Just months after the Department of Justice help thwart its plans to merge with AT&T and form the nation’s largest mobile phone company, T-Mobile recently urged the Federal Communications Commission to stop Verizon’s deal to acquire new airwave licenses from cable companies.
Though AT&T took tons of flack for its merger bid, all this commotion signals just now desperate wireless companies are to get more spectrum — the once publicly-owned, government-controlled airwaves that have been around for years and help fuel our new handheld gadgets. As more and more people clamor to get new smartphones and gadgets, the companies that provide those services — AT&T, Verizon, T-Mobile, Sprint, MetroPCS, to name the big ones — are beginning to get overwhelmed. To put it simply, the U.S. just doesn’t have the infrastructure to keep up with growing demand. All this talk of mergers is industry’s solution to that nagging problem.
From The Hill:
Verizon agreed to buy wireless airwave licenses, known as spectrum, for $3.6 billion from cable companies including Comcast and Time Warner in December. Under a separate deal announced simultaneously, Verizon and the cable companies agreed to cross-sell each other’s services.
…Kathleen Ham, T-Mobile’s vice president of federal regulatory affairs, told The Hill that the company’s opposition to the Verizon-cable deal is “completely consistent” with pursuing the merger with AT&T.
She said that both positions were driven by the need to acquire enough spectrum to power next-generation wireless technologies. The merger would have combined AT&T and T-Mobile’s spectrum holdings, while the Verizon deal will close off a chunk of the airwaves to T-Mobile.
I touched on this in my investigation from last year, “How Big Telecom Used Smartphones to Create a New Digital Divide.” The Obama administration has continually played the middle ground between industry and government — in this case, offering to sell valuable spectrum to companies in order to raise money for things like public benefits. To be sure, that’s an enormously important effort, and this stuff can be really complicated with no easy answers. But what can’t be overlooked is the fact that these airwaves were once publicly owned. The FCC has left open a huge regulatory hole wide open and not extended the same protections to wireline and wireless users. As I pointed out before:
In an increasingly digital world, the relative affordability of smart phones have made them the bridge across the the Internet’s long-discussed digital divide. Nearly a fifth—18 percent—of African American wireless subscribers use only their cell phones to get online, as do 16 percent of Latinos. Just 10 percent of whites say the same. While 33 percent of white subscribers use their cell phones to surf the Internet, 51 percent of Latinos and 46 percent of African Americans do.
Which means that while these companies fight over who gets to own what, users — many of them of color — are ultimately the ones who are left paying more for far less.