Can I Supersize My Minutes?

Posted by: AT&T Blog Team on July 13, 2010 at 11:01 am

Authored by Kimberly Darrin, AT&T Director of Public Policy

I grew up in the ‘80s asking, “Where’s the beef?”.  It’s probably not much of a surprise then that fast food is top on my list when I stop to consider what other industries have been as creative in appealing to the needs and wants of the American consumer as the wireless industry.  Bringing consumers value for their dollar is the name of the game when companies are allowed to compete.

In evaluating whether effective competition exists in the wireless industry for its 14th Annual Report, the FCC looked in part to price rivalry.  Wireless carriers compete on many levels to attract and retain satisfied customers, but appealing to consumers’ pocketbooks is one of the more tangible and surefire ways to ensure success.  Case in point: the dollar menu.

Back in 1998, AT&T revolutionized wireless pricing plans by introducing the Digital One Rate (DOR), which offered consumers national calling plans with no roaming charges and no separate long distance fees.  When you come up with a good idea, your competitors follow.  Offer customers the option to “supersize” their meal and don’t be surprised when you see a competitor offer a “biggie” or better yet, a “great biggie.”

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The FCC’s Hypothetical Supreme Court

Posted by: Hank Hultquist on July 7, 2010 at 10:43 am

Justice Scalia’s dissents are often described as “witty,” “erudite,” and even “brilliant.” In fact, they are so good that they’ve been collected into a book that gets almost all 5-star reviews on Amazon. Dissenting opinions sometimes do become the basis for a change of direction by the Court, but I’m pretty sure that no Federal agency has ever before reversed itself relying on the dissenting opinion in a Supreme Court decision that upheld the agency’s current historical interpretation of the law — which is what the FCC is proposing to do in the Third Way NOI.

This somewhat novel strategy does carry a high degree of difficulty. It may turn out to be the legal equivalent of a reverse two-and-a-half with a one-half twist from the pike position.  While part of me wants to applaud the FCC’s bravado, I think they’re likely to be headed for a belly flop.

As far as I can tell, the FCC’s theory appears to be based on a hypothetical in which the majority (hypothetically) would have agreed with the legal premise of Justice Scalia’s dissent in which cable modem service consisted of two separate offers, one an information service and the other a telecommunications service. This theory ignores the fact the Supreme Court would have had to address the long-standing doctrine of “mutual exclusivity,” under which a service is classified as either an information service or a telecommunications service. The mutual exclusivity doctrine was described to the Supreme Court by the FCC and the Department of Justice as “supported by the 1996 Act’s legislative history and by decades of administrative practice, including the FCC contemporaneous construction of the 1996 Act.” The FCC’s theory about how the Supreme Court majority might have addressed the hypothetical is not a serious basis for reversing course.

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Entering a New Phase Of Ridiculous

Posted by: Jim Cicconi on July 2, 2010 at 5:29 pm

The other day FCC Commissioner Mignon Clyburn challenged participants in the debate over net neutrality and reclassification to cool down their rhetoric.  The same day, Free Press launched a website accusing telecom and cable companies of “corruption.”  This has followed weeks of screeching rhetoric accusing the FCC Chairman of essentially the same thing – simply because his staff has dared to meet with a group of people trying to resolve these issues, one of whom counts Free Press and Media Access Project as members.

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Regulating for the Sake of Regulation

Posted by: Bob Quinn on July 2, 2010 at 9:16 am

I was struck over the last several days by a series of pronouncements coming out of the Commission. First, on Tuesday, June 22, the FCC released an Order denying Qwest’s request for forbearance from wholesale and retail regulations in the Phoenix MSA.  Then, on Friday, June 25, the Commission released the latest version of its mislabeled “Local Telephone Competition Report.”   I say mislabeled because the Report actually includes only wireline services in calculating its Local Competition numbers (to be sure, there are tables that include fixed wireless and CMRS statistics, but those figures are buried in the Report and are not included in the Local Competition analysis).

Taken together, these two reports demonstrate all that is wrong with the analysis going on over at the Commission and how it is counter-productive to the goals of the National Broadband Plan. I am going to take these releases in reverse order. With respect to the Local Competition Report, I was surprised that even with the skewed way the FCC looks at Local Competition (by excluding wireless), the nationwide Incumbent local telephone provider (voice) market share had fallen to 73% (Local Telephone Competition Report, Table 1).   Now standing alone that number — 73% — isn’t remarkable, but when you start doing some number crunching including the wireless substitution data ignored by the Commission, you really start to understand why the focus of the National Broadband Plan is on finding ways to incent – and remove barriers to – investment in infrastructure, particularly wireline infrastructure.

In Qwest, the Commission cited a December 2009 Federal Report (the “2010 Center for Disease Control Wireless Substitution Report“) which concluded almost 25% of consumers had “cut the cord,” meaning the consumer only has a mobile voice service.  And that makes sense given the data in the FCC’s Local Competition Report which shows that the number of residential wireline voice connections in the last nine years has declined from just over 143 million in December 1998 to about 97.4 million in December 2008 (Table 2).

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Whispering Voices
In the Field of Dreams

Posted by: Frank Simone on June 29, 2010 at 4:59 pm

In the movie Field of Dreams, Ray Kinsella (Kevin Costner) hears a voice tell him, “If you build it he will come.” What does this have to do with telecom policy you ask? Everything. Carriers build communications infrastructure in much the same way – without the whispering voices at night of course. Facilities-based providers are forward looking — investing and deploying so consumers and businesses will come and enjoy the next generation services.

And today’s explosion of data traffic, especially in the wireless market, gives facilities-based providers every incentive to peer into the future and invest to keep up with demand. Infrastructure investing today means deploying fiber or other advanced high capacity technologies as closely as possible to residences and businesses to unlock high bandwidth services.  The Field of Dreams for policymakers is where multiple providers make those infrastructure investments to provide business and residential consumers not only with needed capacity, but also with competitive choices.

Which brings me to the wonkish issue of special access.

As a part of our merger with BellSouth, we voluntarily agreed to offer temporary, but significant reductions on our interstate special access services (purchased primarily by businesses).  After 3 ½ years, that merger commitment expires tomorrow, June 30th. These rates will then revert to our original tarriffed rates.

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