July 2012

Wireless carriers resist allowing campaign donations by text

The major wireless companies are expressing concern about plans to allow political campaigns to collect donations through text messages. In a letter to the Federal Election Commission (FEC), wireless industry trade group CTIA worried that the decision to allow text donations will impose new legal responsibilities on carriers.

The FEC approved a plan, supported by both President Obama's and Mitt Romney's campaigns, last month to legalize text donations. The donations will be limited to a maximum of $50 per user, per month and would not be open to corporations, foreign nationals or people younger than 18 years old. But the wireless carriers asked the FEC to clarify that it is the responsibility of the campaigns — and not the carriers — to ensure that the donations comply with all legal requirements. The carriers, which include Verizon, AT&T, Sprint and T-Mobile, argued that requiring them to verify the eligibility of a donor is "simply neither practicable nor workable." The companies also asked the FEC to confirm that normal texting charges would still apply to political donations and that campaigns would not be exempt from anti-spamming rules.

Consumer Federation of America Brands SpectrumCo Deal End of 96 Act's Competitive Promise

In advance of the July 10 comment deadline on Verizon's purchase of spectrum from cable operators, the Consumer Federation of America has told the Federal Communications Commission that allowing the deal would mark the end of "the competitive promise" of the 1996 Telecommunications Act.

"The last two competitors standing, cable companies and telecommunications service providers, with any hope of building a serious competitive challenge by offering a bundle of services anchored in a product in which it has a clear advantage, have decided to collaborate, rather than compete," the group argues. It points to the associated cross-marketing agreements between Verizon and the cable companies, calling them "dressed-up" noncompetes that will diminish competition in the markets where the companies cross-promote their respective services. "Creating a joint venture wireless-cable bundle excuses cable from entering wireless and creates an advantage for both cable and Verizon that is difficult if not impossible to match for firms that are not party to the joint venture," CFA says.

FCC Won't Delay Restarting Clock on Verizon–SpectrumCo

The Federal Communications Commission has denied a request by Public Knowledge and the Rural Telecommunications Group that the FCC not restart its shot clock on the Verizon-SpectrumCo deal on July 10 as planned.

The groups had petitioned the commission to move the deadline for comments on the impact of the Verizon/T-Mobile spectrum swap on the SpectrumCo deal from July 10 to July 24, saying it needed more time and citing the July 4 holiday as one reason. The FCC had stopped its informal 180-day shot clock on vetting the SpectrumCo deal until July 10 so that commenters could weigh in on Verizon/T-Mobile. "We are not persuaded, under the circumstances outlined in the Motion, that Public Knowledge and RTG have shown good cause that granting the Motion for an extension of time would serve the public interest," the FCC's Wireless Telecommunications Bureau said in denying the request. "The Commission has an obligation to review the transactions proposed in the Verizon Wireless/SpectrumCo/Cox Applications as expeditiously as possible, consistent with the public interest," the commission said.

FCC to Demo Political File Database July 17

The Federal Communications Commission announced July 6 it would demonstrate its online political file database for the public on July 17.

According to the FCC, the demo will be at 10 a.m. at the FCC meeting room. It will also be streamed. "The demonstration will inform broadcasters and others of the design and content of the online file, how stations will upload information to the file, how file sharing tools like Dropbox and Box can be used for uploading, and other ways in which the FCC is working to facilitate access to its public databases," the FCC said.

FCC Fines Cable Operator $30,000 for Illegal Retransmission

The Federal Communications Commission has fined Bailey Cable TV $30,000 for two separate retransmission violations during an impasse in Baton Rouge during which Bailey continued to carry the station signals after its contract ran out and the stations had asked it to take down the signals.

Bailey did not dispute that it had retransmitted the signals of WGMB-TV (Knight Broadcasting) and WVLA-TV (Communications Corp. of America) without the station owners' permission. But Bailey argued that it should be one violation, not two. According to the FCC, after Bailey could not come to new terms on retransmission consent agreements that expired Dec. 31, 2011, it kept carrying the signals without a contract because it felt the broadcasters were using the FCC to try to engineer a dramatic increase in rates and the FCC should instead require the stations to negotiate a fair rate.

CTIA Calls FM Chip Emergency Communications Claims 'Silly'

Wireless operators say broadcasters' suggestion that last week's devastating East Coast storms provided evidence of the need to activate FM chips in cellphones was "just silly."

The National Association of Broadcasters had argued that its members had filled an emergency communications void. "While unseemly, it is unfortunately typical of NAB to shamelessly attempt to use natural disasters and the misfortune of others to advance their public policy agenda," said CTIA VP of government affairs Jot Carpenter.

How software-defined radio could revolutionize wireless

A company called Per Vices hopes to do for wireless communication what Apple did for computing. It is selling software-defined radio gear called the Phi that, like the Apple I, is likely to be of little interest to the average consumer. But the device, and others like it, has the potential to transform the wireless industry. This time, the revolution will depend on hackers enabled to manipulate radio signals in software.

What’s behind the price signaling between Verizon and AT&T?

[Commentary] The two largest mobile service providers, AT&T Wireless and Verizon Wireless, are engaging in some serious price signaling. And you don’t have to take my word for it, because the two leaders are not only signaling, they are explicitly saying that they’re signaling. And guess what, this is all perfectly legal.

As a marketing guy, I am in awe of this stroke of genius. Price signaling has always existed between the number one and number two players in any market. Agreeing to not engage in a price war is truly a win-win for the market leaders. Since outright price fixing is illegal, market leaders resorted to signaling to tell the other company their intentions or send a threat about their cost advantages. But traditionally, it was more like flirting — ambiguous enough that the underlying intentions could be denied. Why are these two not shy about admitting to flirting now? The simple answer is the iPhone.

Why is this signaling legal? There is absolutely nothing wrong in these pricing plans or in their signaling. A marketer is fully within their rights to not offer a certain product version and let other players know about it. I also do not believe lawmakers and regulators should try to dictate otherwise. One, it does not eliminate competition. There are other service providers who can choose to provide cheaper voice plans. An extreme argument is, smartphones are not a necessity, customers don’t need to buy one at all. Two, while it may look like this eliminates choices for customers and hence invite regulatory scrutiny, an arbitrage opportunity does exist. Consumers can purchase a regular phone for $40 a month with limited minutes and use a Nexus 7 tablet with $40 for data connection. The trade-off is having to carry two devices for a savings of $480 over two years. But how many will actually take this option? Did you check the line at last iPhone release? As a customer, you may not like it, but viewed as a product strategy move, this is business at its best.

[Srinivasan is a management professional who specializes in product strategy and strategic marketing]

No meter? No problem. AT&T is still happy to charge you

AT&T implemented a broadband cap a little over a year ago, yet AT&T isn’t letting all of its customers track their broadband usage — which would be pretty useful information if you’re trying to stay under the cap.

For an undetermined number of subscribers AT&T hasn’t yet provided access to its online data meter, but that hasn’t stopped Ma Bell from implying that customers need to beware of what they download. It sounds like AT&T will send customers letters or emails if they go above the 250 GB cap for high speed users and 150 for DSL users, but they won’t be charged those first two times. However if that customer continues to exceed the cap even without a meter AT&T is going to charge them.

Facebook, Twitter and the economics of attention

Some wonder whether Facebook will ever be able to make advertising work at all, because of the nature of the network and the purposes for which most people use it — and whether alternative networks like Twitter aren’t better equipped to do so.

One of the more recent discussions of that idea comes from startup advisor and entrepreneur Alistair Croll, who argues in a recent blog post that despite its enormous size and reach — something that should theoretically make it perfectly suited for advertising — the nature of Facebook’s network actually makes it less effective at doing this than Twitter. In a nutshell, Croll says, we are more likely to be open to commercial messages appearing in our Twitter stream because the network is asymmetric (meaning you don’t have to approve every follower, and users can send you messages by simply using your Twitter name). Facebook, by contrast, is based on a more symmetric model — one that is designed to allow users to control their social network at a very granular level, by approving each and every “friend,” and therefore implicitly accepting that messages from them will appear in their timeline. The network has added subscriptions and other features to try and duplicate the asymmetric model that Twitter uses, but those don’t seem to have really taken off for most users, many of whom complain about subscriber spam. And that kind of structure, Croll argues, makes it a particularly ineffective medium for advertising. (July 5)

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