ACG Research

ACG Research
We focus on the Why before the What

Friday, December 2, 2011

The US Mobile Consumer Deserves a Reset

The AT&T and T-Mobile merger raises serious issues as to how the FCC is conducting its regulatory oversight responsibility. Clearly, it’s time for real reform.

Whether you are for or against the merger between AT&T and T-Mobile, you have to be very concerned at how the process is playing out (refer to Roger Entner’s well documented FierceWireless’ article (

It is convenient to lay the broken process at the feet of the current administration; however, this is not a new failing of just Obama's FCC. Dating back to 2006 Former Chairman Reed Hundt observed that the FCC has the “reputation for … capture by special interests, mind-boggling delay, internal strife, lack of competence, and a dreadful record on judicial review.” The low opinion of the FCC’s reform process continues today ( “Rather, because the agency operates with limited imagination, almost no strategic thinking or planning, and with an absence of well-developed sources of data to guide its decisions, it often misses opportunities to chart independent courses of action…to be sure, the agency also has an uncomfortable track record of conducting its proceedings…without engaging in careful data-driven decision-making… ( This unfortunately sounds all too familiar in the AT&T/T-Mobile’s application.

The FCC also broke with tradition and before having a full vote, had already signaled its intentions. Actually, the entire process has been broken, raising serious doubt as to how the FCC is conducting its regulatory oversight responsibility.

What this means is that a reset is needed and that is just what AT&T and T-Mobile have done by withdrawing their application. Their message: let’s start the process over and get it right this time. But there is a dilemma: How will it be possible to get an unbiased review, using the established criteria, in which that the market can be confident for this and future transactions?

Sticking with precedent would be a great start. Mobile competition has always been measured on a local level (for example, Denver is different from the competition in Washington, DC), and that should not change. Considering ALL of the competitive options is the next step. MetroPCS, Cricket, Leap, C-Spire and others deserve to be recognized for their important roles in the market, not cast aside. Let’s at least start there. After that, are we going to regulate users and/or spectrum holdings? That also needs to be addressed especially in light of the Verizon/CableCo spectrum deal (refer to Phil Goldstein’s article: They may look like separate transactions, but the impact on the user and the markets are definitely linked.

The US market is widely regarded as the most competitive 4G market in the world. As pointed out by the FCC, Americans enjoy unprecedented choice when it comes to their mobile services. While the US has the most mobile operator choice, other countries such as Sweden show faster service by using larger spectrum allocations. However, the FCC continues to be mute on how to solve the near-term problem at hand: spectrum availability. Their actions on AT&T/T-Mobile and VZW/CableCo will speak volumes. The mobile broadband market is too important to America’s growth, competitiveness and economy to be saddled with such an opaque and inconsistent regulatory oversight process as exhibited during the AT&T/T-Mobile review. It may turn out that this merger will not receive government approval, but let’s complete the entire process to determine the outcome. American mobile consumers deserve nothing less.

For more on T-Mobile read Chris' article When it comes to 4G, T-Mobile has the advantage on FierceWireless.

Chris Nicoll

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.