FCC Chairman Defends Nixing AT&T/T-Mobile Deal

by Matt Klassen on May 9, 2012

Officially kicking off the annual CTIA conference, held in New Orleans this year, Federal Communications Commission chairman Julius Genachowski defended his committee’s decision to block the AT&T acquisition of T-Mobile, saying in his keynote address that preventing such a deal from taking place doesn’t hurt the wireless industry’s spectrum position and in fact promotes healthy competition to the benefit of us all.

His defense came following the observation that mobile devices are on pace to exceed the bounds of current carrier network capacity, a looming spectrum crisis the prevention of which the FCC sees its chief task in the months and perhaps years ahead. To that end, Genachowski maintained that the FCC has several previously untapped spectrum sources it is looking into, including developing a spectrum sharing plan between the government and public sector carriers, freeing up bandwidth previously reserved for government use only.

But with the FCC’s stated mission to free up spectrum and enable the creation of the wireless networks of tomorrow, Genachowski has come under fire from several sectors, with many saying that his Commission is actually undermining its own stated principles by preventing companies like AT&T from doing what they need to do to acquire more spectrum.

For a bureaucratic agency that has time and again demonstrated (to me at least) that it lacks both the will and the power to enforce rules and promote change in the wireless industry, it was certainly refreshing to hear Genachowski state that allowing an acquisition deal like the AT&T/T-Mobile fiasco was simply a line that he and his commission were not willing to cross.

In fact, at the time the agency believed (rightly in my opinion) that approval of such a deal would almost certainly stifle competition resulting in higher prices for consumers and widespread job loss across both the AT&T and T-Mobile work forces. Further, as I’ve said many times before, simply giving these companies more spectrum won’t solve anything; they have to learn how to effectively use what they have first.

Not using his keynote address as simply a platform to defend his actions in the previous months, Genachowski laid out the framework of a few plans for how his agency plans to combat the spectrum crunch, focusing primarily on the aforementioned government share plan. As it stands, there is considerable spectrum dedicated to government use, and the FCC is currently in talks with the National Telecommunications and Information Administration to test spectrum sharing options.

Further, Genachowski noted that developed more small cell designed to help boost network connectivity would also help assuage the spectrum crisis by putting consumers in closer proximity to the physical cell sites.

In the end, despite what you may think of the FCC—its bungling of enforcing regulations, the glacial pace of the promised spectrum auction—it seems to me that at least in this one instance with AT&T and T-Mobile the agency got it right, preventing a deal that would have drastically undermined competition and ultimately would have hurt consumers.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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