Posted by: Joan Marsh on May 17, 2011 at 3:28 pm
A lot of myths were perpetuated by some witnesses at the Senate Judiciary Committee Hearing last Wednesday regarding our proposed acquisition of T-Mobile. The enemy of myth is, of course, fact, and over the next several days, we will debunk these myths in a series of blogs. So, stay tuned.
To start, I want to address Public Knowledge’s argument that AT&T should “stop operating” three different types of technologies, a system which they view as “inefficient” and spectrally “wasteful.” Let’s play that out and see precisely what that world looks like.
First, AT&T would promptly shut down its 2G GSM network – a network that currently supports tens of millions of devices, including handsets for our pre-paid products that are particularly important to fixed and low income customers. As a result, all those handsets would go dark and that customer base would be required to go purchase new mobile broadband (UMTS) handsets, which are generally more expensive.
We would also strand all our wholesale partners that are buying capacity on our GSM platform, and who in turn offer competitive retail products. In short, the results would be devastating for millions of wireless consumers. Public Knowledge would likely be one of the first to complain, with a press release along these lines: “Public Knowledge demands FCC inquiry into AT&T’s attempts to undermine wholesale competition and raise prices for consumers.”
We shouldn’t be operating three networks, according to Public Knowledge, but would they then also have us “stop operating” one of our other two platforms? This would present a real dilemma. Presumably, we would have to continue operating our current mobile broadband platform, as that’s where all our 2G GSM customers would be forcibly migrated. Does that mean we would have to stop our deployment of next generation 4G LTE technologies? In the name of efficiency, should we maintain only status quo technologies and forego deployment of a faster, more robust and more spectrally efficient LTE network? How is that in the public interest?
Or perhaps they would have us deploy LTE technologies and, as markets are turned up, promptly turn down our current mobile broadband network. Granted, that approach would free up the spectrum that currently supports our UMTS/HSPA deployments. But again, tens of millions of mobile broadband enabled smartphones, tablets and laptops (not to mention smart meters, digital picture frames and health monitoring devices) would go dark. The hard fact is that in the first few years of any new technology deployment, only a small percentage of our customer base purchases new devices compatible with the new technology platform. It takes years for a substantial migration to be complete.
As our Chairman explained last Wednesday, there needs to be an elegant transition from one technology to another. You cannot simply flip a switch and move millions of customers to a completely different network. The transition from analog to digital is instructive. Even after the FCC officially established a five-year sunset period for analog service, we approached the sunset date with more than a million customers who still had not upgraded their phones to a digitally-compatible device.
So, what about that brand new android tablet you just purchased? Forget about it. Relegate it to the dust bin and go purchase a new LTE-enabled device. I’ll leave it to Public Knowledge to explain to you why that approach is pro-consumer.