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Tech at Night: AT&T, T-Mobile, FCC, Patents

Tech at Night

So the top story this week is going to be the AT&T acquisition of T-Mobile USA. There’s a lot being said about it, about unions, about competition, but the story I’m seeing emerging is that this deal is about spectrum. AT&T sees in T-Mobile a way to get the spectrum it needs going forward. In fact, even power grabbing FCC Chairman Julius Genachowski said to the CTIA that this is an issue:

If we do nothing in the face of the looming spectrum crunch, many consumers will face higher prices – as the market is forced to respond to supply and demand – and frustrating service – connections that drop, apps that run unreliably or too slowly.

So not only is T-Mobile a sensible purchase for AT&T in the short run, due to their use of similar technology, but in the long run this is the kind of purchase AT&T may need to be able to compete with Verizon. Verizon, of course, already got more spectrum when it bought the C Block of old television spectrum in 2008.

So if we want competition now and in the future, we need to let the deal happen.

I already addressed other competition concerns on Monday, but now I m just going to go ahead and give a rapid fire overview of other outlooks I’m seeing.

  • Well-off radicals are calling it “unthinkable” not to have the state intervene on this, and dictate whom can or cannot buy T-Mobile USA. Of course, that particular rhetorical trick is misleading, because today’s AT&T is not the same as 1987′s AT&T. AT&T is only so in name only: it used to be called Cingular.
  • Dick Blumenthal, the guy who lied about a war record, all but spitting on actual war veterans, wants to use the deal to push for Net Neutrality. What does one have to do with the other? Nothing, unless you’re a power-hungry Socialist aiming for total state-run media in America, like Free Press is.
  • Harvard Business Review analyzes metrics of the health of wireless competition, and warns that the FCC may use some irrelevant ones as a pretext to block the deal saying “Although the FCC’s assertion on what constitutes prime spectrum might be helpful in blocking a merger of AT&T and Verizon, or barring AT&T or Verizon from purchasing all of the additional spectrum below 1000 MHz, it is not helpful here.” Hal Singer’s concusion is that it’s all about prices, and everything else is a dodge. Can a combined AT&T/T-Mobile raise prices without bleeding customers to Verizon, Sprint, and others? No way, I say.
  • Bret Swanson at Forbes says the deal is good for everyone because it’s necessary for either company to continue dealing with the growth of wireless data, or the “exaflood” as he calls it. He cites Cisco’s prediction that wireless data traffic will double 26 times from 2010 to 2015. He points out that any other way to acquire spectrum may cause AT&T to have to wait four years, time that might let Verizon dominate the market.
  • Tech Liberation Front also hammers the spectrum issue, calling the problem “artificial spectrum scarcity.”
  • TLF also hits the competition factor with a wonderful illustration of how a series of wireless mergers have resulted in lower prices, not oligopolist’s rents, for the public. The market is competitive.
  • The left continues to split on the merger, with Loretta Sanchez and Joe Baca, California Democrats, coming out in favor. Also, some “minority groups” who know that the poor need a competitive market, particularly in cities where it may be harder to get some wired Internet options, are also in favor of this. So of course the radicals are accusing them of being bought off. Typical Alinskyite tactics from the neo-Marxists there.

Moving on, I do have some other things to cover. Facebook’s Fergal Walker thinks wireless Internet will move away from unrealistic unlimited plans, to “customers paying more for eating more.” People need to get ready for that. TANSTAAFL and all that.

I’d have attended The US Chamber of Commerce’s Restoring Balance to the Regulatory Process seminar, but I’m on the other side of the country. We’ve got to do something about runaway regulators, though.

Example: The European Union nearly passed a law requiring all phones have a MicroUSB port for charging and data access. They stopped short at the last minute thankfully, but Slippery Brick slipped the mask and went political, complaining about it. I’m glad though, because I want firms like LG to be able to find even more convenient charging methods. Regulation harms innovation.

Bad Patent of the Day: Google patents the Google Doodle, as though they were the first company ever to do specialized versions of a logo for special events. I seem to remember the highly successful 1984 Summer Olympics, when it seemed like every company out there was rushing to join in. We need patent reform, and not the Leahy bill which would just make life easier for big corporations with lots of patent lawyers.

Meanwhile, Sony continues to get a government subsidy on covering up the poor engineering of the Playstation 3 software lockouts, which go far beyond copyright and control what you can do with your own Playstation 3 in the privacy of your home.

If China can disconnect phone conversations including the word protest, then people shouldn’t doubt me when I say that AT&T can tell if you’re breaking your contract and tethering your phone to your computer. Where’s Walter Duranty to tell us that China’s networks are open and free, though?

Senate Democrats Harry Reid, Chuck Schumer, Frank Lautenberg, and Tom Udall are using government to attempt to blackmail Apple into censoring the App Store to remove apps that provide private oversight over police activity, just because they can be used by people who choose to drive drunk. DUI checkpoints are a serious matter of debatable Constitutionality, and oversight of them should not be waved away with threats from Senators, I say.

I do think we need copyright reform, but I’m not sure I think I want Google to be able to declare a copyright to be ‘orphaned’ just because it can’t easily acquire a license to a book. If we want to fix copyrights, let’s reduce their length to something sensible, rather than selectively let copyrights expire early for the little guy, while letting then run practically forever for large businesses. That’s exactly backwards from how we should be encouraging innovation.

When I first heard that RSA Security, Inc. was broken into, with information about its SecurID authentication system compromised, I shrugged. My assumption was that if the system is designed well, then it shouldn’t matter. However people keep talking about it, including Bruce Schneier, who wrote the book on cryptography. So I’m beginning to wonder if the SecurID has serious issues, and users of it need to seek alternatives. As Schneier puts it: “RSA Data Security, Inc. is probably pretty screwed if SecurID is compromised.”

And finally, I’m down to my final Firefox window of the night, after going through a record 17 stories (plus more in research as I wrote) to create tonight’s Tech at Night. I think the sun’s even coming up soon in the east as I finish this! Anyway, Big Government continues to hammer on the unfair, un-Constitutional, economy-hurting Amazon Tax proposal to attempt to apply our Sales Tax to firms in other states. Renaming it to a Use Tax doesn’t change the facts, people. Two more firms are exposed as being hypocritical on the plan: Macy’s and Saks Fifth Avenue.

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