Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
I know Christmas is still a few weeks away, but the past few days have been like a mini-Christmas surprise for me as each morning as I seem to awake to a new, juicy wrinkle in AT&T’s ongoing attempt to acquire T-Mobile USA.
This week was especially juicy as the gloves came off and the fur flew with a war of words erupting between AT&T and the FCC. Nothing like two powerful acronyms going at it.
Trust me. I enjoy this sort of catfight as much as the next heathen. And when it involves one of the world’s most renowned companies and the U.S. government, well, that’s just even more special.
As for what was said in this tussle, I am sure some of it was legitimate, some of it was ridiculous and all of it was biased, but in the end all that matters is that the proceedings resulted in what I am assume are grown-ups acting like 7-year-olds.
While not really wanting to get too deep into the debate or to seem like I am picking a side — because truthfully, I just want this spat to continue for as long as possible — I will say that reading some of the arguments did result in significant eye-rolling that almost cost me my sight.
One point of the to-and-fro in particular caught my rolling eyes, which was that many of AT&T’s rebuttals to the FCC order seem to come from a place of make-believe where its largest rival — you know … Verizon Wireless — does not seem to exist.
For example:
In one statement, AT&T claims that the FCC’s notion that the carrier will build out its LTE coverage to remain competitive in the space is wrong as the carrier has only so far committed to building out LTE to about 80% of the nation’s population. This could be true and would seem to be something a carrier would want to say if it was looking to acquire a rival. However, does anyone in their right — or left — mind think that AT&T is going to stop at 80% coverage of LTE with Verizon Wireless stating it will cover its complete CDMA network with LTE by the end of 2013?
Of course not. And for AT&T to think that a decision that says it “might not” do something is the same as saying it “will never, ever, ever, ever, ever” do something is downright ridiculous.
There was also a comment from AT&T that T-Mobile USA has no clear path to launching LTE services and thus will not be able to keep up with the explosion in data demand. While it might be true that T-Mobile USA currently does not have sufficient spectrum resources to launch LTE services without some serious refarming, which is possible, there are any number of alternatives out there for spectrum sharing or the wholesaling of capacity on LTE networks that would provide T-Mobile USA with a path to offering LTE services. Clearwire anyone? (I will leave LightSquared out of this for now as that soap opera is just good on its own.)
Also, should this AT&T/T-Mobile USA deal fall apart, wouldn’t T-Mobile USA find itself with a fresh batch of 1.7/2.1 GHz spectrum on its lap courtesy of AT&T’s bravado in thinking this deal was a slam dunk? Couldn’t that spectrum be used to launch LTE?
This is not to say that all the points the FCC made were of this dimension. But more importantly, it seemed that the tone of the FCC comments were below what one would expect of a government agency. Not that I am against what is supposed to be an upstanding, making-a-good-example-for-the-children organization going all Judd Apatow on us, but it does seem to take away from the legitimacy of their claims.
Plus, isn’t all that is keeping T-Mobile USA from being competitive in the wireless space just being able to offer the iPhone? The evil side of me has come to think that T-Mobile USA’s inability to offer the iPhone has to be somewhat tied to AT&T’s wishes and that a worse-case scenario for AT&T would be T-Mobile USA’s aggressive pricing plans attached to that iconic device.
Heck, T-Mobile USA has already said there are millions of iPhones already running on its network despite the inability for those devices to access cellular 3G connections.
This line of dark reasoning has me coming to the conclusion that AT&T does not really care that much about T-Mobile USA’s assets in this acquisition attempt but rather that AT&T just want’s T-Mobile USA to go away.
But why? What did T-Mobile USA ever do wrong to AT&T? Is AT&T jealous that T-Mobile USA has always had more eye-friendly spokespeople that consumers just can’t help but warm to, while AT&T is still seen by many as the oldest of old school in corporate America?
Regardless of all this bickering, I am still unsure on how this whole mess will end, though I hope it won’t anytime soon. While it looks like AT&T’s arguments for the deal are getting thinner and thinner, I am still not willing to bet against a company with AT&T’s resources. I just can’t imagine a company of that size would get itself this deep into a deal without knowing it could pull it off.
AT&T has said it will continue pushing for the deal, which some have said could now take well into the second half of next year. This is an obvious stance for the carrier as it has invested too much into pushing for this deal to just back out of it.
There were also comments that by prolonging the ordeal AT&T could be pushing to have the deal drag out into the upcoming presidential election where the company’s vast lobbying power could become a bigger part of the equation or even into a possible changing of the administration into one that is more “friendly” to the deal.
In the meantime, T-Mobile USA will continue swinging in the breeze as a carrier that may or may not be around 12 months from now. This is probably not a good thing for customer acquisition activities as even though customers will not be left high and dry if T-Mobile USA is eventually acquired, there is that uncertainty of what the future will hold that could keep customers from signing contract service with the carrier.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–Speaking of the AT&T/T-Mobile USA deal, there has been untold news releases bombarding my inbox over the past week or so from those opposed to the deal crowing about how these recent decisions show that the deal has no chance to be approved.
However, special props go to the folks at the Rural Telecommunications Group for getting the “lipstick on a pig” analogy into their news release. And I quote:
“No amount of lipstick on this pig of a deal is going to change the fact that AT&T has been trying to eliminate a robust competitor,” said Carri Bennet, RTG’s General Counsel in the organization’s press release.
Sure, that analogy is super obvious and tired, but it’s still good to see someone pull it out.
–One final note on all this M&A nonsense. Where was all this concern a few years ago when Sprint was trying to acquire Nextel? I don’t mean concern as in people trying to stop the deal as it might diminish competition in the mobile space, but rather concern for the well-being of Sprint in trying to acquire a carrier that it had no business trying to acquire?
That is something we are all going to have to live with.
I welcome your comments. Please send me an email at dmeyer@rcrwireless.com.
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