NTCA's The New Edge » AT&T

Consumer Protection Matters to the VON Coalition…Sometimes

Michael Romano — Wed, 01 Feb 2012 20:41:26 +0000

If it’s an information service, no blocking. If it’s a telecom service, no blocking. But if it’s something in between, well not so fast . . .

More than 20 appeals of the FCC’s recent USF/ICC reform order have been filed, and it will be fascinating to see the U.S. Court of Appeals for the Tenth Circuit sort through all of the concerns raised. Of course, many of the appellants raise common issues, such as challenges to retroactive caps on cost recovery and/or the mandatory drive toward a default zero ICC rate for all switched services. (NTCA teed up both of these issues, among others, in its docketing statement filed with the court.)

But one party’s filing jumped out at me the other day. A docketing statement filed by the VON Coalition presents one straightforward – but quite astounding – issue:

The VON Coalition seeks review of the portions of the Report and Order . . . that impose a “No Blocking” obligation on providers of interconnected Voice Over Internet Protocol (VoIP) and one-way VoIP services . . . .

Before turning to why this appeal is so astounding from a public policy perspective, let’s step back and consider who’s part of the VON Coalition. The group’s website indicates that its members include AT&T, Google and Vonage. These are companies who typically claim to take very seriously seamless internetworking and the demands of consumers. Vonage years ago challenged a carrier that was allegedly blocking ports used by customers to initiate and receive VoIP traffic. Meanwhile, Google was one of the leading voices in public policy circles in the “net neutrality” debates, arguing among other things that a nondiscrimination rule should prevent “broadband providers from blocking, degrading, or prioritizing Internet traffic.”

So at least one leading member of the VON Coalition has argued that blocking in the context of a regulated telecom service is bad. Some VON members have argued that blocking in the context of a broadband information service is bad. But apparently, if it’s a different kind of information service (which is where many VoIP providers see themselves) or if it falls somewhere between an information and telecom service (which is where some others see VoIP), VON thinks a different standard should apply.

It’s astonishing to see the VON Coalition make such arguments given where they have been on blocking issues. Even if there could be legitimate questions about the application of certain obligations to information services, the FCC narrowly applied its new blocking rule to calls destined for or coming from the PSTN – and, once again, the VON Coalition seems to have no problem with applying blocking prohibitions even more broadly to information services in other contexts.

Before treading further down this rather awkward path, the VON Coalition group might want to revisit the prior consumer-centric mantra articulated by Google:

The fundamental principle is that it should be the consumer . . . that chooses what content and applications he or she interacts with, and which . . . services, applications and content will be the winners and losers. Thus, as the Commission has proposed, the core affirmative function of the nondiscrimination rule should be to prevent a [] provider from using its control over the network to favor or disadvantage (by blocking, degrading, prioritizing, throttling or other means) particular sources of content or applications.

AT&T rightfully noted in its own Public Policy Blog a while back the concerns about allowing some industry players to block calls on the PSTN while others were subject to blocking prohibitions. The FCC took sensible steps in its recent order to help remedy this regulatory disparity, in the interests of consumers and the integrity of the PSTN. It’s one thing for parties to have disagreements about compensation structures or interconnection rights. But it’s another thing altogether to see parties who purport to stand up for consumer interests against blocking in the context of both information and telecom services try to wiggle out of consumer protection duties when those obligations boomerang back their way. This ultimately begs the question – who is the VON Coalition really trying to protect?

Stay informed about the FCC’s USF/ICC reform proceeding. Read the Washington Report (NTCA member log-in required).

AT&T and Dish: Rumor or Cage Rattling?

Steve Fravel — Wed, 01 Feb 2012 15:58:32 +0000

According to Credit Suisse analyst Stefan Anninger, a seven-page FCC exparte AT&T penned may be a strong indicator of the carrier’s interest in buying up the 40Mhz S-band spectrum currently controlled by Dish Network.

After separate bankruptcy proceedings last year, Dish Network now holds DBSD North America, Inc. and TerreStar Networks, Inc. and their satellite spectrum licenses. Dish recently petitioned the FCC for an ancillary terrestrial component waiver that it says it will use to provide a wireless-hybrid 4G LTE network.

In its letter to the FCC dated January 26, AT&T states that it supports Dish’s efforts to gain approval in transferring the DBSD North America and TerreStar licenses to facilitate the new service. However, AT&T is advocating an aggressive network build out for the service, requiring network availability to 100 million people in 33 months, arguing that Dish Network should be held to the same build-out schedule as that required of LightSquared, currently waiting for FCC approval for a similar venture.

The Dish build-out schedule request also may be a very strong signal that AT&T, currently trailing rival company Verizon in controlling requisite amounts of spectrum to support high-speed Internet and video services, has eyes on buying Dish Network.

AT&T abandoned the $39 billion T-Mobile USA acquisition at the end of 2011 after the Department of Justice and the FCC both issued notices opposing the deal. Considering the reversal AT&T is making in the January 26 letter on the Dish Network petition from comments filed late last year concerning the Dish Network project, AT&T may have revealed its purchase target in its quest to attain additional spectrum.

In a January 31 Bloomberg article on AT&T and Dish Network, Stefan Anninger of Credit Suisse values the Dish spectrum at $8.6 billion, using the recently announced and pending Verizon $3.9 billion purchase from Comcast, Time Warner Cable and Cox Communications of unused spectrum as his base of measure.

The LightSquared Week in Review

Steve Fravel — Sun, 29 Jan 2012 17:45:27 +0000

Early last week, LightSquared announced that it had signed its 39^th wholesale agreement, welcoming Telcom Ventures to the 4G LTE service. Telcom Ventures operates two services, Assist Wireless and New-Talk. Both services carry the FCC certification of Eligible Telecommunications Carrier (ETC), which allows them to provide lifeline services to low-income subscribers.

LightSquared‘s plans are currently on hold, waiting for approval from the FCC before it can begin operations with its wholesale partners.

To that end, the FCC last week requested public comment on a petition from LightSquared requesting a finding that global positioning systems (GPS) do not merit legal protection from interference that may occur once LightSquared becomes operational. LightSquared also released a statement encouraging the GPS device manufacturers to release details concerning how their devices performed under the government testing of the LightSquared spectrum. Although shielded by non-disclosure agreements (NDAs), LightSquared urged the GPS makers to voluntarily withdraw the NDAs to add clarity to the findings.

Also last week, Sen. Charles E. Grassley (R-Iowa), ranking member of the Senate Judiciary Committee, sent a letter to Philip Falcone, CEO of Harbinger Capital Partners, the primary investor in LightSquared, concerning “questionable” communications with his office.

According to Sen. Grassley, he has been asked to tone down and back away from his investigation and criticisms regarding the FCC handling of the petitions and requests for operations by LightSquared. Sen. Grassley described a conversation with Todd Ruelle, chairman and CEO of Fine Point Technologies. Mr. Ruelle is alleged to have remarked that his company “only gets paid if the deal goes through.” Mr. Ruelle then apparently commented that a call center would be built in Iowa, once LightSquared received the go ahead to operate its network. Mr. Grassley indicated that he would not pull back.

In an article published by TR Daily, Mr. Falcone was reported to have disavowed the suggestions and behaviors of Mr. Ruelle, indicating that Mr. Ruelle was acting entirely on his own.

Staff members from the FCC recently met with Sen. Grassley in a two-and-a-half-hour meeting concerning LightSquared.

In a related story: AT&T issued recommendations in an ex parte filing concerning the Dish Network’s request for an ancillary terrestrial component waiver similar to the waiver granted to LightSquared, and approval of license transfers that would allow Dish Network to begin operating a 4G LTE satellite/terrestrial hybrid network.

AT&T indicates that Dish Network should be held to the same build-out requirements as LightSquared and that Dish should adhere to the same performance standards. AT&T asked the FCC to hold Dish to the same 700 Mhz interference rules applicable to other 700 Mhz licenses.

AT&T said that like LightSquared, Dish should provide terrestrial coverage for 100 million people in 33 months and 260 million people in 69 months. AT&T also indicated that the Commission should “reject calls to impose on Dish the same unlawful and anticompetitive spectrum use restrictions as were adopted in the Harbinger/SkyTerra Order.” The order restricted SkyTerra from providing any bandwidth via the terrestrial network to the top two wireless carriers, AT&T and Verizon, without first gaining approvals from the FCC. Also under the order, SkyTerra was forced to restrict access to its terrestrial network, banning access to AT&T and Verizon in economic areas that carry more than 25% total data traffic absent approval from the FCC.

AT&T is quoted as saying that such restrictions and barriers to specific companies “would be anticompetitive, discriminatory, and the height of arbitrary and capricious.”

AT&T and Sprint Add LTE Buildouts

Steve Fravel — Mon, 09 Jan 2012 17:59:50 +0000

AT&T and Sprint Nextel, in separate announcements last week, indicated that both would be picking up speed in the deployment of new 4G Long-Term Evolution (LTE) networks.

AT&T announced the launch of LTE service in 11 new markets last Thursday, adding San Francisco, New York and Los Angeles. AT&T indicated that it had completed construction projects in 2011 ahead of schedule, and it is well positioned to reach 74 million potential subscribers. AT&T is set to complete the 4G upgrade near the end of 2013.

Sprint Nextel said it will launch new LTE services in 10 new markets during the first half of 2012. Dallas, Atlanta, Houston and San Antonio join a growing list of cities soon to be served by the operator.

In a related story, Sprint Nextel announced on Friday that it has restructured its corporate management group, relieving four executives of their positions. Bob H. Johnson, in charge of customer services; John Carney, responsible for consumer marketing; Danny Bowman, president of integrated solutions; and Chris Rogers, a senior executive in corporate development and spectrum, are all leaving the company. These positions will be absorbed in an effort to streamline and simplify the company, making it more flexible.

AT&T Acquires Qualcomm’s 700 MHZ Spectrum

Steve Fravel — Fri, 23 Dec 2011 18:20:16 +0000

Although not the same magnitude as the T-Mobile merger, yesterday the FCC approved the sale of Qualcomm’s 700 MHz spectrum to AT&T. The commission attached a few conditions to the sale. The highly technical and specific conditions concerning interoperability and interference are described by FCC Chairman Julius Genachowski as potentially helpful to smaller operators.

The 700 MHz spectrum was originally purchased and used by Qualcomm to support its Media FLO TV product, a mobile video service which it shuttered in 2010. As such, the ironic aspect to this purchase is the increasing demand for additional bandwidth by consumers for watching video on AT&T’s mobile phones.

AT&T Ends Quest to Purchase T-Mobile USA

Jesse Ward — Mon, 19 Dec 2011 22:10:33 +0000

The biggest merger of the year is now dead. AT&T announced earlier this afternoon that it will end its bid to acquire T-Mobile USA, a quest which began in March of this year.

The statement, reads, in part:

“The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry. It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled.”

In its statement, AT&T took this opportunity to encourage the FCC to meet the current and future spectrum needs of the wireless industry, including expeditiously approving AT&T’s acquisition of unused Qualcomm spectrum currently pending before the commission.

To reflect the break-up considerations due T-Mobile parent company Deutsche Telekom, AT&T will recognize a pretax accounting charge of $4 billion in the fourth quarter of 2011. AT&T had already set this money aside. Additionally, AT&T announced that it will enter a mutually beneficial roaming agreement with Deutsche Telekom.

Dish and T-Mobile?

Steve Fravel — Mon, 19 Dec 2011 21:25:44 +0000

According to Dish Network CEO Joseph Clayton, if the AT&T/T-Mobile takeover fails, Dish Network would be interested in exploring some partnering arrangements with T-Mobile.

Earlier this year Dish Network acquired two satellite companies and their spectrum out of bankruptcy. Dish has “hinted” strongly that it intends to provide a more diverse offering that will include video, broadband and voice services. T-Mobile is one possible partner. Early in the fall, Dish Network had openly talked about pursuing a deal with Sprint or Clearwire intending to provide a satellite-terrestrial hybrid service.

According to Clayton, “We’re not interested in making money on selling our spectrum. We want to use it to create a national wireless network, video, voice and data. We’ve got expertise in satellite TV, and we will in satellite broadband. The voice part, we’ll need some help with.”

Dish Network is currently on hold, waiting for FCC approval to use its acquired S-band spectrum.

Andreas Fuchs, a spokesman for T-Mobile USA, indicated that a deal with Dish Network is not being considered. He indicated that T-Mobile and parent company Deutsche Telekom are still pursuing the AT&T deal.

Frontier to Re-sell AT&T Wireless Service

Jesse Ward — Mon, 21 Nov 2011 17:37:54 +0000

Frontier Communications Corporation announced November 15 that it has reached a three-year agency agreement with AT&T to re-sell AT&T smartphones, tablets and applications, as well as access to its mobile broadband network.

Frontier will now be able to bundle its broadband, voice and satellite TV services with AT&T wireless service. AT&T Mobility and Frontier plan to trial the offering in the first half of 2012; once operational processes are complete, the offering will be available throughout Frontier’s nationwide footprint.

“Teaming with one of the most respected brands in global communications will cost-effectively address our customers’ desire for a single-source provider for all their communications needs,” said Maggie Wilderotter, Chairman and CEO of Frontier. “Frontier, with AT&T Mobility services, brings our customers the best cellular service, combined with Frontier’s high-speed Internet, video and other products.”

For more, see this release.

Big Quarter for DirecTV

Steve Fravel — Fri, 04 Nov 2011 18:29:26 +0000

DirecTV is reporting its largest third-quarter subscriber increase in the last five years. From July to September, Direct TV added 327,000 subscribers. This increase is likely the result of the NFL Sunday Ticket promotion DirecTV launched earlier this year.

DirecTV also is reporting a larger average revenue per U.S. user, up 3.6% from a year ago. The company’s stock is trading at a higher price, reflecting a 6.2% increase.

In related news, AT&T announced that it had renewed its agreement to re-sell DirecTV, agreeing to a three-year extension.

XBox 360 to Offer FiOS, Xfinity On-Demand Content

Jesse Ward — Fri, 07 Oct 2011 17:00:11 +0000

As had been rumored for some time, Microsoft announced yesterday that it will expand the video content available over its Xbox Live system to pay-TV subscribers in most major markets. Microsoft has deals in place with nearly 40 entertainment providers including AT&T, Comcast and Verizon FiOS, as well as Bravo, ESPN, HBO GO and Syfy. This is in addition to the inherent gaming services and previously announced content from Hulu Plus, Netflix and Google’s YouTube which are available on the Xbox.

Pay-TV subscribers will need to authenticate in order to access the content through the Xbox system. In general, users also will need to subscribe to video and broadband services from their traditional service provider (in other words, cord cutting is not an option), and subscribe to a $60 per year Xbox Live Gold membership. (Microsoft confirmed today that only a small amount of content will be available on the Xbox without authentication and Xbox Gold status.)

Analysts had anticipated a game-changing announcement, speculating that Microsoft would utilize its gaming system as a tuner to deliver live video feeds from cable channels. Analysts were expecting that Microsoft would announce a new model, a virtual cable operator offering services directly to the public and breaking up channels into a la carte offerings.

However, the software giant and its partners did not go that far; instead, subscribers will only be able to use the Xbox to access a TV Everywhere-type service, a value-add to their traditional Pay-TV service. Nevertheless, this announcement is one more step in the traditional pay-TV provider’s migration away from a proprietary set-top.

Although the Microsfot release lists a variety of cable channels, as a subscriber, what content you will have access to depends upon your video provider. For Comcast and Verizon, they are offering content on the Xbox which is already available on a variety of mobile and in-home devices. For instance, on the Xbox service, Comcast will offer access to its existing on-demand content library, while Verizon’s FiOS customers will have access to the limited channels already contained in the service provider’s established TV Everywhere package.

So what’s in this for subscribers? Well, of particular note, Microsoft has said that it intends to incorporate Kinect functionality into the service, which will allow users to quickly search for content using vocal and physical commands.

“Today’s announcement is a major step toward realizing our vision to bring you all the entertainment you want, shared with the people you care about, made easy,” said Don Mattrick, president of the Interactive Entertainment Business at Microsoft. “Combining the world’s leading TV and entertainment providers with the power of Kinect for Xbox 360 and the intelligence of Bing voice search will make TV and entertainment more personal, social and effortless.”

As a related aside, back in October 2010, AT&T announced that its subscribers could utilize the Xbox as a fully functional set-top box – one step further than its competitors add-on offerings discussed above. However, DSL Reports notes that the telco is changing course and will now require a user to subscribe to the Xbox Live Gold level service in order to continue using the game system as a set-top. AT&T will offer users a $60 service credit to offset the cost of the first year of membership.