When Industry Canada announced it was planning to boost competition by setting aside certain spectrum for new competitors entering the wireless marketplace, the Conservative government promised Canadians they would see a new era of robust competition and lower prices as a result.

Today, it turns out the only competition around is watching which of the three largest wireless carriers snap up their newest competitors first.

Telus, Canada’s third largest wireless carrier, today announced it was acquiring Mobilicity for $380 million — almost exactly the amount of outstanding debt owed by the Data & Audio Visual Enterprises Holdings’ venture. That means Telus will pick up its competitor just by agreeing to pay its bills.

Mobilicity said it was burning through cash at an alarming rate and simply could not attract enough customers in its home service cities Toronto, Ottawa, Calgary, Edmonton and Vancouver, to become profitable. It also reportedly lacked financial resources to take part in a forthcoming spectrum auction that would have been critical to the company’s long-term survival.

Informal merger talks among the three largest independent carriers — Wind Mobile, Public Mobile, and Mobilicity — reportedly went nowhere.

“Mobilicity has been losing a significant amount of money every month,” Mobilicity’s chief restructuring officer, William Aziz, said today. “The financial strength of Telus will allow the business to be continued in a way that will benefit customers and employees. An acquisition by Telus is the best alternative for Mobilicity.”

But that may not be the best alternative for Canadians. Regulators are expected to scrutinize the merger and current rules do not allow Telus to acquire the spectrum Mobilicity holds until next year. But with few other expected buyers, regulators may have no choice but to allow the deal to go through.

If approved, Telus will pick up Mobilicity’s 250,000 customers and likely switch them to Koodo Mobile, its prepaid division.

Minister Paradis

Mobilicity customers could do worse. Koodo Mobile, given a “C” grade by Canadian consumers, was Canada’s highest rated wireless carrier. That disparity hints at how much Canadians loathe their current wireless options.

Bay Street investors were not surprised by the announced merger, believing competition has its limits in a marketplace dominated by three enormous telecom companies — Bell (BCE), Rogers, and Telus — all collectively holding more than a 90% share of the Canadian wireless market. Many expect the remaining independent providers to also jettison their businesses or combine them in a last stand.

Industry Minister Christian Paradis, the Conservative government’s point man on independent competition in the wireless market, was caught off guard by the apparent faltering of the new carriers.

Paradis said he remains committed to making sure Canadians have a fourth choice for wireless service in every regional market in the country. But his only assured success is in Québec, where Vidéotron — the provincial cable company — competes with the big three providers. That competition has worked in that province to hold pricing down. According to The Globe & Mail, the average monthly bill in Québec dropped to $50.36 a month in 2011 from its peak in 2009 and is on par with where it stood in 2007. In comparison, according to CBC News, the average monthly wireless bill across Canada was $77 in 2013, up from $68 in last year’s survey.

Paradis is now pondering new regulations that would prevent the three largest carriers from buying out the remaining two independent providers just for their spectrum assets.

The merger will need regulatory approval from The Competition Bureau, Industry Canada, and the Canadian Radio-television and Telecommunications Commission.

BNN reported back in April that Telus and Mobilicity were in acquisition talks. The news channel speaks with Maher Yaghi from Desjardins Securities about the implications the merger would have on the Canadian cell phone market and the prices consumers pay. (5 minutes)

http://www.phillipdampier.com/video/BNN Telus Acquiring Mobilicity 5-16-13.flv

BNN this morning reported the ball is back in Ottawa’s hands as the government tries to decide how it can salvage its wireless competition agenda. (6 minutes)

Other stories of interest:

1. Canada’s Independent Wireless Providers Capitulate With “For Sale” Signs; Telus Interested
2. Industry Minister Holds Closed Door Meetings With Big Telecoms And You’re Not Invited
3. Independent Cell Providers Resign from Canadian Wireless Telecom Association
4. Bell: If You Don’t Sell Us the Frequencies, We’ll See That Rural Canada Gets Nothing
5. Rogers Launches Astroturf Campaign to Recruit Customers to Lobby For Spectrum… for Rogers

Wireless Industry: We’re running out of spectrum!
Wireless Industry: We’ve got plenty to room for unlimited ESPN!

America is on the verge of a wireless traffic data jam so bad, it could bring America to its knees.

Or not.

Stop the Cap! notices with some interest that while wireless carriers continue to sound the alarm about a spectrum crisis so serious it necessitates further compressing the UHF television dial and forces other spectrum users to become closer neighbors, the same giant phone companies warning of impending doom are negotiating with online video producers to offer customers “toll-free,” all-you-cat-eat streaming video of major sports events that won’t count against your usage allowance.

ESPN is in talks with at least one major carrier (AT&T or Verizon Wireless) to subsidize some of the costs of its streamed video content so that customers can watch as much as they want without running into a provider’s usage limit. Both Verizon and AT&T have signaled their interest in allowing content producers to pay for subscribers’ data usage. In fact, they don’t seem to care who pays for the enormous bandwidth consumed by streaming video, so long as someone does.

At a recent investment bank conference Verizon Wireless chief executive Dan Mead explained the next chapter in monetizing data usage will allow the company to rake in more revenue from third parties instead of customers already struggling with high wireless bills.

“We are actively exploring those opportunities and looking at every way to bring value to our customers,” said Mead.

Content producers are increasingly frustrated with the stingy caps on offer at AT&T and Verizon Wireless because customers stop accessing that content once they near their monthly usage limit. One large provider admitted to ESPN that “significant numbers” of customers are already reaching their cap before the end of their billing cycle, after which their online usage plummets to limit the sting of overlimit charges.

Offering “toll-free” data could dramatically increase the use of high bandwidth applications and increase profits at wireless providers based on new fees they could collect from content producers. Customers would still be subject to usage limits for all non-preferred content, a clear violation of Net Neutrality principles.

The buffet is open.

But in case you forgot, wireless carriers won exemption from Net Neutrality, arguing their networks lack the capacity to sustain a Net Neutral Internet experience. These same companies claim without more frequencies to handle the massive, potentially unsustainable amount of wireless traffic, the wireless data apocalypse could be at hand in just a few years. It was also the most-cited reason AT&T and Verizon discontinued their unlimited use data plans.

But unlimiting ESPN video? No problem.

In January 2010, Verizon Wireless was singing a very different tune to the FCC about the need to control and manage high bandwidth applications like the “toll-free” streaming video service ESPN proposes (underlining ours):

Wireless broadband services face technological and operational constraints arising from the need to manage spectrum sharing by a dynamically varying number of mobile users at any time. Thus, unlike, for example, cable broadband networks, where a known and relatively fixed number of subscribers share capacity in a given area, the capacity demand at any given cell site is much more variable as the number and mix of subscribers constantly change in sometimes highly unpredictable ways.

Are wireless carriers now part of the problem?

For example, as a subscriber using a high-bandwidth application such as streaming video moves from range of one cell site to another, the network must immediately provide the needed capacity for that subscriber, while not disrupting other subscribers using that same cell site. Of course, the problem is magnified many times over as multiple subscribers can be moving in and out of range of a cell site at any given moment. Moreover, the available bandwidth can fluctuate due to variations in radio frequency signal strength and quality, which can be affected by changing factors such as weather, traffic, speed, and the nearby presence of interfering devices (e.g., wireless microphones).

These problems compound those resulting from limited spectrum. As the Commission has repeatedly recognized in proclaiming an upcoming spectrum crisis, “as wireless is increasingly used as a platform for broadband communications services, the demand for spectrum bandwidth will likely continue to increase significantly, and spectrum availability may become critical to ensuring further innovation.”

A wireless carrier cannot readily increase capacity once it has exhausted its spectrum capacity. Thus, wireless broadband providers are left to acquire additional spectrum (to the extent available) or take measures that use their existing spectrum as efficiently as possible, which they do through a combination of investing in additional cell sites and network management practices that optimize network usage and address congestion so as to provide consumers with the quality of service they expect.

Regulators need to ask why wireless companies are telling the FCC there is a bandwidth crisis of epic proportions that requires the Commission to exempt them from important Net Neutrality principles while telling investment banks, shareholders and content producers the more traffic the merrier, as long as someone pays. Customers also might ask why their unlimited use data plans were discontinued while carriers seek deals to allow unlimited viewing with their preferred content partners.

What is the real motivation? The Wall Street Journal suggests one:

“Creating a second revenue stream for mobile broadband is the holy grail for wireless operators but collecting fees from content companies would probably make the FCC take a close look into the policy implications,” said Paul Gallant, managing director at Guggenheim Securities. An FCC spokesman declined to comment.

The Wall Street Journal takes a closer look at a plan to manage an end run around Net Neutrality by allowing preferred content partners to offer streaming video services exempt from your usage cap. (4 minutes)

Other stories of interest:

1. What Spectrum Crisis: Verizon Wireless Tries to Monetize Video Usage With New App
2. Bulldozing Wireless Net Neutrality: Carriers Want “Toll-Free” Data for Their Partners
3. Proof Verizon’s Banishment of ‘Unlimited Data’ is a Money Grab, Not a Capacity Concern
4. AT&T’s Internet Overcharging Merry-go-Round — Billing App Makers for Your ‘Overusage’
5. AT&T’s ‘Data Tsunami’: Upselling Customers for Higher Profits During Spectrum ‘Crisis’

Verizon FiOS is off limits to rural customers. Wireless voice and satellite broadband is in your future.

Verizon Communications has big plans for its “miraculous” wireless home phone replacement which will soon find itself in rural homes across Verizon’s service area as part of a larger plan to dismantle rural America’s wired telephone network.

Just as company executives promised more than a year ago, Verizon wants to transition rural customers to fixed wireless phone service that could mean the end of wired broadband for millions of Verizon customers still using DSL.

Verizon senior vice president Tom Maguire told Communications Daily Voice Link is Verizon’s answer for customers it cannot easily transition to fiber optics. He is thrilled about the prospects of getting rid of deteriorating copper networks in favor of an inexpensive wireless alternative.

“I’m super jazzed about this because I think it will be good for everybody,” he said. “I think it’ll change a lot.”

For rural Verizon customers, the changes could be profound, dramatic, and not exactly a win-win scenario:

• No more wired phone service, which means medical monitoring, many home security systems, and inexpensive dial-up service that all rely on landline technology will be rendered unusable;
• No more unlimited use DSL service, no business broadband service, no credit card processing or other electronic business transactions that depend on a wired connection;
• No enforced quality of service standards, rate oversight, or guarantee of access to quality voice service;
• No prospect of advanced fiber optic FiOS services, including high bandwidth video and broadband.

Verizon is making it clear Fire Island and the New Jersey Barrier Island are just the first steps towards the retirement of copper, either in favor of fiber optics in high profit/low-cost areas or wireless in rural areas not worth upgrading.

Maguire claims Fire Island residents did not want the company to tear up yards or streets to replace its damaged copper wire network with newer technology like fiber. But Fire Island residents and administrators tell Stop the Cap! they were never asked. Instead, residents are being told Voice Link is likely their only option for traditional phone service on the western half of the island, and some customers are unhappy they will never get FiOS broadband upgrades Verizon says are financially untenable to provide.

Verizon has quietly tested Voice Link in Florida, giving customers the option of keeping their wired service or switching to the wireless alternative. But the test may have been stacked in Voice Link’s favor, as the choice was given to voice-only customers having chronic service problems with Verizon’s deteriorating copper wire network.

Going forward, many rural customers may not have a choice. For those who want Internet access, Verizon isn’t promising its wireless network is up to the task. Their suggested alternative?

Verizon’s solution for rural broadband.

Get a satellite dish.

Maguire acknowledged Voice Link customers won’t be able to fax or do certain activities, but he said the telco never pretended they would. Verizon won’t be offering data services with Voice Link, but if Fire Island customers want more options, they can potentially choose satellite, he said.

Maguire believes that customers living with a deteriorating copper landline network will gravitate quickly towards a wireless phone replacement.

Verizon arranged a blind test of Voice Link for 40,000 customers in another company’s territory with unbranded devices. When the copper wire network performed normally, customers preferred the quality of traditional landline service. But after it rained, the poorly maintained network made all the difference.

“The copper sounded like hell, it was noisy and static-y,” Maguire said.

Maguire did not say if Verizon blind tested whether customers preferred traditional landline service, Voice Link, or its fiber optic FiOS network.

Verizon hopes to begin introducing its Voice Link service in other markets as early as June.

Other stories of interest:

1. Verizon’s Long Term Plan to Abandon Wired Landlines/Broadband in Non-FiOS Areas Begins
2. Verizon Seeks to Abandon Landlines on Fire Island; Wireless or You Are On Your Own
3. Six Months After Sandy, Verizon Abandoning Wired Network in Mantoloking, N.J.
4. Verizon Will Cease Selling Standalone DSL Service May 6th; Voice With DSL Only, Please
5. Verizon Ending DSL Service in FiOS Fiber-Wired Service Areas

Verizon Communications has filed a formal tariff obtained by Stop the Cap! with the New York State Public Service Commission (PSC) that would establish conditions under which it can abandon its wired network in favor of wireless-only service.

If approved, Verizon will be able to drop wired landline and broadband service in any area of the state if the company can:

• certify that a substantial portion of its facilities in an area are destroyed, rendered unusable, or beyond reasonable repair, or,
• demonstrates that the use of wireless to serve specified customers, or groups of customers, is otherwise reasonable in light of the geographic location, the availability of competitive facilities to serve those customers or groups of customers, or in light of other criteria acceptable to the PSC.

Verizon is using the case of Fire Island, N.Y., to attempt a rewrite of New York’s communications tariffs. Although eastern Fire Island suffered some damage from Hurricane Sandy, a considerable amount of Verizon’s infrastructure further west did not survive the storm. Verizon wants to abandon that wired infrastructure, avoid spending money to upgrade the island to fiber optic service, and switch customers to a voice-only, wireless service called Voice Link that would leave Verizon’s DSL customers without broadband.

Although Verizon has currently only applied to drop wired service to the “western portion of Fire Island,” the tariff would set conditions under which Verizon could abandon its landline network for financial reasons in other portions of the state. For example, Verizon could argue that its declining number of rural landline customers are no longer financially viable to serve because of wired network upkeep and upgrade expenses. Verizon’s application would also allow it to abandon older facilities where competitive services (wireless or wired) are available, and allow Verizon’s wireless products to be considered a suitable alternative to meet universal service requirements.

Verizon says it will offer the same basic calling packages that landline customers can get at the same or lower prices. The company also promises to adhere voluntarily to PSC regulations on customer protection, customer complaints, service quality, safety and reliability.

But Verizon does not promise to offer a functionally equivalent wireless replacement for the landline.

For example, Verizon only promises to support voice calls, access local and toll calling, emergency services with E911 capability, assistance services, telecommunications relay services, and directory listings, including the option of non-published service.

Data services are not supported. Current Verizon DSL customers with unlimited use plans will be forwarded to Verizon Wireless to sign up for the same limited use wireless broadband plans already available in the rest of the country (the ones that charge $50 for up to a handful of gigabytes of monthly usage, depending on the plan). Business customers will need to buy new equipment and sign new contracts with Verizon Wireless (or other wireless carriers) to process credit card transactions. Although some voice calling features are supported, an exact list remains unavailable.

In the event of a power failure, a built-in backup battery will provide up to two hours of talk time, after which the line will stay out of service until commercial power is restored.

Verizon Voice Link: The company’s landline replacement, works over Verizon Wireless. (Asbury Park Press)

Because Verizon Wireless’ existing cellular network serving Fire Island is inadequate, the company has agreed to upgrade and improve service to the island.

Verizon argues its wireless solution is the only answer that makes sense.

“The cost of replacing facilities is very high, and if hurricanes or other severe storms occur in the future, there is a significant risk that the newly installed outside plant would again be damaged or destroyed,” argues Verizon’s Manuel Sampedro, who is overseeing Verizon’s service restoration effort on Fire Island. ”Wireless service is already the predominant mode of voice communication on the island.”

But in the event of another major storm, Verizon’s wireless facilities could also be knocked out of service, potentially for weeks, as happened during Hurricane Sandy.

In the nearby coastal city of Long Beach, N.Y., every cell tower in the area failed because of the storm . City Manager Jack Schnirman told the FCC at a recent hearing wireless proved no more robust than any other technology, and described a frustrating experience attempting to reach representatives from major cell phone carriers about when exactly service could be restored.

“Long Beach reached out to one of the carrier’s customer support departments, explained the devastation and inquired about the carrier deploying a cell on wheels,” Schnirman said. “The customer service rep replied, ‘you might want to look that up on the Internet, I don’t know what that is.’ Well obviously, ironically, we had no Internet at that time.”

Customers did not fare any better.

“There was one woman in particular who passed away, of natural causes, an elderly woman,” Schnirman said. “And her daughter had to walk literally a mile and a half from her home to police headquarters just to say, ‘Listen, my mom has passed, and I thought I should tell somebody.’ ”

Wireless carriers are not obligated to provide backup service in the event of a power failure. An FCC effort to set minimal standards for backup cell service was met with legal threats by the wireless industry and the FCC backed down.

Verizon is in a hurry to win approval of its tariff change, requesting its filing be approved and take effort on less than 30 days’ notice with a waiver of the requirement that it publish a public notice about the change in area newspapers.

Reporter David Cay Johnston says Verizon and AT&T’s efforts to abandon the landline are no accident. They are part of a larger lobbying effort to abandon company obligations under the “carrier of last resort” policies that guarantee every American access to quality landline telephone service. Wireless phone service is unregulated. Johnston isn’t the only one reporting on this story. Stop the Cap! has covered it repeatedly since early 2010. (2 minutes)

Other stories of interest:

1. Verizon Seeks to Abandon Landlines on Fire Island; Wireless or You Are On Your Own
2. Verizon’s Long Term Plan to Abandon Wired Landlines/Broadband in Non-FiOS Areas Begins
3. Six Months After Sandy, Verizon Abandoning Wired Network in Mantoloking, N.J.
4. Verizon Will Cease Selling Standalone DSL Service May 6th; Voice With DSL Only, Please
5. AT&T Will Invest $14 Billion to Expand Wired/Wireless Broadband, Abandon Traditional Landlines

The company that charges customers north of $90 a month for cell phone service with a tiny data plan has introduced Verizon Cloud, a ho-hum free cloud storage add-on for Android devices that is leaving customers cold.

Verizon Wireless is applying the same stingy standards to its online backup service it uses for its paltry data plans, providing customers with less storage than the competition:

• Verizon Wireless: 500MB
• Dropbox: 2GB
• Google Drive: 5GB
• SkyDrive: 7GB

Run over your allowance? A premium plan comes with premium pricing: $2.99 per month for 25GB up to $9.99 per month for 125GB.

The ‘could you spare it’-storage allowance is bad enough, but the service’s performance is much, much worse judging from more than 5,700 scathing customer reviews. The majority of users rate Verizon’s app just one star, primarily because they couldn’t give it zero stars.

“It’s disappointing that Verizon would release this piece of crap and then encourage people to download it,” writes Andrew Gardner.

That’s okay Andrew. Verizon is gradually pushing the app to compatible phones with no uninstall option. Those using Verizon’s Backup Assistant will find all their content automatically transferred over to Verizon Cloud whether they want it floating there or not.

“I can’t wait not to use this,” shared Gabriel Rodriguez.

Some customers don’t want Verizon force-feeding apps on their phones, particularly ones designed to chew at their data plan allowance while unintentionally crashing their smartphones.

“This app is responsible for 99% of the crashes on my poor, aging Droid X over the last few months,” writes Tim Odell. “The update came through and was like ‘you must sign up for….’ Seeing any changes and a “plus” associated with a Verizon mandate also left me assuming it would (secretly) cost me money. For my troubles I’m awarded 1-2 crashes per day.”

“Verizon apps run flawlessly as long as you allow them to do whatever they want (ie. turn off your Wi-Fi) and use your data plan without your knowledge,” offers David Lawrence. “[A Verizon rep told me] ‘It’s good for business [and] job security.’ At this point I didn’t have enough bread crumbs to find my way home. Maybe she had just come from an internal training seminar and she missed the ‘don’t repeat this to a customer’ part. Or, maybe, we have come to a point in this world where some people are completely blind to theft and unfairness, as long as it’s marketed as ‘good business’. Either way, the app sucks.”

Other stories of interest:

1. Verizon Wireless Earns More from Wireless Data Traffic That Costs Them Less
2. Amazon Introduces Free Personal Cloud Storage; Will Consumers Use It on Capped Accounts?
3. Verizon Wireless Hotspot Pricing Will Burn a Hole in Your Wallet With $20/GB Overlimit Fee
4. Verizon Wireless Charges $5 a Month for Tool To Prevent Paying Even More
5. Verizon Sneaks Customer Off Unlimited Data Plan, Despite Promises It Wouldn’t

AT&T and Verizon Wireless have the largest share of wireless customers. (Wall Street Journal)

The Department of Justice has recommended the Federal Communications Commission promote competition by setting aside certain future low-frequency wireless spectrum for auctions open exclusively to smaller wireless carriers including Sprint and T-Mobile USA.

“Today, the two leading carriers have the vast majority of low-frequency spectrum whereas the two other nationwide carriers have virtually none,” the Department of Justice wrote in comments to the FCC. “This results in the two smaller nationwide carriers having a somewhat diminished ability to compete, particularly in rural areas where the cost to build out coverage is higher with high-frequency spectrum.”

The Justice Department’s antitrust division has monitored the wireless industry with increasing concern consumers are not getting benefits from a robustly competitive marketplace increasingly concentrated in the hands of two wireless giants: AT&T and Verizon Wireless.

That dominance is made possible, in part, from the control of lower frequency spectrum, particularly in the 600-800MHz range that easily penetrates buildings and delivers a more reliable signal over longer distances than frequencies counted in the gigahertz. Verizon and AT&T control large swaths of these lower frequencies that work well indoors and provide longer distance coverage in rural areas. Conversely, Sprint and T-Mobile, among other smaller carriers, rely heavily on higher frequencies that need a larger network of cell towers to support good signal levels.

It often means rural customers may find reception with AT&T or Verizon Wireless but end up with a roaming indicator or no service at all with smaller providers.

The Justice Department worries that auctioning off future prime 600MHz spectrum carved out of the UHF television band reallocated for wireless services will end up in the hands of the deepest pocketed providers — AT&T and Verizon Wireless, and further hamper the ability of Sprint, T-Mobile and other small carriers to compete.

“Due to the scarcity of spectrum, the Department is concerned that carriers may have incentives to acquire spectrum for purposes other than efficiently expanding their own capacity or services,” writes the DoJ. “Namely, the more concentrated a wireless market is, the more likely a carrier will find it profitable to acquire spectrum with the aim of raising competitors’ costs. This could take the shape, for example, of pursuing spectrum in order to prevent its use by a competitor, independent of how efficiently the carrier uses the spectrum. Indeed, a carrier may even have incentives to acquire spectrum and not use it at all.”

The Justice Department echoes critics’ contentions that given a chance, large wireless carriers will “warehouse” acquired spectrum, unused, denying it from the competition. Carriers object to that claim, calling it baseless. But incentives remain for providers to drag their feet: spectrum warehousing forces competitors to pay even higher prices for other scarce spectrum, the necessity of constructing a larger network of costly cell towers to offer robust coverage, and fighting customers’ perceptions of inferior quality indoor phone reception.

In response, AT&T sent a multi-page, thinly veiled threat to sue if the Commission adopted the recommendations of the Justice Department.

“The Department is quite candid about its motive for this blatant favoritism: it hopes that reducing competition for the spectrum may enable Sprint and T-Mobile ‘to mount stronger challenges’ to AT&T and Verizon,” AT&T wrote in response. “Picking winners and losers in this fashion would be patently unlawful.”

AT&T also claimed the Justice Department’s recommendations were specifically tailored to help the two competitors, despite the fact neither company has shown much interest in acquiring low-frequency wireless spectrum, much less further expand the reach of their wireless networks:

“It is especially puzzling that the Department feels the need to help Sprint and T-Mobile in particular. Sprint already has by far the largest nationwide portfolio of spectrum, and holds vastly more spectrum than either AT&T or Verizon. It will also have ample financial resources at its disposal, as the Department has already approved Sprint’s purchase by Softbank, a financially strong Japanese company, and Dish Network has now made a competing offer for Sprint, citing the financial and strategic advantages of its own proposed combination.

Regardless of how this bidding war turns out, Sprint will receive a sizable infusion of cash, spectrum or both. T-Mobile, which is owned by Deutsche Telekom, one of the largest telecommunications companies in the world, just recently acquired substantial amounts of spectrum from both AT&T and Verizon, and is on the verge of completing a merger with MetroPCS that will add another trove of spectrum. So it is surely not for a lack of spectrum resources or financial backing that the Department needs to propose a financial giveaway to these companies.

Moreover, neither company even chose to bid at the Commission’s last auction of low-frequency spectrum, nor have they availed themselves of opportunities to acquire such spectrum in secondary markets. If low-frequency spectrum was critical to their business plans, as the Department simply assumes, someone should have informed their management, which has, instead chosen to acquire deep holdings in [higher frequency] PCS, AWS, and BRS/EBS spectrum.”

The Justice Department filing did not name Sprint or T-Mobile directly, but both companies are the only remaining national competitors to both AT&T and Verizon Wireless.

Spectrum set-asides are not unusual in telecommunications regulation. The Canadian Radio-television and Telecommunications Commission set aside significant wireless spectrum exclusively for new entrants to promote competition. Ultimately, the new competitors had little impact with less than a 10 percent market share and all three are now considered up for sale. That spectrum may eventually end up in the hands of the largest Canadian wireless companies regardless of the CRTC’s original intentions when license transfer restrictions expire in 2014. All three could be acquired by one or more of the major providers.

Other stories of interest:

1. FCC on Verizon-Big Cable Spectrum Deal: Sure, Why Not?; But Justice Dept. Thinking Twice
2. Wall Street Wants Two Wireless Carriers for Americans: AT&T and Verizon
3. Moody’s Declares AT&T and Verizon the Winners — Sprint and T-Mobile Can “Never Catch Up”
4. Breaking: Justice Dept. Files Suit to Stop AT&T/T-Mobile Merger
5. The AT&T/Verizon Wireless Duopoly: “Humpty Dumpty Has Been Put Back Together Again”

Austin gets a horn of plenty with free Time Warner Cable Wi-Fi because Google is coming to town.

As Time Warner Cable faces forthcoming competition from Google Fiber in Austin, the company is responding with the construction of a free Wi-Fi network for its broadband customers to protect its business.

TWC WiFi is available now from a limited number of hotspots, but hundreds more will become available across Austin in 2013 as the company builds out its wireless network.

Time Warner Cable customers with Standard Internet or above qualify for free access, as do Business Class customers. Others can trial the service for free and then buy access for $2.95 an hour.

“Increasingly, our Austin customers want to take their high-speed Internet with them out of the home and on-the-go,” said Area Vice President Kathy Brabson. “The TWC WiFi network we are building for Austin will allow our customers to greatly maximize their TWC Internet subscription at no additional charge.”

It is no coincidence Time Warner Cable has selected Austin for a Wi-Fi rollout. The Wi-Fi service was specifically intended to provide more value for Time Warner Cable customers in competitive markets to keep them from switching to a competitor.

It represents a sea change for a cable company that in 2009 targeted Austin for an Internet Overcharging scheme that would have slapped a usage limit and consumption billing on the area’s broadband customers. With the advent of strong competition from Google, Time Warner Cable is giving customers something instead of taking things away.

Austin customers can download the free TWC WiFi Finder app available in Google Play and the Apple App Store or visit www.twc.com/wificoverage to view the hotspot coverage map as the wireless network grows. Once authenticated, customers can also access Wi-Fi hotspots in other cities including New York City, Los Angeles, Chicago, Philadelphia, Atlanta, Baltimore, Boston, Washington, D.C., San Francisco, Orlando, Tampa, Kansas City, Charlotte and more.

Other stories of interest:

1. Frontier Introducting Wi-Fi in Fort Wayne; Free Service Limited & Slow
2. Kansas City Time Warner Cable Customers Getting Downtown Wi-Fi Access, Starter Internet
3. Austin Media Gushing for Google Fiber
4. Time Warner Cable Wi-Fi Now Available in Los Angeles, Orange Counties
5. AT&T, Time Warner Cable Claim They Are Ready for Google Fiber in Austin

Since introducing its version of TV Everywhere more than a year ago, one of the most frustrating aspects of Time Warner Cable’s video streaming service has been it only works within your own home over the cable company’s own broadband service. As of tomorrow morning, that will change. If you own an Apple iOS tablet or smartphone, the cable company’s new version of its TWC TV app (free) will bring streamed and on-demand programming from a handful of cable networks regardless of where you happen to be.

There are several limitations however:

1. Having access to a Wi-Fi network while on the go will be a big help. Streaming access over 3G/4G service will initially be limited to Verizon Wireless customers, perhaps a fringe benefit of the agreement between Verizon and Time Warner Cable to collaborate in cross-marketing services;
2. Only nine cable networks and one Time Warner Cable-owned news channel will be available for live streaming when the service launches. None of them are particularly compelling. Programmers are fearful that streaming access outside of the home may open up cable programming to non-paying customers with access to a shared password;
3. Fox News Channel and Fox Business were reportedly going to be available as of tomorrow, but Time Warner Cable’s official blog post omits the two networks;
4. Android and desktop users will have to wait until summer to get the upgrade, an annoying prospect considering Android users now outnumber Apple iOS users, who have to wait.

The online programming guide is also being revamped to help users find TV channels and online on-demand content more quickly.

The initial out-of-home On Demand library offers over 1,100 hours of programming from the following providers:

BBC America
BET
CBeebies
CMT
Comedy Central
Cooking Channel
DIY
FEARnet
Food Network
Hallmark
HGTV
Logo
MTV
MTV2
Nick Jr.
Nickelodeon
Palladia
Spike
TeenNick
Travel Channel
Tr3S
TV Guide Network
TV Land
UniMas
Univision
VH1
VH1 Classic

Live TV streaming will be available from the following national networks:

Aspire
BBC America
beIN Sports (English/Spanish)
FearNet
GMC
Pac-12
TVGuide Network

Additionally, all Time Warner Cable local news channels will eventually be available out of home, though all local news, traffic and weather channels may not be available immediately. The following news channels will be available at launch:

NY1
NY1 Noticias
News 14 Carolina
YNN (New York and Texas)

Other stories of interest:

1. ESPN Finally Launching Online for Time Warner Cable Subscribers Oct. 25th
2. Time Warner Cable Introduces Android App, But Will Wait for ‘Ice Cream’ Before Streaming Video
3. Updated: Time Warner Cable Launches Desktop Streaming Cable TV for ‘Authenticated’ Subscribers
4. Fox News Channel – Time Warner Cable Deal Will Increase Cable Rates for Millions
5. Your Next Time Warner Cable Set-Top Box: Roku

Satellite television provider Dish Network today offered $25.5 billion for Sprint Nextel Corp., in an unsolicited bid that surprised the wireless industry.

The bid, announced by CEO Charles Ergen, is $5.5 billion higher than that offered by Japan’s Softbank, which already had a pending deal to take a 70 percent stake in the third largest wireless carrier.

The bidding may not yet be over if Softbank decides to counter with a higher offer or if other bidders emerge in the coming weeks.

Ergen has signaled his interest in entering wireless markets to compensate for slowing earnings in the satellite television business.

“He is trying to transform his own business,” Vijay Jayant, an analyst at International Strategy & Investment Group in New York told Bloomberg News. “He’s trying to reinvent himself, moving from satellite to wireless.”

Ergen’s vision would include a bundled package of satellite television, broadband wireless Internet and cellular telephone service. Providing suitable wireless broadband Internet in rural areas may be the biggest challenge because of Sprint’s more limited network coverage, but a marketing deal combining satellite television from Dish and Sprint cell phone service would be easier to carry out.

Ergen’s offer includes $8.2 billion in stock and $17.3 billion in cash. Ergen’s company has stockpiled at least $10 billion from selling bonds over the last year. He intends to borrow the rest.

Ergen earlier had attempted to disrupt a deal that would have consolidated Clearwire into Sprint. Ergen offered $3.30 a share for Clearwire, 33 cents higher than the $2.97 per share offer from Sprint. Ergen also reportedly approached both MetroPCS and Deutsche Telekom’s T-Mobile USA looking for a deal to no avail.

Some analysts question whether Ergen has enough experience to manage a major wireless company with only his past involvement selling satellite TV subscriptions. But he arrives with more than just cash and stock options. Ergen has acquired mobile spectrum from bankrupt TerreStar Networks and DBSD North America. Ergen says he has no interest in building his own wireless network, but a combined Sprint/Dish could manage the spectrum through Sprint’s existing operations.

Ergen told Bloomberg News combining the spectrum Dish owns with the spectrum owned by Sprint and Clearwire would assure Americans of a robust wireless data platform that will not have capacity constraints or require individual device fees. That is in keeping with Sprint’s existing marketing as a provider of truly unlimited wireless data plans.

Several Wall Street analysts told CNBC and Bloomberg News the deal with Softbank may be more ideal for shareholders and consumers, because it would strengthen Sprint’s leverage with equipment manufacturers to offer cheaper and more robust devices.

Consumer advocates have mixed feelings. Dish has no prior association to the wireless industry so the deal does not represent direct, competitive consolidation. It also would boost Sprint as a more formidable competitor to AT&T and Verizon Wireless. But it could also further orphan T-Mobile USA.

“Right now, we have two giants and two also-rans, and now you’re getting potentially three giants dividing up the American market place, with T-Mobile lagging far behind,” Susan Crawford told the New York Times.

Bloomberg News explores what Dish sees in Sprint that is worth a bid of $25.5 billion to acquire the country’s third largest mobile company.  (2 minutes)

http://www.phillipdampier.com/video/Bloomberg Dish Bids 25-5 Billion for Sprint to Challenge Softbank 4-15-13.flv

Bloomberg says Dish has been stockpiling $10 billion in cash for new acquisitions to transform its business away from a satellite TV-only company.  (2 minutes)

http://www.phillipdampier.com/video/Bloomberg All Things Are on the Table for Sprint 4-15-13.flv

Christopher Marangi, of Gabelli Asset Fund talks with Bloomberg’s Erik Schatzker about Dish Network’s unsolicited $25.5 billion offer for Sprint and what options are available to Sprint with the offers it has on the table. (2 minutes)

http://www.phillipdampier.com/video/Bloomberg Dish Bid for Sprint Lacks Capital Chaplin Says 4-15-13.flv

Jonathan Chaplin, an analyst with New Street Research LLP, thinks Softbank’s original offer is superior to the one from Dish.  (6 minutes)

http://www.phillipdampier.com/video/Bloomberg Bidding for Sprint Is Not Over Fritzshe 4-15-13.flv

Jennifer Fritzsche, Managing Director of Equity Research at Wells Fargo Securities, discusses the likelihood of other players making bids. (2 minutes)

http://www.phillipdampier.com/video/Bloomberg What Did Dish CEO Ergen Say About Sprint Bid 4-15-13.flv

A Bloomberg News reporter interviewed Charlie Ergen about why he wants to enter the wireless business.  Ergen’s vision includes no nickel and diming customers with monthly device fees and usage charges. (4 minutes)

Other stories of interest:

1. Dish Network Wants to Convert Satellite Frequencies to Add Voice, Broadband Services
2. Dish Network Planning Nationwide 5Mbps Satellite Broadband Service
3. Emboldened Sprint Seeks Controlling Interest in Clearwire; Will Pay $100 Million for Co-Founder’s Stake
4. Wall Street Goes for Another Round of Sprint-Bashing: Why Are They Still in Business?
5. Wall Street Wants Two Wireless Carriers for Americans: AT&T and Verizon

Canada’s effort to expand mobile competition has likely failed with news that three of the most significant new independent entrants have put themselves up for sale, with one likely to be acquired by Telus, western Canada’s largest phone company.

With Bell Canada, Rogers Communications, and Telus dominating at least 90 percent of Canada’s wireless marketplace, breaking up the triopoly was unlikely to be easy, but three of Canada’s newest players that acquired spectrum just five years ago are already looking for exit strategies.

Bloomberg News reported Friday that Mobilicity is in talks to be imminently acquired by Telus for between $350-400 million. Public Mobile has hired investment bankers to find a buyer. Vimpelcom, Ltd., which owns Wind Mobile, announced it was “exploring its options, including divestment.”

The three companies have competed with the dominant players for about three years with little success. Combined, the three have not managed to achieve even a combined 10 percent market share. Most sell unlimited talk and text plans to customers that would normally buy prepaid service.

Potentially slowing any sale is a requirement that none of the independent companies can transfer their spectrum licenses until 2014, a condition of the 2008 special spectrum auction that reserved prime frequencies for new competitors and put them off-limits to larger mobile companies.

Telus remains the most likely suitor of independent providers because the company lacks the spectrum assets of its larger competitors Bell and Rogers.

Mobilicity operates its HSPA+ “4G” network on Advanced Wireless Services (AWS) frequencies in the 1,700MHz range. Although Telus has considerable spectrum in British Columbia and Alberta — its home territory — the provider has considerably less in eastern Canada, particularly in large metropolitan cities. Mobilicity has a tiny market share in the Greater Toronto Area, yet its AWS spectrum equals that of Telus in the city. Telus could find an acquisition of Mobilicity the easiest way to bolster its available spectrum for future 4G deployment and expansion.

Three small independent wireless providers hold almost as much combined spectrum as Telus holds today.

Any exit of a combination of Canada’s newest wireless players will likely be seen as a failure of the government’s efforts to bolster competition. The dominance among the three largest providers has left Canadians with high-cost plans and a wireless service contract that lasts one year longer than America’s standard two-year service agreement.

Industry Canada, the economic regulator fostering a growing, competitive and knowledge-based Canadian economy, had little to say about the news.

“Any transaction that requires regulatory approval will be considered accordingly,” said Alexandra Fortier, a spokeswoman for Industry Minister Christian Paradis. “We cannot comment on speculation.”

BNN reports industry consolidation is likely forthcoming in Canada’s wireless marketplace as Telus seeks to acquire independent provider Mobilicity. A financial analyst says the move is designed to curb budget-priced wireless service in Canada. Mobilicity would likely eventually be merged into Telus-owned Koodo Mobile, the company’s prepaid mobile division.  (5 minutes)

http://www.phillipdampier.com/video/Globe and Mail Feds aim to open up wireless market 3-13.flv

Too little, too late? Industry Minister Christian Paradis says the Harper government wants to open up the wireless market to more players with another wireless spectrum auction. But now several of Canada’s newest independent providers are all up for sale, and the country’s dominant three may end up owning one or more of them.  (2 minutes)

http://www.phillipdampier.com/video/Globe and Mail Market View Why we love to hate our wireless companies 3-13.flv

The Toronto Globe & Mail explores why Canadians hate their cell phone and mobile broadband providers so much.  (2 minutes)

Other stories of interest:

1. Bell: If You Don’t Sell Us the Frequencies, We’ll See That Rural Canada Gets Nothing
2. Independent Cell Providers Resign from Canadian Wireless Telecom Association
3. Cell Phone Companies Hoarding Cash/Credit for Spending Blitz on Canadian Spectrum
4. Canada’s Cellular Cartel: 3 Wireless Companies Control 94 Percent of the Market
5. Industry Minister Holds Closed Door Meetings With Big Telecoms And You’re Not Invited