AT&T Responds to DOJ - What They Missed

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AT&T Responds to DOJ - What They Missed

AT&T responded to the DOJ regarding the blocked T-Mobile USA acquisition saying that the proposed merger would be good for consumers as it would allow AT&T to gain access to T-Mobile spectrum allowing their call quality to improve and the number of dropped calls to be reduced. This in turn they argue would lead to lower prices. Ma Bell 2.0 continued to explain that the wireless business is fiercely competitive which has resulted in lower prices over time.

The interesting takeaway here is that there is nothing new being argued. These were the original reasons presented when the merger was suggested. Sure, AT&T went on to say that smaller regional players aren’t being taken that seriously by the DOJ but to this point it seems consumers aren’t taking them that seriously either.

The way I see it, AT&T is basically saying their growth will be severely limited if this merger doesn’t take place because the spectrum doesn’t exist for them to serve the growing needs of their customers. But critics would likely respond that in a free market with vibrant competition, an independent T-Mobile would take advantage of the situation and advertise their network is superior and potentially even lower prices – thus luring customers from the oversubscribed AT&T network to T-Mobile’s.

This situation is even more likely as T-Mobile USA gets a nice chunk of AT&T spectrum if the deal does not go through.

It is worth noting that the mobile market has to a certain degree been in an unusual state in the last five years in-part because of AT&T Mobility’s exclusivity on Apple products. The combination of the popularity of Apple’s iOS-based mobile devices coupled with the amount of mobile data users of these devices consumed has led to a challenge AT&T has not solved yet.

One way the company has tried to cope is to put mobile WiFi hotspots around the US – in fact there is one here in Austin where I am as I prepare for ITEXPO next week. But sadly I haven’t been able to connect to it for some reason. Perhaps it’s oversubscribed as well? smiley-smile

Although AT&T hasn’t argued this point – it could be the one fact they need to explain as to why competition will be vibrant in the future – even after a merger between the number one and four players in the same market. Basically it is Super WiFi or white spaces. You know – those frequencies which are unused but could potentially be the basis for a nationwide wireless network with tremendous range and capability.

Next Week at Super WiFi Summit in Austin a collocated ITEXPO event, the industry will get together to discuss how this market is evolving and come up with ways to ensure it becomes a major wireless communications enabler.

To give you an idea of how big a space this could be – take a look at who is presenting at the show. Google, Microsoft, Telcordia, Carlson, Nokia, Neul, Spectrum Bridge, 6harmononics and Adaptrum. I am told we also will have most of the attorneys and lobbying power in the rooms including Rick Whitt, Michael Calabrese, Marty Stern (K&L Gates), and Steve Coran (RiniCoran).

The goal of this piece wasn’t to bring up these TMC events but the tie-in is just too important to ignore. As I see the world, Super WiFi could be to 4G what VoIP was to the PSTN and since I am going to be part of a Death of the PSTN keynote panel this coming Tuesday there should be little doubt how that battle has ended up.

The challenges of Super WiFi are many but technology seems to find a way to enable new competitors to emerge where you least expect them. Google never knew that some college kid was going to invent social networking and challenge their dominance in online ads. Yahoo didn’t realize that their enviable position of being the premiere online destination would eventually be successfully challenged by Google, Facebook and countless others. Nokia and RIM didn’t see the iPhone coming and Microsoft, Palm and HP did see the iPad coming and Microsoft was even first to the tablet market and still Apple is gaining desktop and mobile share from all three and Microsoft still doesn’t have a new tablet OS on the market.

So my suggestions to AT&T’s lawyers would be stop explaining how a merger will create jobs because there seem to be no examples of a merger yielding more jobs – ever. Instead focus on new technology because although I would rate the real threat of Super WiFi to 4G today as very small, there was a time when the WiFi market didn’t exist at all and we saw how quickly it proliferated once the prices for hardware started to decline rapidly.



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