Wireless Markets In The Hands Of The Big Bells K-Street And The Winds Of Change That Move The FCC

The average mobile bandwidth consumer needs to pay attention to the musical chairs played by providers of mobile as well as home use of cable services.  Business users aren’t subjected to the same fluctuations and are more likely to lock in costs longer term.  AT&T blames it on the explosion in data usage and have raised prices to $20 for a 300-megabyte monthly data plan, up from $15 for 200-mb currently. Users with higher requirements can also opt for $30 for 3 gigabytes — versus $25 for 2 GB previously — or $50 for 5 GB, up from $45 for 4 GB.  The state Public Utilities Commission no longer regulates basic rates, so AT&T doesn’t have to justify the 25% increase to $15.37 a month.

Still licking their wounds from the rejection by the FCC to acquire T-Mobile, from its parent company Deutsche Telekom last year, the mother of all bells is desperate to move their stock price and worried that at the FCC will manage the proposed auction of government-owned broadcast spectra in a manner that will prohibit it, the second-largest national wireless carrier — along with Verizon , the largest carrier — from buying any of it.

The bills that would authorize the auctioning of that spectrum are expected to be introduced in Congress next month. AT&T is concerned that the present wording of the proposed legislation would be modified to give the FCC total control over who would be eligible to bid and who would not.

“Our position is not that we are against the FCC overseeing spectrum auctions,” an AT&T spokesman said, according to the New York Post. “We simply are asking why the FCC wants the Congress to strip language from a bill that says the FCC can’t exclude qualified bidders.”

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The FCC was clearly mandated years ago to encourage competition, yet things are not always what they seem.  According to the leader of AT&T’s Federal Regulatory group, Bob Quinn, in the AT&T Public Policy Blog writes that “[t]he proposed statutory language ensures any qualified entity’s right to participate in the auction and prohibits the FCC from blocking an otherwise qualified bidder from participating in the auction — i.e., creating rules designed to pick winners and losers in the auction itself.”

To compensate, AT&T ramped up contributions to K Street to $20.2 million in 2011, up from $15.4 million in 2010, according to U.S. Senate filings, seventh-most among corporations, according to the Center for Responsive Politics, a Washington-based research group.  However, AT&T is still in need for additional airwaves to expand its advanced high-speed 4G services given its exponential growth in mobile broadband traffic.  Still in need for additional airwaves to expand its advanced high-speed 4G services given its exponential growth in mobile broadband traffic, it’s clear the second-largest U.S. mobile service provider is not about to roll over and sink further.

How these pieces fit together in the next few years are ominous for many markets including the U.S. consumer and business markets.  With no clear leader in sight, and with resources that stretch the boundaries of reality, the formidable players are not pulling any punches and politicians are waiting to exploit the slightest weakness.


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