Protect the free market! Block AT&T!

The government is soon going to authorize the sale of some more of our mobile phone spectrum.

Should the goal of the auction be:

(1) Get as much as possible from that auction, regardless of who buys the spectrum?
(2) Manage the sale for the long term good of consumers?
(3) Get government off the back of god-fearing, job-creating businessmen?

Okay, okay, you're right. It was a trick question.

Next month, bills will be introduced in Congress that may include language that allows the FCC to structure who can bid on the spectrum. The "Government is bad! Always bad!" crowd will of course scream "Freedom! Let capitalism work!"

Except we know that market capitalism can harm market capitalism. Where limited resources are concerned, like oil or railroads or tobacco in the 19th century when the Sherman Anti-trust act was enforced, sometimes the government has to protect market capitalism from itself.

In the 1890s, the Rockefellers crushed many companies and put many people out of work with their money. The same threat exists today. We need competition in the mobile phone industry and there is national interest in seeing that competition can flourish.

Fighting monopoly is fighting for free market. Fighting concentration of power is fighting for small businesses and is pro-business.

This is even more true of the mobile industry than it was with oil. This is our spectrum. And if We, The People decide to foster competition and protect free markets by selling that spectrum to competitors of AT&T and Verizon, that is advocating for the free market, it is not "socialism," despite what the fear mongers on the right, the pro-monopolists and their lackeys like Rep. Greg Walden, would have you believe.

Promoting free enterprise in this case means potentially limiting who can bid on the spectrum and potentially taking a loss in the short run so that competition can, in the long run, keep prices competitive.

(By the way, I almost included the Boston Tea Party as an example. I'll submit, just for the joy of it, that the East India Company was in collusion with the British Crown. It was their tea! That's the history of influence of business on government. If the "Tea Party" wanted to be true to its namesake, it would join the Occupy Wall Street folks and demand that corporate scofflaws go to jail.

Big pharma, Goldman Sachs, the insurers, those are the East India Company of today. Don't tread on me!

At some point, some smart grad student at Berkeley or Stanford or the University of Chicago or Wharton will do a study on the minimum number of competitors required for a market to remain healthy, and how barriers to entry into that market affect that number.

My theory is that markets with higher barriers to entry require more existing competitors to be healthy, because companies outside a market that see the attractive profits will find it more difficult get in.

I will join the right wing in saying the Supreme Court has failed America. The overturning of campaign finance laws was to allow the East India Company to marry into the royal family. Talk about protecting an institution from incest! )

More falsehoods from AT&T

AT&T does not like the report from the Federal Communications Commission on its takeover of T-Mobile. They don't like that the report was released. Surprise.

So they trot out a smart man to try to cast doubt. Let's look at what he had to say.

"The document is so obviously one-sided that any fair-minded person reading it is left with the clear impression that it is an advocacy piece, and not a considered analysis," Jim Cicconi, AT&T's senior vice president of external and legislative affairs, wrote in a blog post.

Actually, no. The report simply states reasons why FCC staff do not support the merger. The "analysis" is elsewhere. For nine months AT&T filled the atmosphere with falsehoods about how "what's good for AT&T is good for America." FCC disagreed, and said why. That's all.

AT&T claimed acquiring T-Mobile would help the rollout of its 4G LTE network. The FCC agreed with AT&T rivals who argued that AT&T is going to build out its 4G network with or without T-Mobile because of competition. Cicconi denied that, pointing to "sworn declarations" about its 4G LTE plans.

Oh, please. "Sworn declarations?" And we should wait for AT&T to say "Oh, that sworn declaration? Yeah, about that, well, our plans have changed." That's what always happens when the consequences for lying are less than the benefits. Guess we'll see if AT&T will let Verizon be the only company with a nationwide 4G network.

"The report apparently assumes a high enough level of competition exists in rural areas to compel billions of dollars in investment," Cicconi wrote. "Yet the report elsewhere argues that the level of wireless competition in more populated areas of America is so fragile that the merger must be disallowed. At the very least, these conclusions show a logical inconsistency."

Mr. Cicconi is a smart man. So he must be a lawyer to use the word "competition," which means different things in different situations, and claim it only means one thing and the FCC is being inconsistent.

There is nothing inconsistent in saying AT&T will roll out 4G in rural areas with or without T-Mobile, and loss of competition in 99 out of 100 urban markets (where the money is) would be bad for consumers. This is just a tricky trap of language, common to a certain political class.

The FCC says the deal will kill jobs, Cicconi says AT&T has "promised" to create jobs. No. AT&T was going to recoup the $39 billion it was willing to spend on T-Mobile instead of spending $4 billion to build out its own LTE by cutting jobs and raising prices, which it will be able to do in a duopoly with Verizon across most of America. Somewhere there is a document that shows that, an email, meeting notes. Let's find it and send perjurers to jail.

Cicconi says the FCC is hypocritical in saying there is a national spectrum shortage but saying two national companies face "no such constraints." He thinks we're stupid.

Yes, more spectrum is needed for new phone technology for the public good. But the public, as a whole, does not benefit from one company gobbling the spectrum of another. If you agree with his argument, walk into the coffee shop with a dollar in in your right pocket, move it to your left, tell the server you have a dollar in each pocket for a $1.50 cup of coffee, and, of course, you plan to leave a 50¢ tip.

Cicconi says the report lacks credibility, and distorts the facts. We think the report was a good summation of reasons why the merger should not go through, and Cicconi's response validates that conclusion.

AT&T's lies for all to see

How wonderful this last week to see the U.S. Department of Justice and Federal Communications Commission protecting markets, small businesses and consumers from a rapaciously hungry corporate monster.

Even "The Economist" magazine, hardly a liberal rag, opposed the AT&T takeover of T-Mobile.

AT&T's discomfort at the release of the FCC staff report on the merger is understandable, and wrong. That is OUR government staff, that is OUR report, transparency is GOOD, the people have A RIGHT TO KNOW. The company wasn't opposed to putting its falsehoods out there during the process. It's blatant hypocrisy to affect outrage when the government releases its findings.

In fact, ALL the documents of the proposed merger should be released. They were filed with a public body to get something from the public. We should be able to see them. Distortions and other bad things, like AT&T, grow in the mouldering dark.

Anyone who watched the AT&T CEO in action before Congress, read the canned pro-merger crap AT&T regional presidents planted in newspapers around the nation (it all reads the same!), watched the callously manipulated spectacle of gay and lesbian organizations, Latino advocacy groups, Black community leaders giving pay back by advocating outside their interest, watched AT&T lawyers preen with false outrage, read anything about this corporation or even just dealt with an indifferent AT&T representative after the company attempted to rip them off, knows that AT&T is a company without a soul.

Yeah, yeah, we get there are people working for AT&T who have souls. So far. Leave it alone.

AT&T will eat whatever it can until gorged and then eat some more, the only thing stopping it something larger.

Which is why we have laws against monopolies, why AT&T had to be broken up once before, and why this last couple weeks of courage on the part of the justice department and FCC is only the beginning. AT&T has already said, somewhat ominously, they will pursue "alternate means" to get what they want.

One day, see the ancient James Coburn movie, "The President's Analyst."

At&T's representative from Oregon, Greg Walden, a man corrupted by campaign contributions and who knows what other spores AT&T may have planted in his brain, must be sweating bullets. He will now have to work harder for his host, and risks even greater exposure.

Greg Walden for Sale

Rep. Greg Walden is a representative for ATT. The telephone companies have bought themselves a congressman from Oregon.

Walden, Republican Representative for Oregon's second district, signed a letter designed to fire a shot across the bow of the United States Department of Justice for suing to block ATTs purchase of T-Mobile. Read more here.

The DOJ fears ATT's acquisition of T-Mobile would harm competition.

Walden isn't willing to let the DOJ lawsuit play out in courts. He wants to haul the DOJ and Federal Communications Commission before congressional staffers to explain “the extent to which each agency has been considering the impact on jobs and economic growth.”

How absurd. Should the DOJ also justify the extent to which they considered the impact on plate tectonics, or global warming? The issue is competition and the long term harm to the markets and consumers if ATT gobbles up the only other national GSM wireless provider.

Walden is the top recipient of cash from the telecom services and equipment companies AND telephone utilities. Verizon, Qwest, Comcast, ATT, they LOVE Greg Walden. Read more about that here. They give him a lot of money, so he does them favors. It is that simple.

Walden's letter is just a ploy to threaten the DOJ and FCC, force them to face more work, more explanations. He wants to let them know that he might look hard at their funding if they don't buckle under. Because he wants to protect the source of his income.

Oregon, one of our congressmen is back in Washington, threatening the justice department for trying to protect the market from a duopoly (Verizon and ATT are the remnants of old Ma Bell), because he is in their pocket and owes them big.

Would you like to give him a call?


Rep Greg Walden
2182 Rayburn House Office Building
Washington, DC 20515
Main: 202-225-6730
Fax: 202-225-5774

Central Oregon office:
1051 NW Bond St., Suite 400
Bend, OR 97701
Main: 541-389-4408
Fax: 541-389-4452

Southern Oregon Office:
14 N. Central Ave., Suite 112
Medford, OR 97501
Main: 541-776-4646
Fax: 541-779-0204
Toll free: 800-533-3303

Eastern Oregon office:
1211 Washington Avenue
La Grande, OR 97850
Main: 541-624-2400
Fax: 541-624-2402

Verizon is complicit

In a story (read it here) on May 24, 2011 in the Wall Street Journal, under the headline "These Companies Hate the AT&T/T-Mobile Merger," it was noted by reporter Shira Ovide that Verizon, which would drop from largest to second largest wireless company after AT&T swallows T-Mobile, has not come out against the proposed merger.

Duh.

Ovide notes the Verizon CEO is saying only “We’re not going to get distracted by this.”

Ovide refers to analysts who opine that the reason for Verizon's calm reaction is that "Verizon Wireless ... could get a lift if AT&T strips low-cost rival T-Mobile from the market. At the same time, AT&T could be distracted for a year or more securing all the necessary government clearances for the deal, and then integrating T-Mobile into the fold. The lull might help Verizon poach subscribers from its biggest competitor."

Sometimes it is hard to believe what passes for journalism. Distracted? Please.

One would think that a reporter from the Wall Street Journal would understand the value of a duopoly (like a monopoly, but with two) to one of the duopolists. In other words, if AT&T becomes the only GSM wireless company, and is able to hammer suppliers and gouge consumers, then Verizon, as by far the largest of the CDMA wireless group, would also benefit. Even without direct collusion.

Markets require competition to work effectively. AT&T and Verizon are doing everything they can in the media, in Texas, and before the U.S. Senate to cloud the issues.

"We don't know if the market is best served by three or four carriers," burbles one wireless exec. "If we don't have more spectrum, ambulances will be unreachable," growls another from AT&T.

Nonsense. This merger is about AT&T sucking up spectrum now, dollars and dollars later, from a distortion of a market that rides on licenses to use airways owned … by… us.

We need more choices of which carrier to use, not fewer choices. We need three or four GSM carriers, and three or four CDMA carriers, for there to be a truly competitive "free" market. There is less competition if there are only three, if Sprint hobbles along as a distant 3rd, or two if Verizon sucks up Sprint.

Verizon is sanguine about the AT&T and T-Mobile merger because Verizon executives know that even as number two, they will still get a larger slice of porker pie than they do now, even if it is not the largest one on the table.

The U.S. government should protect consumers and small business and refuse to go along with this merger. Communication is the economy's lifeblood now more than ever. Republicans should live up to their ideals of doing what is good for business, and that does not mean just doing good for one of their largest political donors. Where the hell is the U.S. Chamber of Commerce?

AT&T was broken up once before. We should look at this power grab as a reason to consider doing it again.