22. The Commission established these terms as preconditions to approval of the NBCU-Comcast merger in the hope that they would protect nascent Online Video Distributors like Netflix. See Thomson StreetEvents, “Comcast Corporation Conference Call to Discuss It's [sic] Joint Venture with General Electric Related to Regulatory Clearance of NBCU Transaction,” January 18, 2011, available at http://www.comcast.com/nbcutransaction/pdfs/CMCSATranscript-1.18.2011.pdf. In the Matter of Media Bureau Seeks Comment, 3.
23. “We call [this] the full freight door. … Under this door, an OVD that does not have a deal with anyone else can come to NBC Universal and ask for the full linear NBC Universal lineup that is typically made available to other multichannel video distributors. So this is not—you can't ask for one network. You can't cherry pick networks. You can't cherry pick programs. You have to go and ask for the whole linear lineup from NBC Universal. And the OVD in that case has to agree to pay the economic equivalent of what NBC Universal would receive for giving the same set of content to an MVPD. So that would include MVPD affiliate fees, retransmission consent fees. But it would also include revenue that we might lose because this content was being delivered in an online video format instead of in the multichannel video distributor format. For example, advertising revenues” (“Comcast Corporation Conference Call”).
24. David Faber, “Interview with John Malone,” CNBC, April 4, 2011, transcript at http://msnbcmedia.msn.com/i/CNBC/Sections/News_And_Analysis/_News/__EDIT%20Englewood%20Cliffs/john_malone_interview.pdf.
25. Karl Bode, “Earthlink Wants Wholesale Access as NBC/U Condition,” DSLReports.com, October 7, 2010, http://www.dslreports.com/shownews/Earthlink-Wants-Wholesale-Access-As-NBCU-Condition-110777. EarthLink supported its contention with studies by Professor Simon J. Wilkie that were filed with the FCC. See Simon J. Wilkie, “Consumer Sovereignty, Disintermediation, and the Economic Impact of the Proposed Comcast/NBCU Transaction” (June 21, 2010) (“Wilkie Report”), available at http://www.competitioneconomics.com/wp-content/uploads/2010/08/Report-of-Professor-Simon-J-Wilkie-on-Behalf-of-EarthLink-06-21-2010-MB-Docket-No-10-56-2.pdf; Simon J. Wilkie, “Economic Analysis of the Proposed Comcast-NBCU-GE Transaction” (August 19, 2010) (“Wilkie Reply Report”), available at http://www.competitioneconomics.com/wp-content/uploads/2010/08/Reply-Report-of-Professor-Simon-J.-Wilkie-on-Behalf-of-EarthLink-08-19-2010-MB-Docket-No.-10-56.pdf. “Next Generation Connectivity: A Review of Broadband Internet Transitions and Policy from Around the World, Final Report,” Yochai Benkler, Principal Investigator (Cambridge, Mass.: Berkman Center for Internet and Society at Harvard University, February 2010), 15, available at http://cyber.law.harvard.edu/sites/cyber.law.harvard.edu/files/Berkman_Center_Broadband_Final_Report_15Feb2010.pdf.
26. “The Communicators: David Cohen, Comcast Corp.,” YouTube video, 14:59–15:15, posted by “C-SPAN,” August 2, 2009, http://www.youtube.com/watch?v=sIozcgvdehs; Ron Chernow, Titan: The Life of John D. Rockefeller, Sr. (New York: Random House, 1998), 547.
27. The FCC report covers EarthLink's request for wholesale access in note 224 (“While we agree with EarthLink that stimulating development, innovation and investment in the OVD market, and in the broadband market as a whole, are critical public policy goals, we find that the open Internet and standalone broadband conditions that we are imposing on this transaction are sufficient to protect the broadband industry and the interests of consumers”): Memorandum Opinion and Order, “In the Matter of Applications of Comcast Corporation, General Electric Company and NBC Universal, Inc. For Consent to Assign Licenses and Transfer Control of Licensees,” FCC, January 18, 2011, 41.
28. TR Daily, “FCC Official: Managed Network Issues Likely to Be Decided Case-by-Case,” September 26, 2011, Telecommunications Reports, available via Westlaw (www.westlaw.com) at 2011 WLNR 19546357. (FCC officials participated in a Federal Communications Bar Association event on the condition that their remarks not be attributed to any individual.)
29. David Hyman, “Why Bandwidth Pricing Is Anti-Competitive,” Wall Street Journal, July 7, 2011.
30. “The Communicators: David Cohen, Comcast Corp.,” YouTube video, 5:37–6:15.
31. Sen. Al Franken, interview with the author, September 30, 2010.
32. “Per capita, fewer of us have broadband than in South Korea, Japan, or just about anywhere in Europe,” according to Nick Judd, “Gig.U Asks Universities and Telcos to Work Together for the Internet of the Future, Starting Today,” Tech President, September 15, 2011, http://techpresident.com/blog-entry/gigu-asks-universites-and-telcos-work-together-internet-future. “Other countries, such as Korea, Japan, and France, offer speeds 20 to 100 times faster in both directions, and for the price of the inferior copper-based DSL offered in the U.S. The American public is the big loser,” noted David Rosen, “The Comcast-NBC Merger & the Future of Internet Video,” Z Magazine, March 2010. And the Economist pointed out: “Having led the world in internet access, America has slipped over the past decade to 22nd (behind Latvia and the Czech Republic) with an average download speed of a mere 3.8 megabits per second (Mbps) compared with South Korea's average of 14.6Mbps. Worse, Americans pay through the nose for their high-speed access. According to the New America Foundation, a 100Mbps internet connection costs $16 a month in Sweden and $24 a month in South Korea. In Hong Kong, 160Mbps can be had for $65 a month. Thanks to the lack of competition, Americans have to stump up $145 a month for 50Mbps—less than a third the Japanese internet speed for over twice the price. By any measure, that is a terrible deal” (“The Difference Engine: Politics and the Web,” December 24, 2010). “Approximately 100 million Americans do not have broadband at home,” according to the National Broadband Plan Executive Summary, accessed March 1, 2012, http://www.broadband.gov/plan/executive-summary/.
Chapter 13. The AT&T–T-Mobile Deal
Epigraph. Ian Shapira, “James Cicconi, Head of AT&T Lobbying Effort, Confident in Approval of T-Mobile Deal,” Washington Post, March 23, 2011.
1. Tom Schoenberg, Sara Forden, and Jeff Bliss, “T-Mobile Antitrust Challenge Leaves AT&T with Little Recourse On Takeover,” Bloomberg, September 1, 2011, http://www.bloomberg.com/news/2011-08-31/u-s-files-antitrust-complaint-to-block-proposed-at-t-t-mobile-merger.html.
2. Craig Moffett, The Rationing Impulse … [For Straws] in the Wind (Washington, D.C.: Bernstein Research, June 10, 2011).
3. Eli Noam, “Let Them Eat Cellphones: Why Mobile Wireless Is No Solution for Broadband,” Journal of Information Policy 1 (2011): 470–85.
4. The cost of installing a wireless network is consistently less than that for a wired network. In some parts of the country, the wireless cost advantage exceeds $7,500 per customer. See Coleman Bazelon, “The Benefits of Wireless Broadband for Rural Deployments” (Cambridge, Mass: The Brattle Group, March 16, 2010), available at http://www.brattle.com/_documents/uploadlibrary/upload837.pdf.
5. Greg Besinger, “For Sprint, Free Pays Off,” Wall Street Journal, November 10, 2011; Craig Moffett, U.S. & European Telecommunications: Stuck in the Middle … Will T-Mobile USA Be the Next Sprint? (Washington, D.C.: Bernstein Research, February 5, 2009).
6. “During a recent Citibank investor's [sic] conference, John Stankey, AT&T's President, said that the service provider is confident it can pass 55–60 percent of the homes in their service region,” reported Sean Buckley, “AT&T Nears End of Its U-Verse Service Buildout,” Fierce Telecom, May 20, 2011, http://www.fiercetelecom.com/story/att-nears-end-its-u-verse-service-buildout/2011-05-20.
7. Karl Bode, “AT&T: The U-Verse Build Is Over,” DSLReports.com, February 9, 2012, http://www.dslreports.com/shownews/ATT-The-UVerse-Build-is-Over-118297.
8. Noam, “Let Them Eat Cellphones,” 481.
9. John Horrigan, “Wireless Internet Use” (Washington, D.C.: Pew Internet, July 2009); In the Matter of Lifeline and Link Up Reform and Modernization, Federal Communications Commission, WC Docket No. 11-42, April 21, 2011 (Comments of Media Action Grassroots Network).
10. Ka
i Jakobs, Information Technology Standards and Standardization: A Global Perspective (Hershey, Pa.: Idea Group, 2000), 206-08
11. Ibid., 214.
12. Enhanced Data Collection Could Help FCC Better Monitor Competition in the Wireless Industry (Washington, D.C.: Government Accountability Office, July 2010), 8.
13. Charles Edquist, The Internet and Mobile Telecommunications System of Innovation (Northampton, Mass.: Edward Elgar Publishing, 2003), 83–85.
14. Ibid., 73.
15. As part of the Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-66, § 6002, 107 Stat. 312, 387-392 (the “1993 Budget Act”), Congress added Section 309(j) to the Communications Act of 1934, as amended (the “Communications Act”), authorizing the Federal Communications Commission to award licenses for rights to use the radio spectrum through competitive bidding.
16. “Broadband Personal Communications Service (PCS),” Federal Communications Commission Encyclopedia, accessed March 3, 2012, http://www.fcc.gov/encyclopedia/broadband-personal-communications-service-pcs; Where Do We Go from Here? The FCC Auctions and the Future of Radio Spectrum Management (Washington, D.C.: Congressional Budget Office, April 1997), 12–17.
17. Guy Klemens, The Cellphone: The History and Technology of the Gadget That Changed the World (Jefferson, Ill.: McFarland, 2010), 134.
18. Ibid., 134–35.
19. Ibid., 135–36.
20. “Cingular Nabs AT&T Wireless for $41B,” CNN Money, February 17, 2004, http://money.cnn.com/2004/02/17/technology/cingular_att/?cnn=yes.
21. Saul Hansell, “Verizon and AT&T Win Big in Auction of Spectrum,” New York Times, March 21, 2008; “AT&T Talks Up LTE,” Daily Wireless, accessed March 3, 2012, http://www.dailywireless.org/2011/05/25/att-talks-up-lte/.
22. Sinead Carew and Diane Bartz, “Sprint Files to Block AT&T purchase of T-Mobile USA,” Reuters, May 31, 2011, available at http://www.reuters.com/article/2011/05/31/us-att-tomobile-sprint-idUSTRE74U5Y320110531.
23. Gigi Wang, AT&T/T-Mobile Merger: More Market Concentration, Less Choice, Higher Prices (Boston: Yankee Group, August 2011).
24. U.S. Department of Commerce, National Telecommunications and Information Administration, “Digital Nation: Expanding Internet Usage,” NTIA Research Preview, February 2011, available at http://www.ntia.doc.gov/files/ntia/publications/ntia_internet_use_report_february_2011.pdf.
25. Report and Order and Further Notice of Proposed Rulemaking, In the Matter of Connect America Fund, a National Broadband Plan for Our Future, Establishing Just and Reasonable Rates for Local Exchange Carriers, et al., Federal Communications Commission, WC Docket No. 10-90, GN Docket No. 09-51, WC Docket No. 07-135, et al., November 18, 2011, p. 4, n. 3.
26. Description of Transaction, Public Interest Showing, and Related Demonstrations, In the Matter of Applications of AT&T Inc. and Deutsche Telekom AG for Consent to Assign or Transfer Control of License and Authorizations, Federal Communications Commission, WT Docket No. 11-65, April 21, 2011.
27. Allen Tsai, “Obama to Double Available Wireless Spectrum,” Mobiledia, June 28, 2010, http://www.mobiledia.com/news/71990.html.
28. Federal Communications Commission, “National Broadband Plan,” (2010), chaps. 5–6, available at http://www.broadband.gov/plan/.
29. Ex Parte Submission of the United States Department of Justice, In the Matter of Economic Issues in Broadband Competition: A National Broadband Plan for Our Future, Federal Communications Commission, GN Docket No. 09-51, January 4, 2010.
30. Description of Transaction, Public Interest Showing, and Related Demonstrations, In the Matter of Applications of AT&T Inc.
31. Ben Protess and Michael J. De La Marced, “JPMorgan, the Lender Behind the T-Mobile Deal,” New York Times, March 21, 2011, available at http://dealbook.nytimes.com/2011/03/21/jpmorgan-the-lender-behind-the-t-mobile-deal/.
32. Description of Transaction, Public Interest Showing, and Related Demonstrations, In the Matter of Applications of AT&T Inc.
33. Why the AT&T-T-Mobile Deal Is Bad for America (Washington, D.C.: Free Press, March 21, 2011), available at http://www.freepress.net/files/ATT-TMobile.pdf.
34. “T-Mobile Coverage Map,” T-Mobile, accessed March 10, 2012, http://www.t-mobile.com/coverage/pcc.aspx; “AT&T Wireless Coverage Map,” AT&T, accessed March 10, 2012, http://www.wireless.att.com/coverageviewer/#?type=voice.
35. Description of Transaction, Public Interest Showing, and Related Demonstrations, In the Matter of Applications of AT&T Inc.
36. “[The] transaction would reduce competition and harm consumers” ( Matthew Spankey, “Sprint Releases Official Statement in Opposition of AT&T/T-Mobile Merger,” Sprint Nextel, news release, March 28, 2011 http://www.sprintusers.com/sprint-releases-official-statement-in-opposition-of-att-t-mobile-merger/).
37. “As recently as last October, Mr. Hesse said the wireless industry is ‘hyper competitive.’ The month prior, his CFO talked about how ‘tough’ retail competition is in the wireless market, citing at least six major competitors. In February of last year, Mr. Hesse said, ‘M&A is absolutely a way to get the growth in the industry, if a particular transaction makes sense for anybody.’ He went on to say, ‘I think consolidation will be healthy for the industry, some consolidation. It is, needless to say, very competitive’” (Jim Cicconi, “AT&T Response to Hesse Remarks,” AT&T Public Policy (blog), April 15, 2011, http://attpublicpolicy.com/government-policy/att-response-to-hesse-remarks/.
38. Shayndi Rice and Thomas Catan, “AT&T's Critics On Deal Growing,” Wall Street Journal, May 31, 2011.
39. Communications Workers of America, “T-Mobile USA and AT&T Merger Means Faster and More Widespread Broadband,” news release, March 20, 2011, available at http://www.cwa-union.org/news/entry/t-_mobile_usa_and_att_merger_means_faster_and_more_widespread_broadband.
40. “As represented in the FCC docket, the proposed merger of AT&T and T-Mobile has received substantive support from national Hispanic organizations including Hispanic Federation” (“NAACP Endorses AT&T Deal,” Los Angeles Sentinel, June 3, 2011, available at http://www.lasentinel.net/NAACP-endorses-ATT-deal.html); Jason A. Lorenz, “AT&T, T-Mobile Merger Can Benefit Latinos, LatinoLA, June 14, 2011, http://latinola.com/story.php?story=9591.
41. Edward Wyatt, “AT&T Plans to Woo U.S. and Fight It,” New York Times, September 2, 2011.
42. “We begin by describing the strong competitors that the combined company will continue to face after this transaction is complete. These include not only providers that market service to customers living in most U.S. markets, but also ‘regional’ providers that market only where they operate networks. Again, providers in both categories offer their customers nationwide service plans” (Description of Transaction, Public Interest Showing, and Related Demonstrations, In the Matter of Applications of AT&T Inc.).
43. T-Mobile, investor conference call, transcript, January 20, 2011) available at http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cts=1331040673578&sqi=2&ved=0CDEQFjAA&url=http%3A%2F%2Fwww.telekom.com%2Fstatic%2F-%2F18868%2F1%2F110126-transcription-inday-si&ei=nhFWT9OyFaH10gGnvf28Cg&usg=AFQjCNGk8RXAWEnaBP9Fab1v8bfjScZRLA&sig2=QS_CDMMarvKtp6_LR-g1jQ.
44. John Delaney, “Analysis: AT&T Acquires T-Mobile US,” Comms Dealer, March 21, 2011, http://www.comms-dealer.com/market-analysis/analysis-att-acquires-t-mobile-us.
45. Description of Transaction, Public Interest Showing, and Related Demonstrations, In the Matter of Applications of AT&T Inc., 2.
46. Casey Johnston, “Obama Pitches Plan to Free 500MHz, Raise $28B, and Bring 4G to Everyone,” Ars Technica, February 10, 2011, http://arstechnica.com/tech-policy/news/2011/02/us-government-announces-plan-to-free-up-500-mhz-of-spectrum-implement-4g.ars.
47. “The process of revisiting or revising spectrum allocations has historically taken 6–13 years” (Federal Communications Commission, “National Broadband Plan,” 79).
48. Ibid., 269.
49. “AT&T is today sitting on more spectrum than any other wireless opera
tor in the top 21 markets in the U.S., and about a third of that spectrum is still being unused,” reported Marguerite Reardon, “Is AT&T a Wireless Spectrum Hog?” CNET News, April 29, 2011, http://news.cnet.com/8301-30686_3-20058494-266.html.
50. Wayne Watts, “AT&T Statement on Department of Justice Action,” news release, August 31, 2011.
51. Stacy Cowley, “AT&T CEO Pay Docked $2 Million for T-Mobile Debacle,” CNN Money, February 22, 2012, http://money.cnn.com/2012/02/22/technology/att_ceo_pay/index.htm.
52. Karl Bode, “The AT&T T-Mobile Deal Is Officially Dead After Historic Consumer, Industry and Regulatory Opposition,” DSLReports.com, December 19, 2011, http://www.dslreports.com/shownews/The-ATT-TMobile-Deal-Is-Officially-Dead-117504.
53. Mike Isaac, “T-Mobile Users Rejoice at Justice Dept. Blocking AT&T Merger,” Wired, CNN Tech, September 1, 2011, http://www.cnn.com/2011/09/01/tech/mobile/t-mobile-users-rejoice/index.html.
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