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Press Not Buying AT&T Spectrum Claims
Or Any T-Mobile Deal Benefit Claims, For That Matter
by Karl Bode Friday 29-Apr-2011 tags: competition · business · wireless · bandwidth · consumers · wireless
We've noted in several pieces how AT&T's justifications for the T-Mobile acquisition don't hold water, with the deal not really impacting AT&T's mobile broadband plans or helping consumers in any tangible way. AT&T's certainly not helping matters with their suggestions the deal is patriotic, or their repeated denials that AT&T/Verizon dominating 75%+ of the wireless sector doesn't create competitive issues. Even the normally unskeptical and pliable technology press is having a hard time buying any of AT&T's arguments. CNET is the latest, noting that the combined Qualcomm and T-Mobile deals makes AT&T quite the full-bellied spectrum hog:

This is in spite of the fact that AT&T is today sitting on more spectrum than any other wireless operator in the top 21 markets in the U.S., and about a third of that spectrum is still being unused...In the top 21 markets in the U.S., AT&T has about 284 MHz more spectrum than its closest competitor, Verizon Wireless, according to data provided by Verizon...AT&T and Verizon currently own more than 90 percent of the licenses for this spectrum in major cities throughout the U.S. And AT&T is hoping to add to its 700MHz coffers by buying an additional 12 MHz of 700 MHz spectrum that Qualcomm is selling.

AT&T has long been accused of being a spectrum hoarder, in part because gobbling everything in its path is kind of what AT&T does, but also because creating scarcity and driving prices higher keeps competitors at bay. CNET goes on to note that in addition to being well ahead of AT&T on LTE deployment, Verizon hasn't had nearly the types of issues AT&T has faced, despite having notably less spectrum and more users than AT&T. Unmentioned by CNET is the fact Verizon's on the record doubting they'll ever see real spectrum problems. CNET inevitably notes that the problem for AT&T hasn't been spectrum, but the simple fact that AT&T has done a poor job keeping their network upgraded:

AT&T's competitors say the carrier is facing the same issues they each face. And they argue that if AT&T is truly struggling to keep up with demand, it may be because the company has not managed its resources well or invested enough in its network....Look at Verizon Wireless as an example. Verizon, which has 104 million wireless connections on its network as of the end of the first quarter of 2011 compared with 97.5 million total wireless subscribers on AT&T's network, has on average about 10 MHz less spectrum in the top 21 U.S. markets than AT&T. And yet its service is often praised for its reliability.

As we've long noted, AT&T has always placed investor short-term demands ahead of network integrity, and the penny pinching results are frequently in stark contrast to Verizon (both FiOS and Verizon LTE). The Los Angeles Times meanwhile is busy likening AT&T's claims to Alice In Wonderland, noting that most of the think tanks gushing about the competitive benefits of the deal are being paid by AT&T.

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WHT

join:2010-03-26
Rosston, TX
kudos:5

Typo Police at Large

Verizon hasn't hand had nearly the types of issues AT&T has faced

Karl Bode
News Guy
join:2000-03-02
kudos:33

Re: Typo Police at Large

fixed, thanks.

Linklist
Premium
join:2002-03-03
Longport, NJ
kudos:5

Short version-not enough towers built

The short version of this is that AT&T didn't build enough towers and thereby wastes spectrum by cramming too many users on each tower. In other words, they are truly mismanaging the spectrum they already have, not to mention all the spectrum they have leased and are not using at all. Also while Verizon was increasing capital expenditures by 10% for wireless, AT&T was only increasing it by 1% in 2009 even though they knew they had serious congestion problems in their wireless network.
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Linklist
Premium
join:2002-03-03
Longport, NJ
kudos:5

Re: Short version-not enough towers built

Chart shows situation. I wish they had included Sprint in this chart as well.


quote:
spectrum that AT&T is already using to provide its 2G and 3G wireless services. The company hasn't even touched about 832 MHz of new wireless spectrum in the top 21 markets. This spectrum, which sits in the AWS and 700MHz bands, will be used to build AT&T's 4G LTE network.
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sides14

join:2007-11-29
Glendale, AZ
According to the AT&T Annual report, capital expenditures on wireless accounted for 43% of all capital expenditures for a total of almost $8.4 Billion in 2010 (»www.att.com/Common/about_us/annu···Full.pdf).

There are too many communities that want their wireless service, but don't want towers in the community. The wireless market has become saturated and the communities are hesitant to approve new tower constructions or the addition of new entrants onto existing towers.

Do you think that could possibly be the issue? In order to increase expenditures, you have to be able to build new equipment. Back office gear can only account for so much capacity and the remaining would be the addition of cell sites and better transport.

HappyAnarchy

@iauq.com

Re: Short version-not enough towers built

That doesn't explain why everyone else is able to get it done. It might be more expensive, but VZW recognizes the need to support infrastructure and invest in the future. AT&T doesn't.

Karl Bode
News Guy
join:2000-03-02
kudos:33

Re: Short version-not enough towers built

And while bureaucratic tower delays can be a problem, the FCC imposed new "shot clock" regulations in 2009 to speed up the process, forcing communities to act more quickly....

fifty nine

join:2002-09-25
Sussex, NJ
kudos:2

Re: Short version-not enough towers built

Doesn't help much. Local zoning boards backed by the NIMBYs who elected them love to ignore the FCC.

del ftl

@comcast.net

Re: Short version-not enough towers built

This used to matter more, but these days, unless you're dropping a tower where no one else has coverage you simply lease a spot 5-10 feet down on a pole your competitor uses and light up a new coverage spot.

For example. This tower in not in sussex, but a town close to you.
»www.t-mobiletowers.com/TowerDeta···=0&mode=
Note all 4 major carriers have coverage on that. But if one didn't, they wouldn't need to go through the headache of putting up a new tower.

(as an aside, i wish all carriers had a site like tmobile does showing the towers they own and what carriers are on them. Also note these are the towers tmobile owns, they certainly have antennas on other towers that are not theirs, as do all other carriers)
thedragonmas

join:2007-12-28
Albany, GA
kudos:1
oh really? they have towers here, all still EDGE, they said last year theyd have 3G here in december. guess what? no 3G still edge. the towers not the problem. them not wanting to upgrade markets and use the spectrum they have is the problem.
sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1
said by sides14:

According to the AT&T Annual report, capital expenditures on wireless accounted for 43% of all capital expenditures for a total of almost $8.4 Billion in 2010 (»www.att.com/Common/about_us/annu···Full.pdf).

There are too many communities that want their wireless service, but don't want towers in the community. The wireless market has become saturated and the communities are hesitant to approve new tower constructions or the addition of new entrants onto existing towers.

Do you think that could possibly be the issue? In order to increase expenditures, you have to be able to build new equipment. Back office gear can only account for so much capacity and the remaining would be the addition of cell sites and better transport.

AT&T's executives are on the record for stating their capacity problems were the direct result of cutting on capex to boost their stock prices. They cut capex for three years in a row, and only recently have tried to make up some of the ground lost.

So no, your excuses for AT&T hold no merit.

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Premium
join:2002-03-03
Longport, NJ
kudos:5
said by sides14:

There are too many communities that want their wireless service, but don't want towers in the community. The wireless market has become saturated and the communities are hesitant to approve new tower constructions or the addition of new entrants onto existing towersbe able to build new equipment.
Do you think that could possibly be the issue? .

NIMBY groups have caused problems in certain areas(San Francisco being a prime example), but AT&T has to claim a big share of the problem as well. New towers can get built, but it takes a couple years to do it. AT&T has neglected this problem far too long and now that the crunch is on they want to do it faster by buying up competitors instead of building on their own.
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flbas1

join:2010-02-03
Fort Lauderdale, FL

Re: Short version-not enough towers built

not to get too far off topic -

can we allow att to build towers but pay higher "fees" and dent the deficit budgets? locally and nationally?

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join:2002-03-03
Longport, NJ
kudos:5

Re: Short version-not enough towers built

said by flbas1:

not to get too far off topic -

can we allow att to build towers but pay higher "fees" and dent the deficit budgets? locally and nationally?

That is just a backdoor way to create higher taxes, which will be passed on to customers. Tower sites already pay local real estate taxes and in most places business fees as well. Higher fees isn't the solution I think. What would help is if the FCC held local gov't's feet to the fire by enforcing FCC rules on the approval process. Maybe if the FCC used all their staff lawyers for that instead of lobbying Congress, new sites would be built more quickly.
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jackoffjill

@windstream.net
All at&t wants to do is please the stockholders , They have no long term vison right now . It is finally catching up with them,and it is only going to get worse with these number crunching asshole managers that are working for the company, that want there bonus at all cost.It will be there down fall.I only need 8 more years to get my thirty in.In all the years i have worked for them,i have never seen so many incompetent people working for this company. Customer service is non existent, It is a shame

Gbcue
P.E.
Premium
join:2001-09-30
Santa Rosa, CA
kudos:8
Also, not enough backhaul for those sites.

IPPlanMan
Holy Cable Modem Batman

join:2000-09-20
Washington, DC
kudos:1

Not buying it either...

The Deathstar isn't fooling me in the slightest...

A 2 GB data cap for 25 bucks with 10 bucks per GB overages and still they have a capacity "shortage"? What a joke...

Transmaster
Don't Blame Me I Voted For Bill and Opus

join:2001-06-20
Cheyenne, WY
Reviews:
·CenturyLink

for several years AT&T had the iPhone cash cow

As long as AT&T had cash cow Mooola of the iPhone they didn't have to do anything. Complaints about coverage? Drop outs, poor bandwidth, cost, tethering. all where blown off. AT&T didn't have to improve anything much. They did very little to keep customers, they didn't have to, so instead of improving their network in a big way they spent the money of buying everything they could get their hands on. Combine this with and FCC that has been doing the "grab their dick and double click" boogy. AT&T has had a free ride from the Fed's.
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del ftl

@comcast.net

Re: for several years AT&T had the iPhone cash cow

I noticed that ATT lit up all the former alltell towers with hspa only coverage through half of Wyoming. So now Cheyenne officially has all 4 carriers

Vigilante2

@rr.com

Mobile Broadband Coverage False Claims

The mobile broadband device that was sold to me showed no signal when I tried it at home, despite the store agents claim that coverage was prevalent in my home city. After 5 attempts for help from local and 800-number T-Mobile reps with no resolution, I decided to cancel and now I'm being charged the monthly charge and $200 cancellation penalty. Unsympathetic agents were oblivious to my claim that the product never consistently worked and advised that the high penalty would be assessed no matter what. You take a risky chance with this company.

QUBIUS

@sbcglobal.net

att t-mobile

Chairman Reed E. Hundt ,
“In the long and tragic history of inequality between races and gender in America, today we are creating the greatest single opportunity ever made fairly available to small businesses, women and minorities. For the first time in our nation’s history, the federal government is creating opportunities in a new industry in which all Americans will have a fair chance to compete from day one”. “entrepreneurs’ C Block” is established, which is designed to fulfill the statutory mandate to ensure that small businesses, rural telephone companies and businesses owned by minorities and /or women (referred to as “designated entities”) have the opportunity to participate in providing broadband PCS.

C & F “Entrepreneurs” Block Auctions.
Congress required the Commission to "promote economic opportunity and competition and ensure that new and innovative technologies are readily accessible to the American people by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small business, rural telephone companies, and businesses owned by members of minority groups and women."

Designated Entities
The FCC determined that setting aside certain blocks solely for bidding by designated entities for each auction might be necessary to ensure their opportunity to acquire licenses. For the broadband PCS auction, the FCC found that set-asides would be necessary for designated entities due to the ability of large competitors with extensive financial capabilities to outbid those without sufficient access to capital. Blocks C and F were set aside as the "entrepreneurs' PCS spectrum licenses ."

AT&T & T- Mobile
In 1995 AT&T (“Humpty Dumpty”) was not allowed to bid on the C & F “entrepreneurs” blocks licenses auction No.5 and for good reason the auction was set aside for small business only. If the FCC allows this proposed merger request between Humpty Dumpty and T-Mobile Humpty Dumpty will end up owning over 95% of all the original C & F Block “entrepreneurs” blocks spectrum licenses that was set aside for by the Commission and Congress for small business only. “It’s an outrage that this proposed merger request is even being considered by the commission. The FCC “entrepreneurs” designated entities auction’s and it’s auction rules was a monumental failure from day one. Approving this proposed merger request between Humpty Dumpty and T-Mobile would be appalling and would be virtually nailing the last nail in the coffins of small business, the life blood of America. Small business was the ones that started the whole cell phone business and now you want cut off any real opportunity for small business to compete in the wireless market. And to made a bad situation worse Humpty Dumpty is asking the FCC not to mandate interoperability so that small carriers can have access to new 4G network equipment, phones and devices that are able to work on the various 700MHz spectrum bands as well as having voice & data roaming at fair prices which Humpty Dumpty claim is extremely complicated and not possible. This kind of practice by a company dominating the wireless business is abusive behavior and must be viewed as anti-competitive. What happen to the Antitrust Laws in this country did it go the way of the Glass Steagall Act ? Bailing out AIG only cost the tax payers $700 billion. The bottom line is no interoperability in the 700MHz. spectrum band then no merger. Humpty Dumpty can not have it’s cake, and eat it to. Humpty Dumpty was not allowed to bid on the C & F “entrepreneurs” blocks licenses back in 1995 so why should the FCC allow them to own and control 95% of all the small business PCS spectrum licenses now. The FCC should mandate Humpty Dumpty to divest of all C & F blocks licenses and hold a new “entrepreneurs” auction for true small business ensuring that entrepreneurs have an opportunity to compete in the wireless market on a level playing field. The fact of the matter is this proposed merger request between Humpty Dumpty and T-Mobile will give two companies control of 80% of the wireless business. I ask you, how can that be good for competition? The decision the Commission must make is to deny the proposed merger between Humpty Dumpty and T- Mobile. Did you say Humpty Dumpty has no clothes on? Vincent D. McBride
lefty1

join:2002-10-25
Clay, NY

Spectrum

It's not even a credible lie. Even an elected official could see through that one - unless his or her view was obstructed by some money. And that's more than likely what'll end up happening. In the end, AT&T will get what they want.

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