AT&T

FreePress with its "all complaints all the time" approach to advocacy has been caught once again "crying wolf" when there was no real problem or threat.

A new FCC study that shows ISPs are effectively delivering on the broadband speeds they advertise, exposes FreePress for crying wolf -- yet again.

• FreePress has to acknowledge Verizon's FIOs far exceeds advertised speeds, Comcast and Charter exceed advertised speeds, and other ISPs are more than close enough to advertised speeds to show that there is not a problem here for the FCC to be concerned about.

FreePress also continues to cry wolf about its spurious tethering" complaint against Verizon because users are prevented from unauthorized tethering of additional devices trying to bypass users' terms of service agreement.

In the end, the U.S. Government is highly-likely to approve the AT&T/T-Mobile merger, despite the significant opposition, because of three over-riding realities: 1) market/financial realities, 2)DOJ legal/precedent realities, and 3) FCC public-interest realities.

I.    Market Reality:

T-Mobile's leadership and owners have decided that they are unable and unwilling to invest what is necessary in order to compete going forward in the American 4G wireless market, and given that fundamental premise, the AT&T/T-Mobile merger is the optimal market outcome for T-Mobile's customers and for competition.

• T-Mobile shopped itself for a good while in order to fully test its market options and ultimately chose to merge with AT&T as the best outcome for all concerned from its perspective.

So the key baseline fact grounding the DOJ/FCC's decision processes here, is that T-Mobile's leaders/funders are effectively exiting this business one way or another long term via merger, sale or benign neglect.

Netflix continues to throw stones at the common economic practice of usage-based pricing, to which broadband carriers are naturally migrating, all while Netflix stands inside a glass house filled with mis-managed usage pricing practices. 

Netflix as Stone Thrower:

In a concerted campaign for net neutrality regulation that would ban broadband usage caps or pricing, Netflix has generated a:

• Supportive Washington Post blog;
• New York Times editorial,
• Wall Street Journal op-ed,
• Shareholder letter, and
• Faux net neutrality complaint with Level III-Netflix.

Netflix as Glass House:

In another blow to its competition policy credibility and objectivity, the FCC's 308 page, 15th Wireless Competition Report, amazingly reached no conclusion about whether the wireless market was effectively competitive, despite overwhelming evidence of effective competition throughout the report and a dearth of evidence in the report of any discernible anti-competitive issues that would suggest the wireless market was somehow not effectively competitive.

• The stark incongruity between the overwhelming evidence in the report, and the absence of what should have been an easy report conclusion that the wireless market is effectively competitive, is certainly not "data-driven policy making at work.
• It appears to be politics at work to support and provide political cover for the FCC's maverick policy desire to promote de-competition policy and more expansive FCC economic regulation and common carrier-like duties a la net neutrality and data roaming -- in the face of strong opposition from Congress and the Courts that the FCC is over-reaching its statutory authority.

If only the FCC absorbed the significance of the data compiled in their own report, the FCC would conclude that the wireless market was effectively competitive.

If reports are true that the FCC is planning on claiming in its upcoming wireless competition report that the FCC cannot conclude that the U.S. wireless market is effectively competitive, then the FCC is neither "data-driven" as it claims, nor in touch with market reality.

• Don't miss the latest CTIA assessment of U.S. wireless competition and innovation HERE.
• The facts and evidence are overwhelmingly indicative of vibrant competition.

If the FCC is a wireless competition denier in the upcoming wireless competition report, despite the overwhelming factual evidence to the contrary, the FCC seriously risks its going-forward credibility with Congress, the Courts, industry and the public.

The Rural Cellular Association’s opposition to the AT&T/T-Mobile acquisition puts a spotlight on the un-sustainability of the analog rural cellular model that is on the wrong side of broadband change.

• The clear but unspoken subtext of the RCA’s opposition is their recognition that their current subsidized model of rural cellular providers is fundamentally ill-equipped for the competitive broadband era.
• Simply, the RCA is quixotically trying to drag the anchor of an inefficiently and unsustainably subsidized analog business model into the efficient and competitive broadband Internet future – a recipe for losing the future.

Importantly, most of the RCA’s problems exist completely separate from this transaction.

As a regular reader of Steve Pearlstein's Washington Post's business column, I was dismayed at the consistent pro-regulation frame of Sunday's piece on the AT&T-T-Mobile acquisition: "The Revenge of the Baby Bells."

The hallmark of longstanding bipartisan competition policy has been that if market players have the freedom to succeed or fail at differentiating, innovating and investing to meet consumers' rapidly evolving needs, market forces can maximize consumer welfare much better than FCC regulators can.

• Current fierce communications sector competition on multiple levels, vibrant innovation and massive private sector investment have proven Congress' wisdom in instituting competition policy to replace economic regulation as the best framework to maximize consumer welfare in communications.
• Without the 1996 Telecom Act replacing economic regulation with competition policy, the Internet would be a fraction of the phenomenon it it today.

Thus it is dismaying that Mr. Pearlstein crafted a false choice in his column: "...stick with the competitive, lightly-regulated model and... block a merger... or it could acknowledge... the "telephone" market is a natural oligopoly... and... requires much stronger government regulation."

FreePress' radical anti-business, anti-capitalism politics lead it to make up or contort facts and analogies in order to promote its world view of a publicly-owned and regulated Internet commons.

In FreePress' latest opposition to the AT&T-T-Mobile merger, FreePress continues to nonsensically analogize this merger with the Ma Bell monopoly.

The FCC's Open Internet Order is even more likely to be overturned in court than before because the FCC's extraordinary delay in publishing its December net neutrality regulations has oddly moved the FCC's April Data Roaming Order to the front of the line of cases challenging the FCC's overall legal authority to regulate broadband.

• (The April 7 Data Roaming Order was published in the Federal Register 29 days after the decision; the December 21 Open Internet Order may not be published until late summer or fall, 7-9 months after the decision, per Politico's Morning Tech.)

Consequently both cases are now more likely to be heard in the FCC-unfriendly D.C. Circuit Court of Appeals.

Like pro-regulation forces did everything they could to undermine competition policy to justify FCC net neutrality regulation last year, those same FreePress-led pro-regulation forces are focused in 2011 on trying to characterize the AT&T/T-Mobile combination as a threat to competition -- so that they can impose new regulations on AT&T that they can then try and force on the rest of the industry.

The problem is that the FreePress-led pro-regulation forces are trying to convince people of the preposterous claim that the AT&T/T-Mobile merger will reconstitute the Ma Bell Monopoly when the obvious facts are that AT&T is no longer dominant 27 years after the Bell-break-up.

The Senate Judiciary Antitrust Subcommittee hearing on the AT&T-T-Mobile merger is entitled: "The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?"

Just like it was preposterous last year that the U.S. was falling behind on broadband because of insufficient competition, it is preposterous that the AT&T/T-Mobile merger will reconstitute the the Ma Bell monopoly.