AT&T Admits That The Whole 'Spectrum Crunch' Argument It Made For Why It Needed T-Mobile Wasn't True

from the well,-implicity dept

Fri, Nov 9th 2012 1:56pm — Mike Masnick

You may recall that back when AT&T was trying to buy T-Mobile, a big part of the argument was a spectrum crunch around its wireless efforts. The company insisted -- strenuously -- that it would not be able to expand 4G LTE services to more than 80% of the population unless it had T-Mobile. That argument ran into some trouble when a lawyer accidentally posted some documents to the FCC which admitted that the company could fairly easily expand its coverage to 97% of the population of the US without T-Mobile (and, in fact, that it would cost about 10% of what buying T-Mobile would cost). Suddenly, the argument that it absolutely needed T-Mobile rang hollow -- even as the company continued to insist exactly that. Still, the FCC suddenly was skeptical and AT&T, seeing the writing on the wall, gave up on the merger.

So, it probably shouldn't have been seen as much of a surprise that just 11 months after the T-Mobile deal fell through, AT&T has announced plans to expand its LTE footprint to cover 97% of the population of the US. In other words, the internal document was exactly correct, and AT&T's public claims? Hogwash.

Even the mainstream news media is now mocking AT&T's obviously bogus claims during the merger fight. AT&T's response to this is to claim that it "chartered a new direction," doing something like 40 new deals for spectrum. However, as Broadband Reports notes, all of this seems to make clear that there is no spectrum crunch -- that's just a bogeyman story that the telcos tell the government when they want a handout. In fact, AT&T is now saying publicly that there is no spectrum crunch. It has more than enough.

Speaking to analysts, AT&T's chief strategy officer John Stankey yesterday acknowledged the company is now well-positioned on the spectrum front -- even before the company starts moving on their new plan to use WCS spectrum for LTE deployment.

"Even under ideal circumstances, getting new spectrum on the market in the next five to seven years is aggressive," Stankey said. "But what we do know is that AT&T is well-positioned now...These deals give us confidence that we can meet our LTE objectives for next two years and they will allow us to deliver competitive performance."

Of course, I'm sure the next time AT&T needs something from the government, or wants to wipe a competitor off the map, we'll be right back to that story about how they're in desperate need of spectrum.

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Filed Under: 4g, mobile, spectrum, spectrum crunch, wireless
Companies: at&t, t-mobile

32 Comments

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Mason Wheeler, 9 Nov 2012 @ 2:00pm

I don't suppose the circumstances under which they insisted that are such that charges of perjury would be in order?
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Anonymous Coward, 9 Nov 2012 @ 2:26pm

It begins to look as if the data caps put in place by AT&T may also be more of that same hogwash, eh?

More like it needed another reason to squeeze income out of it's customers.
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John Fenderson (profile), 9 Nov 2012 @ 3:01pm

Re:
It doesn't begin to look that way. It's always looked that way.
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Shadow Dragon (profile), 9 Nov 2012 @ 3:30pm

Tine to Break up AT&T
I think it's time for AT&T to be broken up again.
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Anonymous Coward, 9 Nov 2012 @ 7:42pm

Re: Tine to Break up AT&T
with a fork eh?
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The eejit (profile), 10 Nov 2012 @ 1:08am

Re:
AT&T have been full of shit about telecoms for about...oh, 20 years?

More importantly, why have the executives ofg the time not been arrested for fraud and extortion?

Oh, wait, that ould be the right thing to do.
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Tom French, 10 Nov 2012 @ 6:34am

Would you do better?
It is easy for us as readers to say that we wouldn't do anything like that to increase our business but in reality most people would do the same thing. Do you honestly think that any company would not have stressed the same reasons for wanting to do a merger to justify their desire even though it would not be true? If this surprises you then you are in for a rude awakening.
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bbandeveywheuh, 10 Nov 2012 @ 7:01am

AT&T in the fabrication biz
The much-ballyhooed spectrum auctions (taking TV spectrum mainly)are one more way the govt. is looking for a handout to AT&T, Comcast and Verizon. By removing TV spectrum that can be operated in a cellular approach and readying it for auction the FCC has removed a competitor to the incumbents. Our country isn't becoming more democratic, it is slowly slipping towards outright socialism, with only a few select government-sponsored vendors allowed to operate.
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JohnParry, 10 Nov 2012 @ 8:56am

"...that it would not be able to expand 4G LTE services to more than 80% of the population unless it had T-Mobile..."

Author, hmmm? Are you sure? When did AT&T say this? Can you provide a source reference?
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vegetaman (profile), 10 Nov 2012 @ 9:48am

Re:
Corporations are people. Except, when you know, shit that would ruin the average person wouldn't be convenient if they were held to the same standard.
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The eejit (profile), 10 Nov 2012 @ 9:48am

Re: Re: Tine to Break up AT&T
Well, with a pocket nuke, but that's offensive to nuclear warheads.
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tqk (profile), 10 Nov 2012 @ 10:49am

Re: Would you do better?
Do you honestly think that any company would not have stressed the same reasons for wanting to do a merger to justify their desire even though it would not be true?

Remind me never to send any business your way. Yes, I do believe the majority of businesses (especially small businesses) out there do still know what honesty, honour, integrity, ethics and morality are and they take them seriously, because their reputations rely on it. Outright lies and "Reality Distortion Fields" may be de riguere for the Wunderkind silicon based megacorps of the late 20th and early 21st centuries, but that's not most of us. We're generally not psychopaths.

Eg., IBM applies for and gets a huge number of patents on its tech every year; close to the top performer I believe. They don't go Thermonuclear on their competitors like Apple's chosen to do recently.

I'm not much of a fan of the FCC especially considering the dismal state of telecom extant in the US today (monopolies, and consumer choice bedamned!), but at least they weren't stupid enough to fall for this bit of BS from AT&T.
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Richard Bennett (profile), 10 Nov 2012 @ 12:09pm

Not exactly
The man said "we can meet our LTE objectives for next two years." The National Broadband Plan said the spectrum crunch is five to ten year problem.

The spectrum crunch is real, and metered pricing is one reaction to it. If you like metered pricing, keep on ignoring the realities of spectrum and you'll find a lot more fun stuff to complain about.
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Derek Kerton (profile), 10 Nov 2012 @ 5:36pm

Re: AT&T in the fabrication biz
The argument you made does not imply socialism. Check a dictionary. Compare socialism and fascism. Although I think we're heading towards neither, you would benefit form a recap.
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Anonymous Coward, 11 Nov 2012 @ 3:37am

The free market theory says this can't happen therefore it didn't happen and this article is a fake...
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Tex Arcana (profile), 12 Nov 2012 @ 11:22am

Re:
Oh, it was purely a move to create a functional monopoly.

1) Buy tmobile.
2) Wreck customer base.
3) Take over towers.
4)Cover 99% of US.
5) Jack rates thru the roof.
6) ...
7) PROFIT!!

...well, the execs will profit. AT&T will cut jobs and pay, and turn their network into a world laughingstock while said execs escape to Angola with their fat bonuses and sold stock options.
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Tex Arcana (profile), 12 Nov 2012 @ 11:22am

Re: Re:
http://i.imgur.com/ahGFK.jpg
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Richard Bennett (profile), 12 Nov 2012 @ 11:53am

Evil capitalists
And while AT&T-Mobile is jacking rates through the roof, Verizon, Sprint, MetroPCS and Cricket just sit back and watch?

I wish my world were as simple as yours.
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Tex Arcana (profile), 12 Nov 2012 @ 12:27pm

Re: Evil capitalists
Your world is simple, if you believe in the "altruism" of corporate execs.

OF COURSE THEY'LL JACK THEIR RATES TOO!! Haven't you realized that most "execs" are just a bunch of "monkey-sees, monkey-do's" that don't have a single brain cell in their overinflated egoistic crania??

In other words: they're drunk, dumb, and retarded (sorry, mentally-disabled people); and they're functionally incapable of anything but shoving a shiv into your back to steal your last crust of bread.

And people wonder why we need government regulation in our lives!!
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Richard Bennett (profile), 12 Nov 2012 @ 12:32pm

Re: Re: Evil capitalists
Ah yes, how can I be so retarded?
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John Fenderson (profile), 12 Nov 2012 @ 2:29pm

Re: Re: Re: Evil capitalists
While I disagree with the tone of Tex's post, I think his fundamental point is correct: they'll raise their rates too. That's in line with their historical behavior.
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John Fenderson (profile), 12 Nov 2012 @ 2:35pm

Re: Not exactly
Here's the problem. While spectrum is indeed finite, the telecoms have clearly been grossly exaggerating the issue for their own benefit. So it's hardly unreasonable to look at anything they say with a jaundiced eye. Invoking the National Broadband Plan isn't on point, as that's still just the telecoms talking.

As you say, metered pricing is one reaction to it -- one one that's being actively used in a very deceptive way to soak us all to the greatest degree possible.

Why should we just knuckle under and submit to more of the same? Should we not seek a solution that is less susceptible to shenanigans?
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Richard Bennett (profile), 12 Nov 2012 @ 2:43pm

Re: Re: Re: Re: Evil capitalists
So you believe that AT&T's reaction to losing customers to Verizon would be to raise their rates? Remind me not to ask you for stock tips.
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Richard Bennett (profile), 12 Nov 2012 @ 2:57pm

Re: Re: Not exactly
Actually, no, they're not exaggerating and neither is the FCC, who declared a looming spectrum crunch in the National Broadband Plan.

To get to the higher data rates supported by LTE and LTE Advanced, the carriers need more spectrum. Instead of 5 and 10 MHz channels, they need 20 MHz or better. This isn't carrier fiction, the same dynamic exists in Wi-Fi: To get to 802.11n's maximum speeds, it needs to use 40 Mhz channels instead of old school 20 MHz channels, and to get to 802.11ac's peak rates it needs an 80 MHz channel.

Do you see a pattern here?

Whining about carrier behavior is sometimes warranted, but the ability to bring the snark isn't a substitute for real technical knowledge or for exceptional policy wisdom, it's simply lame link-whoring.
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John Fenderson (profile), 12 Nov 2012 @ 4:43pm

Re: Re: Re: Re: Re: Evil capitalists
No I think that Verizon's reaction to AT&T raising rates is to raise their rates as well. I think it's just obvious, as this is what the behavior has been in the past. Why would it be different now?

There isn't a lot of price variation amongst the cell carriers. There is a lot of variation in the exact form the various plans take, but that confusion is design to give the appearance of lower rates compared to the competition without actually giving lower rates.
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John Fenderson (profile), 12 Nov 2012 @ 4:46pm

Re: Re: Re: Not exactly
I know exactly what you're saying here, but how does any of that dispute what I said?
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Richard Bennett (profile), 12 Nov 2012 @ 8:20pm

Re: Re: Re: Re: Re: Re: Evil capitalists
I asked what AT&T's reaction would be to losing customers, not Verizon's reaction to gaining them.
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Richard Bennett (profile), 12 Nov 2012 @ 8:22pm

Re: Re: Re: Re: Not exactly
You said "the telecoms have clearly been grossly exaggerating the issue" yet the facts say that there's a general tendency for wireless technologies to consume more spectrum, most dramatically in the unlicensed sphere but in licensed as well.

How does that work with your conspiracy theory about telco exaggeration?
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Tex Arcana (profile), 13 Nov 2012 @ 9:05pm

Re: Re: Re: Re: Re: Re: Re: Evil capitalists
You really think its "open competition"??

They all collude and fix rates.

It's just business, in the name of profits. Who cares about those lousy pesky custo:tard:s??
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Tex Arcana (profile), 13 Nov 2012 @ 9:08pm

Re: Re: Re: Re: Re: Not exactly
I think you're a telco shill. So there. :-p
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Richard Bennett (profile), 14 Nov 2012 @ 8:07am

Re: Re: Re: Re: Re: Re: Re: Re: Evil capitalists
More customers = more profits
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Richard Bennett (profile), 14 Nov 2012 @ 8:09am

Re: Re: Re: Re: Re: Re: Not exactly
Don't be such a poopy head, Mitt.
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