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The FCC's Public Interest Test Problem - My Daily Caller Op-ed (Part 2 in a series)

Please read my latest Daily Caller Op-ed: "The FCC's Public Interest Test Problem" here.

Part 1 of my Obsolete Communications Law series: "Obsolete communications law stifles innovation, hurts consumers" -- is here.

EU's regulated mobile prices much higher than US competitive mobile prices

The EU's latest round of mobile price regulation provides a golden opportunity to show how market competition produces much better results for consumers than government price regulation. Ironically, the European Parliament voted this week to lower mobile roaming charges by mid-2014 to levels that will still be much higher than America's competitive wireless market prices are today.

Per New York Times reports, the EU mandated price for making a roaming mobile voice call will be reset from 35 cents a minute today to 19 cents a minute by mid-2014, and the price for receiving a roaming mobile voice call will be reset from 11 cents a minute today to 5 cents by mid-2014. Putting this in perspective, Recon Analytics' research shows that Americans pay 4.9 cents a minute vs. 16.7 cents a minute for Europeans -- ~70% less; and because of these dramatically lower American wireless prices, Americans consumers use more than twice as much wireless as Europeans, 875 minutes of use per month vs. 418 minutes for Europeans. Simply, the EU's ~50% mandated price reductions will still have European consumers paying much more for mobile usage even if one incorrectly were to assume that competition won't further lower the market price for American consumers like it has every year.

Obsolete Communications Law Stifles Innovation & Hurts Consumers -- My Daily Caller Op-ed

My Daily Caller op-ed: "Obsolete Communications Law Stifles Innovation, Hurts Consumers," puts a spotlight on how America's century-old communications law and regulatory framework is obsolete and strangles America's innovation potential.

Objecting to Obsolete Obligations

The Washington Post's lead story today, "Landline Rules Frustrate Telecoms," puts a needed spotlight on obsolete communications law that: falsely assumes the telecom marketplace is still a monopoly with no consumer choice; and still mandates telecom companies subsidize below-cost, copper-line telephone service to households as if it were still a government-sanctioned monopoly.

A bit of history is warranted here. This century-old political arrangement -- the 1913 Kingsbury Commitment between the Federal Government and AT&T -- effectively established a government-sanctioned monopoly in return for universal telephone service to all Americans and utility rate of return regulation. In 1996, Congress reformed Federal communications policy by ending monopoly and promoting competition. Today, despite copper telephone networks losing half of their customer base to cable, wireless, VoIP, broadband and other Internet competitors (and losing most of their most profitable landline customers) many legacy telecom legal requirements, like subsidized below-cost telephone service, live on despite being obsolete. This means that in today's fiercely competitive voice service marketplace, mandating that only one provider must provide subsidized below-cost, copper-line service to potentially millions of households, is a classic un-funded mandate and a hidden, unfair, investment-distorting business tax on only one competitor.

FreePress' Latest Net Neutrality Folly -- Pushing for Shareholder Votes

FreePress' latest net neutrality folly and political agitation is pushing the SEC to make shareholders from AT&T, Verizon and Sprint vote on inappropriate, ill-advised, and unwarranted proposed shareholder resolutions in favor of wireless net neutrality in the weeks ahead.

Let me count the ways this is a waste of time and abuse of process.

First, it inappropriately and destructively attempts to politicize non-political entities, by trying to force a public political position from non-political corporate entities, whose contractual and fiduciary responsibility to shareholders is to economically/financially grow the value and profitability of the corporation.

Second, the appropriate place to have political votes is in legitimate political processes, elections or representative votes or decisions by elected officials at the appropriate local, state, and Federal level, which enjoy the constitutional, political, and relevant authority and legitimacy to decide political issues in a meaningful, substantive and productive way.

Third, the operative authority here for shareholders, the companies' shareholder agreements, corporate charter, and bylaws, are legally grounded on a contractual agreement between the company and shareholder to protect and grow the shareholders investment in the company, not to promote extra-political positions that actually could endanger the underlying purpose of the shareholders agreements.

The FCC's Visible Hand Picked Job Losers in Blocking AT&T-T-Mobile

T-Mobile's announcement of 1,900 job layoffs is an unfortunate real world consequence of the FCC overreaching its authority, breaking precedent, and disregarding FCC procedure in releasing an unapproved and biased staff report, in order to politically block the AT&T-T-Mobile merger just a few months ago.

A pillar of the FCC's political justification for blocking the AT&T-T-Mobile merger was that FCC staff did not believe the companies' analysis of the effect on jobs with and without approval of the merger. The FCC rejected AT&T's commitment to bring 5,000 call center jobs back to the U.S., if the merger was approved. In rejecting the merger and its job creating commitments and analysis, the FCC helped cause these particular 1,900 call center jobs to be lost at T-Mobile. That's because the FCC staff, (who admit to not having no expertise in this area) claim to know better than an employer of over a quarter of a million people how new jobs are created in today's marketplace.

Mobile Payments Ignite New Competitive Free-for-All

Mobile technology advances are dramatically increasing the intensity of competition broadly online and offline. The technological convenience of using a smart phone, tablet etc. rather than a card or cash to pay for goods and services, wherever one may be, is igniting a competitive free-for-all.

  • That's because the technological shift to devices rather than cards creates a huge potential competitive opportunity for most everyone in the competitive ecosystem to potentially disintermediate other industries -- i.e. Wrest control of the customer relationship, customers' private information, interests and metadata, and also the bundling of marketing coupons and promotions, in markets with transactions in the trillions of dollars annually.

Activists and regulators who fear a potential new communications "opoly" lurking around every corner -- in need of preemptive government intervention to protect consumers from the convenience, savings and benefits of a highly-competitive marketplace -- need to take a breath, enjoy, and get out of the way of this amazing technological convergence and innovation over mobile payments.

Debunking the Carping over Broadband Usage-Pricing

Activist carping about the commercial Internet being commercial is revving up again, this time with the carping focused on framing new broadband usage-pricing innovations by Time Warner Cable and AT&T, as somehow a violation of the "open web."

To cut to the quick and translate what is really going on politically here, this activist carping is the latest attempt to revive and re-fight the manufactured net neutrality debate between:

Why the Verizon-Cable Agreement is in the Public Interest

 

The evidence below shows the Verizon-Cable agreement is clearly in the public interest, if the FCC fairly reviews the agreement and all of the relevant facts, in the full context of the highly competitive wireless ecosystem.

Top Reasons Why Verizon-Cable Agreement is in the Public Interest

Increases competition: The agreement increases competition because it enables:

 

Spectrum: To Auction or Not to Auction?

The FCC's recent call for unbounded spectrum auction authority spotlights an important debate over whether some of this scarce and extremely valuable wireless spectrum should be auctioned or not.

  • Ironically the FCC is asking Congress to give it spectrum auction authority to not auction spectrum.
  • In other words, the FCC is asking to be unilaterally empowered to decide not to auction some spectrum so it can deem it "unlicensed spectrum," like that used for WiFi and garage door openers.

There are huge fiscal problems with the FCC's position, given our nation's severe fiscal situation: a trillion dollar Federal budget deficit and a ballooning multi-trillion dollar public debt.

First, the real world effect of the FCC's gambit here is to try and get revenue-raising legislation to not raise many billions of dollars.

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Q&A One Pager Debunking Net Neutrality Myths