The Chicago Tribune‘s advocacy for the merger of AT&T and T-Mobile leaves the facts far behind, and raises questions about just how much the newspaper understands about telecommunications company mergers.

In this morning’s edition, the newspaper claims efforts by the Justice Department to block the merger will “slow [wireless] progress to a crawl.” That’s a half-baked conclusion, considering AT&T’s own accidentally-public internal documents reveal a willingness to spend $39 billion on a merger while balking at spending one-tenth of that amount to upgrade its own 4G network.  The injury to rural America the Tribune fears most was self-inflicted by AT&T even before the merger was announced.

Access to advanced wireless Internet is the key. A merger of AT&T and T-Mobile would bring an under-served swath of America into the 21st century of high-speed mobile data communication. Much like the rural electrification movement of the 1930s, this deal offers a chance for many Americans to leap ahead technologically.

If Justice gets its way, progress will slow to a crawl. We think the FCC should approve the merger after obtaining appropriate concessions — and Justice should settle its case sooner, not later. Dragging out this proceeding stands to hurt a nation that can ill afford more damage from a government too often hostile to business interests.

Evidently the editorial writers at the Tribune have been drinking AT&T’s Kool-Aid.  There is more to see here than AT&T’s advocacy kit, if one is willing to look beyond lucrative, saturation advertising campaigns and lobbying.

The government got the bright idea of helping wire rural America for electricity when commercial providers refused.

AT&T’s own merger announcement spoke glowingly of the “increased efficiencies” a more concentrated wireless marketplace will deliver, but said very little to investors about T-Mobile’s cellular network being the key to unlock rural wireless.  The reason is simple: T-Mobile doesn’t have a rural wireless network.  In fact, T-Mobile’s long-standing focus on urban markets means considerable duplication of resources in medium and large cities — resources that might help reduce the number of dropped calls in cities like New York, Chicago or San Francisco, but hardly a boon for residents of Ottumwa, Iowa, who barely get a signal today from AT&T, much less T-Mobile.

We agree with the Tribune editors when they say improved advanced wireless Internet is important to rural America. But nothing within AT&T’s massive document dump guarantees rural 4G service, especially after four national companies judged it didn’t make much business sense.  Three national carriers hardly strengthens the case.  In fact, investors will expect AT&T to use precisely the same Return on Investment-formulas that have always ruled rural 4G wireless out of bounds.

The Tribune forgets rural electrification came in spite of private power companies, who viciously opposed government electrification projects (unless they benefited from them).  The reason rural Americans went without electrical service until the late 1930s was the same reason rural Iowa doesn’t have lightning-fast 4G service — it doesn’t make much business sense to provide it.

When President Franklin D. Roosevelt declared electricity an essential utility service every American should be able to access at a fair price, government resources picked up where Wall Street left off — financing electric generation projects and encouraging the development of power cooperatives and municipal utilities. It often took more than 20 years to pay off the costs of the infrastructure — at a price (and wait) unwilling to be covered by giant power companies like Chicago’s Commonwealth Edison at the time.

It’s much the same story for AT&T today.  The enormous telecommunications company was provided an estimate of $4 billion to upgrade its network to 4G service nationwide.  Company executives refused, suggesting the time required to recoup that investment was too far out for their tastes.  But a $39 billion dollar merger with T-Mobile, despite the much higher price tag, delivers immediate benefits they can take to the bank: decreased competition and pricing innovation.  T-Mobile delivers both on its own, and even in fourth place influenced the service plans and pricing at other wireless carriers.  By eliminating that competition, the pressure to reduce prices or enhance service is diminished.  The ability to raise prices, or reduce the number of services, is enhanced.

Astonishingly, the Tribune writers completely ignore the biggest reason why AT&T cannot afford to slow progress to a crawl.  Its name is Verizon Wireless, and AT&T ignores its own network at its peril.  That’s why competition, even from America’s #4 carrier, remains critically important.

While the Chicago Tribune seems comfortable rallying for the cause of one of their advertisers — a multi-billion dollar corporation it sees as a victim of government “anti-business” hostility, we’re more concerned about protecting American wireless consumers from the results of AT&T’s efforts to cut competition (and consumer-friendly services) to a bare minimum.  AT&T’s carrot is the illusory promise of enhanced wireless service in rural communities the company routinely ignores.  The Justice Department, thankfully, prefers the stick — recognizing an anti-competitive, anti-trust feeding frenzy when it sees one, and is correct when it gives it a good whack.

A new study from the University of Michigan suggests one U.S. cell phone company is intentionally throttling cell phone speeds by as much as 50 percent, potentially to engage in “deep packet inspection” of their customers’ wireless traffic.

The researchers also found bad network management may be costing you up to 10 percent of your daily battery life.

The study, published by a team of researchers at the university and Microsoft Research, relied on nearly 400 volunteers running a diagnostic application while using 107 wireless providers around the world.  Researchers found company policies at several carriers in conflict with practices guaranteeing the fastest wireless data speeds, maximum battery life, and protection from malware and other hacker actions like IP spoofing.

The researchers refused to name the biggest offending carriers, citing legal reasons, but rang the alarm that network performance and security was clearly hampered by management decisions designed to keep costs down and maximize company network efficiency, at the expense of the quality of your service.  Among the conclusions:

• Microsoft engineer Ming Zhang believes the one U.S. carrier with dramatically reduced speed performance is probably using “deep packet inspection” techniques to analyze what individual customers are doing with their wireless connections.  The overhead from that inspection process is implicated in reduced speeds and performance;
• At least 11 wireless carriers are hurriedly shutting down TCP data connections that applications want to leave open in order to communicate on the network.  When an app discovers the data connection has been closed, it has to request a new connection, wasting up to 10 percent of daily battery life;
• Four of 60 cellular networks allow IP spoofing, which can make hosts vulnerable to scanning and battery draining attacks even though they are behind a firewall.

TWC WiFi in Los Angeles County

TWC WiFi in Orange County

Time Warner Cable has unveiled free Wi-Fi service for their broadband customers on-the-go in selected portions of Los Angeles and Orange counties.

TWC WiFi comes free for Road Runner customers.  Others can access the network for $2.95 for one hour, $6.95 for one day, $19.95 for a week, or $49.95 a month, which is at least as much as the price of a traditional Road Runner account.

The first phase of the $15 million dollar wireless network covers 40 square miles, including downtown Los Angeles, Newport Beach, Santa Ana, Venice Beach, and West Hollywood.

That’s only a tiny fraction of Los Angeles County’s total size, encompassing more than 4,700 square miles, but the cable operator promises it will be expanding the wireless network to cover Westside coastal communities and more of Orange County.

Los Angeles joins New York City as Time Warner’s second Wi-Fi-enabled city.  The cable company is introducing Wi-Fi service to help improve the perceived value of the company’s broadband product.

For years, most prepaid cell phone providers charged a flat per-minute rate for calling, usually without a monthly service fee, for those who didn’t want or couldn’t afford a traditional postpaid calling plan that came with a large bucket of calling minutes.

But now prepaid cell phone providers are increasingly announcing new bundled service pricing for prepaid users that would be familiar to any cell phone user with a two-year contract.

AT&T today announced a new plan (available Sept. 18) for its prepaid GoPhone customers that bundles 250 voice minutes with unlimited texting for $25 a month.  It joins AT&T’s $50 unlimited talk, text, and web plan for GoPhone customers, without any contract commitment.

AT&T also announced a new International Long Distance add-on package for prepaid customers.  For $10 a month, customers get 250 minutes of calling to over 50 countries, good for 30 days.

GoPhone customers can also now roam with their prepaid phones in Canada at special roaming rates, according to AT&T:

• Voice – $.39 per minute (no surcharges)
• Text – $.25 per message sent, $.20 per message received

When high definition television was a novelty, there was just one network that specialized in showing off what digital HD could do for television viewing: Mark Cuban’s HDNet.  Broadcasting exclusively in 1080i High Definition, HDNet featured prominently in television showrooms and HD-capable homes, showing a mix of sports, movies, documentaries, specials and current events programming in crystal clarity.

It was also a novelty in that it had no direct affiliations with either a movie studio or a cable television company.  That independence (and a desire to be included on standard HD tiers and not ‘mini-pay‘), has proved costly for Cuban’s venture, celebrating its 10th anniversary this month.  HDNet is in a unique position of finding itself off of an increasing number of cable providers’ lineups.

The latest: Rogers Cable, who has told subscribers it intends to drop the channel Nov. 1.

The cable company did not explain why it was planning to remove the channel, but it is hardly alone.  Bell dropped the network last December.  In the United States, HDNet has lost lucrative carriage agreements with Time Warner Cable, Bright House Networks, Cox Cable, Mediacom, RCN, and MetroCast Cablevision.

It is rare for cable operators to sever relationships with networks, except for brief periods during contract renewal talks.  But they make an exception for Mark Cuban’s networks, even if it means replacing HDNet programming with live cattle auctions.