not likely to be buying any TV ads on CNN, or MSNBC, or the broadcast networks -- feeding the hand that he says bites Republicans, as it were -- but said that was because he was confident they would never run ads criticizing the news media.