An increasing number of wireless data users are getting some tough love courtesy of AT&T.

“Your data use this month places you in the top 5% of users,” the text message reads. “Use Wi-Fi to avoid reduced speeds.”  Our regular reader Earl hopes we’ll keep spreading the word.

AT&T’s speed throttle has now moved beyond the pages of tech blogs and into USA Today, where the newspaper explores the trials and tribulations of wireless data management policies at the nation’s largest wireless companies.

Mike Trang, along with at least 200,000 other AT&T customers, has been caught in AT&T’s wireless speed trap.  The result can be speeds punitively reduced to dial-up for the remainder of a billing cycle, leaving customers on AT&T’s “unlimited use” plan waiting up to two minutes for a single web page to load.

While AT&T tells the newspaper it only throttles the speeds of unlimited customers who use an average of 2GB or more per month to ease congestion (if that), the company’s “congestion problems” seem to disappear when customers switch to a usage-billing plan that charges fees based on different usage allowances:

Trang’s iPhone was throttled just two weeks into his billing cycle, after he’d consumed 2.3 gigabytes of data. He pays $30 per month for “unlimited” data. Meanwhile, Dallas-based AT&T now sells a limited, or “tiered,” plan that provides 3 gigabytes of data for the same price.

Users report that if they call the company to ask or complain about the throttling, AT&T customer support representatives suggest they switch to the limited plan.

“They’re coaxing you toward the tiered plan,” said Gregory Tallman in Hopatcong, N.J. He hasn’t had his iPhone 4S throttled yet, but he’s gotten text-messages from AT&T, warning that he’s approaching the limit. This came after he had used just 1.5 gigabytes of data in that billing cycle.

Many customers who have received the text message warning about their usage now think twice about everything they do with their phone, which may be part of what AT&T intended for its remaining customers grandfathered on a now-discontinued unlimited use plan.

John Cozen, a Web and mobile applications designer in San Diego, told USA Today he’s now “almost scared to use the phone.”

Cozen’s complaints to AT&T have been ignored and now he’s shopping for a new carrier.

AT&T’s warning-and-throttle system is the strictest among America’s largest wireless carriers. When customers exceed AT&T’s arbitrary declaration of being among the “top 5% of users,” their speeds are subject to severe slowdowns until their next bill is issued. This leaves customers who may have needed their phone at the beginning of the month for a business trip or vacation suddenly throttled for weeks because of what AT&T calls “congestion,” even if nobody else is using the cell tower.  Even worse, customers not yet deemed to be offending AT&Ts usage manners, or who pay per gigabyte, can overload a cell tower and create the very congestion AT&T claims it hopes to manage.  But only “unlimited use” customers get “time out” in the usage penalty corner.

Among other carriers:

• Verizon Wireless also uses a network management system that can throttle speeds for exceptionally heavy users, but their speed throttle is engaged only when individual cell towers are overloaded with traffic, and the speed reduction level will vary with the amount of traffic on that tower.  When congestion eases, speeds return to normal for everyone;
• T-Mobile throttles customers after a maximum of 5GB of usage per month, unless other arrangements are made with the company;
• Sprint Nextel does not have usage limits or a throttle on smartphone data plans at this time.

HissyFitWatch: Damn you FCC!

For the first time in a long time, AT&T did not get what it wanted from Washington regulators and legislators. The repercussions of the company’s failure to secure its controversial merger with Deutsche Telekom’s T-Mobile USA has been one HissyFit after another, including the resignation-retirement of Forrest Miller, a 30-year veteran who was the company’s head of corporate strategy and mergers and acquisitions. After heads rolled, there was the small matter of the multi-billion dollar “breakup fee” payable to T-Mobile. Now someone has to pay:  You.

At Stop the Cap!, we scrutinize quarterly conference calls at major telecommunications companies so you don’t have to. We’ve sat through renditions of “we’re sorry” when Charter Communications’ executive management allowed the company to be flushed into bankruptcy, we’ve heard the Excuse-o-Matic from Frontier Communications about why their broadband service is woefully overloaded with promises of better days ahead, and a whole lot of creative spin to emphasize cord-cutting-bad-news at the nation’s largest cable companies isn’t really a problem all — it’s the housing market, it’s the ‘seasonal residences’ or ‘college students going home’ problem… or sunspots.  Who really knows?  It’s definitely not that they’re charging too much.

Whether it has been Time Warner Cable’s Glenn Britt, or Verizon’s Ivan Seidenberg, chief executives always project a cool, calm, steady authority that leaves shareholders and financial analysts with an impression the adults are in charge, even if they tell little white lies to keep the stock price up.

And then there is AT&T’s chief executive — Chairman Emperor Randolph Stephenson, who used the occasion of AT&T’s 4th Quarter earning results conference call to become a spectacle that brought the house down.

As we look ahead, the issue that gives me the most concern, quite frankly, isn’t our ability to execute. The #1 issue for us as we move forward, and for the industry, I believe, it continues to be spectrum. This industry continues to see just explosive mobile broadband growth and is providing one of the few bright spots in the U.S. economy, but I think we all understand this growth cannot continue without more spectrum being cleared and brought to market. And despite all the speeches from the FCC, we’re all still waiting.

He didn’t stop there.  In an impromptu rant, Stephenson lectured Washington from afar, excoriating all-concerned for failing to agree with their multi-million dollar propaganda campaign that merging America’s second and fourth largest wireless carriers in a market with just four national providers was good for consumers and would bring wireless nirvana to the heartland and lower prices for all.  Evidently America was not ready to accept the word of AT&T-compensated telecommunications experts at the NAACP, the Special Dream Farm, the Shreveport-Bossier Rescue Mission and cattle ranchers a combination of T-Mobile’s spectrum and AT&T’s would ease the capacity crunch, bring 4G to Beaver, Oklahoma, and stop driving AT&T customers nuts with dropped calls and reception black holes.

How it usually works in Washington.

AT&T would have gotten away with their merger if it weren’t for those darned kids (consumers), the FCC and Justice Department ruining everything.

“The last significant spectrum auction was nearly 5 years ago now. And this FCC has made it abundantly clear that they’ll not allow significant [mergers and acquisitions] to help bridge their delays in freeing up new spectrum,” Stephenson complained. “So in the absence of auctions, our company and others in the industry have taken the logical step of entering into smaller transactions to acquire the spectrum we need to meet this demand. But even here, we need the FCC’s action and leadership, and unfortunately, even the smallest and most routine spectrum deals are receiving intense scrutiny from this FCC, oftentimes taking up to a year and sometimes longer before these are approved.”

Stephenson ignores the fact the FCC has rubber-stamped a number of wireless mergers over the past several years, which is why consumers no longer buy competitive service from Cingular, Alltel, Dobson Communications, Centennial Wireless, West Virginia Wireless, Unicel, Ramcell, or SureWest Wireless.  All of these former competitors are now a part of the nation’s two largest carriers AT&T and Verizon Wireless.  Even more impressively for the man in full denial, the FCC just quickly and quietly approved AT&T’s spectrum transfer purchase from Qualcomm.

“Now I hope I’m wrong, but it appears the FCC is intent on picking winners and losers rather than letting these markets work,” the chief executive said.

In other words, AT&T’s definition of letting markets “work” means letting them write their own laws governing the pesky concepts of antitrust, monopoly/duopoly market power, anti-competitive activity, etc.  AT&T has no problem picking winners and losers in the community-owned broadband front, lobbying its way through state legislatures trying to block new networks from being built, even while slapping usage limits on their own customers’ DSL and U-verse accounts because of “capacity” concerns.

In the wireless marketplace, Charlie Sheen would declare AT&T “winning,” considering it has achieved 1/3rd of the U.S. wireless market.  It wants more of course, even though Trefis, a market research firm, noted that had the FCC granted Stephenson’s wishes for three national carriers, AT&T, Verizon Wireless and Sprint “will control more than 90% of the U.S. wireless market, resulting in lower competition and higher prices for consumers.”

No problem there.

Stephenson also noted a lot of the company’s close friends were on their side (and handsomely compensated along the way we might add):

A lot of recent comments and speeches about certain members of this FCC suggest that they and not Congress should decide how spectrum auctions are conducted, including who can participate and what the conditions should be for participating. Meanwhile, we pile more and more regulatory uncertainty on top of an industry that is a foundation for a lot of today’s innovation*, making it difficult for all of us to allocate and commit capital. And in this industry, we all know capital investment equals jobs*. So the end result of this is we have a industry that is just really stuck in terms of creating real capacity*.

(*- except when community-based, publicly-owned networks are involved. They must be stopped at all costs.)

No matter that AT&T continues to sit on earlier spectrum acquisitions it continues not to use.  It only grudgingly agreed to roaming agreements with the company it preferred to dismantle altogether: T-Mobile.  In earlier, accidental disclosures, it was clear even before the merger and the newly-reticent FCC, AT&T preferred to raise prices, restrict service, and hang onto its profits instead of sufficiently investing them back into its network.  Verizon Wireless has a 4G network, no dropped-call-syndrome, fewer signal black holes, and no apparent spectrum panic attacks.

Part of Sprint's fact sheet opposing the merger deal.

AT&T bit off more than they could chew through, and now faces the humiliating prospect of paying off its gambling debts.  Only now, AT&T has effectively declared they are not going to pay for their costly mistake. Customers are.

Stephenson: Payback time.

The company introduced new, higher prices for its smartphone data plans this month, and intends to continue to increase prices and crack down on data use with speed throttles in 2012 and blame it on the “spectrum crunch”:

“In a capacity-constrained environment, usage-based data plans, increased pricing, managing the speeds of the highest volume users, these are all logical and necessary steps to manage utilization,” Stephenson said.

But AT&T’s chief executive also told shareholders repeatedly those increased prices were key to boosting company revenue and profits:

“We’ll expand wireless and consolidated margins. We’ll achieve mid-single-digit EPS growth or better. Cash generation continues to look very strong again next year. And given the operational momentum we have in the business, all of this appears very achievable and probably at the conservative end of our expectations.”

AT&T’s chief financial officer John J. Stephens put a spotlight on it:

In 2011, 76% of our revenues came from wireless and wireline data and managed services. That’s up from 68% or more than $10 billion from just 2 years ago. And revenues from these areas grew about $7 billion last year or more than 7% for 2011. We’re confident this mix shift will continue. In fact, in 2012 we expect consolidated revenues to continue to grow, thanks to strength in these growth drivers with little expected lift from the economy.

[…] We also continue to bring more subscribers onto our network with tiered data plans, more than 22 million at the end of the quarter, with most choosing the higher-priced plan. As more of our base moves to tiered plans and as data use increases, we expect our compelling [average revenue per subscriber] growth story to continue.

FAIL

AT&T announced Monday it has officially dropped its bid for Deutsche Telekom’s T-Mobile USA.

The company blamed regulator opposition for the failure of the merger, underestimating the Obama Administration’s tolerance for super-sized acquisition deals that could reduce competition and raise prices for consumers.

The real challenge for AT&T initially came not from the Federal Communications Commission, but from the U.S. Department of Justice which filed suit against the merger in August. FCC Chairman Julius Genachowski soon followed with statements that suggested the merger would have a difficult time at the Commission as well, and after a scathing report from FCC staffers was made public, Wall Street began to reduce the chances of the merger getting through to the single digits.

Had AT&T successfully merged with fourth-place T-Mobile, it would have easily become the nation’s largest and most powerful wireless provider, advancing beyond current leader Verizon Wireless.

The failure for AT&T will cost the company at least $4 billion in cash and spectrum it earlier agreed to give T-Mobile if the merger failed to complete.  Industry analysts say the real winner this year will easily be Verizon Wireless, which successfully accomplished its own spectrum acquisition by quietly buying unused spectrum from some of the nation’s largest cable companies.  With that spectrum now under Verizon’s control, AT&T has been reduced to signing new roaming agreements with an independent T-Mobile to share their GSM technology networks.  That will do little to alleviate AT&T’s dropped call problem in large cities, analysts say, because most roaming agreements specify sharing network resources only in areas where one carrier does not provide service.

Where U.S. Cell Phone Companies Stand Today

AT&T: AT&T still retains a considerable amount of unused wireless spectrum, but some of it is located on frequency bands that provide a lower quality of service indoors.  AT&T may have a difficult time finding new spectrum, because other carriers have signed partnership deals with most of the companies still holding unused frequencies. One of the largest holders of unused, warehoused spectrum is DISH Networks, and they’ve indicated no interest in selling.  DISH may partner with T-Mobile now that AT&T has exited.  That leaves AT&T with lobbying the government to speed up new spectrum auctions and working internally to expand their cell tower network to divide the traffic load.  It’s an expensive proposition, and several Wall Street analysts are advising their clients to dump AT&T stock.  Kevin Smithen, a Macquarie Capital USA Inc. analyst who downgraded AT&T to “sell” from “hold” last week advised AT&T was running out of options.

Verizon Wireless: Big Red remains in excellent shape to maintain its current market leadership position, particularly as it uses recently-acquired spectrum to bolster its 4G LTE network.  A UBS analyst was more direct: It will have 56 percent more 4G spectrum than AT&T in the top 10 markets and 46 percent more in the top 100, giving it a “meaningful competitive advantage.” Verizon has also cut a deal with cable operators that could reduce competitive pressure on Verizon’s landline/FiOS network from cable companies.  That fringe benefit comes courtesy of an agreement to market each others’ products to consumers.

Sprint: In addition to building its own 4G network, the company still has an agreement with Clearwire that allows Sprint to purchase the former company’s spectrum if it ever becomes available for sale.  With T-Mobile still obviously up for sale, Sprint could attempt its own merger, although it may be wary of stirring the same regulatory pot that got AT&T into trouble.  That leaves T-Mobile’s next buyer likely to be a regional cell phone company, a foreign firm entering the U.S. market, or an existing telecommunications company that decides a wireless division would be of benefit.

Extended Video Coverage

News of AT&T/T-Mobile Merger Failure Breaks

[flv width=”480″ height=”290″]http://www.phillipdampier.com/video/AP T-Mobile Merger Dead 12-19-11.mp4[/flv]

This report from the Associated Press informs consumers of the basics — the merger is no-go, leaving AT&T and T-Mobile as competitors, at least for now.  (1 minute)

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg ATT Pulls T-Mobile Bid After Regulator Opposition 12-19-11.mp4[/flv]

AT&T Inc. abandoned a $39 billion takeover bid for T-Mobile USA after underestimating opposition from regulators, thwarting its ambitions to become the biggest U.S. wireless carrier. AT&T will take a pretax charge of $4 billion to reflect cash payments and other considerations due to T-Mobile-owner Deutsche Telekom AG, the Dallas-based company said in a statement today. Peter Cook, Lisa Murphy, Adam Johnson and Sheila Dharmarajan report on Bloomberg Television’s “Street Smart.” (7 minutes)

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg Blair Says ATT’s T-Mobile Bid Was All About Spectrum 12-19-11.mp4[/flv]

Brian Blair, an analyst at Wedge Partners Corp., talks about AT&T Inc.’s decision to abandon a $39 billion takeover bid for T-Mobile USA and Apple Inc.’s victory in a final patent-infringement ruling that bans some HTC Corp. smartphones from the U.S. Blair speaks with Emily Chang on Bloomberg Television’s “Bloomberg West.”  (11 minutes)

[flv]http://www.phillipdampier.com/video/CNBC Baird on ATT T-Mobile Failure 12-20-11.mp4[/flv]

Apologists for AT&T on CNBC wring their hands over how wireless networks will get built out into rural areas now that the T-Mobile deal is dead. Will Power, R.W. Baird & Co, weighs in with a host who clearly cheerleads AT&T’s world-view.  (5 minutes)

[flv]http://www.phillipdampier.com/video/CNBC ATT Drops Bid for T-Mobile 12-20-11.mp4[/flv]

AT&T drops its $39 billion bid for T-Mobile USA, with Todd Rethemeier, Hudson Square Research.  AT&T’s talking points don’t fly with Rethemeier.  (4 minutes)

T-Mobile’s CEO Speaks About the Merger Failure

[flv]http://www.phillipdampier.com/video/CNBC Deutsche Telekom CEO on Failed T-Mobile Merger 12-20-11.mp4[/flv]

Rene Obermann, Deutsche Telekom CEO, explains why the merger between AT&T and T-Mobile USA should have gone through. “This transaction would have solved a number of industry issues,” he says.  Obermann is in friendly territory on CNBC.  (8 minutes)

The Impact on Sprint

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg Horan Sees T-Mobile Eventually Merging With Sprint 12-19-11.mp4[/flv]

Tim Horan, an analyst with Oppenheimer & Co., talks about AT&T Inc.’s decision to abandon a $39 billion takeover bid for T-Mobile USA, thwarting its ambitions to become the biggest U.S. wireless carrier. Horan speaks with Adam Johnson and Lisa Murphy on Bloomberg Television’s “Street Smart.” (3 minutes)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Bloomberg Gamcos Haverty Says Sprint an Endangered Species 12-19-11.flv[/flv]

Larry Haverty, portfolio manager at Gamco Investors Inc., talks about AT&T Inc.’s decision to abandon a $39 billion takeover bid for T-Mobile USA, and the outlook for Sprint Nextel Corp. and the wireless industry. Haverty speaks with Cory Johnson on Bloomberg Television’s “Bloomberg West.” (6 minutes)

 Will DISH Network Be AT&T’s Next Acquisition Target?

[flv]http://www.phillipdampier.com/video/CNBC Trading on ATT’s Failed T-Mobile Bid 12-20-11.mp4[/flv]

Shares of Dish Network up 9% in the aftermath of AT&T’s failed bid to acquire T-Mobile. Michael McCormack, Nomura telecom analyst, weighs in on whether Dish is the next target for AT&T.  (2 minutes)

Haven't we been here before?

History is best ignored when a Wall Street Journal columnist frames an argument in favor of strengthening the hegemony of Ma Bell, and darn ‘ole past precedent gets in the way of the writer’s “facts.”

Gordon Crovitz is a media and information industry adviser and executive, including former publisher of The Wall Street Journal, executive vice president of Dow Jones and president of its Consumer Media Group.  But today he’s unofficially, unabashedly AT&T.

In a column published this week, Crovitz hosts a whine and cheese festival on behalf of poor and abused AT&T, whose multi-billion dollar takeover of T-Mobile is in tatters. Crovitz places the blame squarely on the government for ruining everything:

How soon we forget the risks of overregulation: Last week, the Federal Communications Commission flexed the same muscle it once used to quash market forces in the phone industry to quash market forces in the wireless industry.

Today’s AT&T, a spinoff from the original, needs more spectrum to catch up with market leader Verizon, also a Ma Bell descendant, to support iPhones, Androids and other devices that feature video and sophisticated apps. It wants to buy T-Mobile, a division of a German company, which doesn’t have the resources to compete in the United States on its own. But the FCC decided to apply antitrust theory from the industrial era and claims to know better than wireless companies how they should operate their businesses.

AT&T’s proposed acquisition is best understood as a private-sector solution to a government-created problem. The FCC has not been able to get Congress to approve auctions to reallocate spectrum to wireless from less valuable uses. AT&T wants T-Mobile’s bandwidth so it can extend the latest fourth-generation network to 97% of the country from 80% and improve its spotty service in congested areas.

Under laws dating to the 1920s, the FCC gets to decide if a merger is in the “public interest,” a vague standard for top-down decision making. Government is the last institution in this era of fast technological innovation to act as if it has the information and power to dictate how change happens.

Crovitz apparently prefers AT&T and its phone pal Verizon Wireless dictate how “change happens,” because the two companies control the vast majority of wireless telecommunications in the United States.  Both also charge near-identical prices for near-identical levels of service.  AT&T & VZW are completely comfortable with that status quo, especially if disruptive competitor T-Mobile is dealt with in the usual industry manner (merger/buyout).

There is nothing vague about the FCC report that condemns the merger of AT&T and T-Mobile for the anti-competitive monstrosity it represents.  In hundreds of pages Crovitz evidently never read, a careful and credible argument against the deal was laid out for all to examine.  That evidence is far more persuasive than AT&T’s heavily-redacted filings the public was not authorized to see (for ‘competitive reasons’), and a multi-million-dollar-a-holler public relations distortion strategy based on hollow promises.

Playing Catch-Up With Verizon Wireless?  Hardly.

AT&T hardly needs to “catch up” with Verizon Wireless.  Both companies own wireless spectrum they have warehoused for “future use.”  As a backdrop to the merger, FCC Chairman Julius Genachowski has already indicated the agency is hard at work carefully re-allocating spectrum to make more room for wireless services.  The “bandwidth crisis” AT&T talks about is a convenient argument for a merger, until you realize T-Mobile’s mostly-urban wireless network won’t help AT&T achieve its goal of rural wireless expansion.  T-Mobile has never provided service in rural America and never will.

Crovitz attempts to leverage Verizon Wireless’ recent deal with America’s largest cable companies as an argument for the AT&T and T-Mobile merger, suggesting that deal was a game changer.  What goes unsaid is the fact AT&T could have pursued that deal for themselves.  Did they?  No.  Despite AT&T’s public relations spin, the proposed merger with T-Mobile is much more than a spectrum acquisition. As the FCC and the Justice Department have argued, this merger is about ridding AT&T of a competitor willing to offer more services at lower prices.  That forces AT&T to respond in kind to compete, and consumers have benefited greatly from that competition. Verizon Wireless is hardly competition at all considering both companies price services nearly identically.  Beyond that is Sprint, already saddled with the financial albatross Clearwire and questions about its long term viability in a duopolistic wireless market.

Crovitz is wrong on his other “facts” as well:

Deutsche Telekom is hardly short on cash.  The company has plenty of resources and could bolster T-Mobile USA to compete if it saw fit.  It doesn’t, preferring to focus on its more lucrative European markets.  Instead of selling the operation on the open market to other players, which could include foreign providers interested in competing in the high-priced American market, it elected to be courted by AT&T.

Overconfident AT&T

Henry De Lamar Clayton, Jr.: Author of the Clayton Act

The merger illustrates AT&T’s unparalleled level of overconfidence it could deal with regulators and consumer groups who would certainly object to the deal.  The company has since spent millions it could have used to improve its network on campaign-contribution-fueled support building on Capitol Hill, a shameless dollar-a-holler astroturf campaign that pays off non-profit groups to sing the deal’s praises, and an expensive ad campaign to sucker Americans into thinking reduced competition will somehow deliver lower prices and better service.

Even former Republican FCC Chairman Kevin Martin would have likely paused over such an obvious monopoly-building operation.  The Obama Administration’s FCC chairman — Julius Genachowski —  while often too timid for our tastes, at least knows when it is time to join the chorus of opposition.

The FCC doesn’t pretend to tell AT&T how to run its business.  It does, however, serve the public interest by providing checks and balances to unfettered corporate power.  While the Wall Street Journal‘s world view of capitalism would have been favored by the most egregious robber barons, history has taught us that when big corporations get a stranglehold on vital industries, the entire economy can suffer.

Crovitz would have us ignore the massive corporate abuses of 100 years ago that eventually provoked Congress into trust-busting legislative reform, breaking up the monopolies and oligopolies that presided over the railways, early telecommunications networks, and industrial raw materials like oil and steel.  Restrained competition brought monopoly prices and blockades against would-be competitors.  What was true then is still true now, only the technology has changed.

In 1911, the economy was powered in part by railroads, which transported goods and raw materials.  Telecommunications networks like the telegraph and early telephone helped conduct business and coordinated the movement of goods.  In 2011’s growing digital economy, telecommunications increasingly represents the railroads, telegraph, and telephone all combined-into-one.  Some of America’s richest tech companies depend on broadband and communications to fuel demand for their products.  Allowing AT&T to control the largest part of that pipeline could be disastrous to everyone but that company and their shareholders.

History Repeats Itself

In 1914, the Clayton Act was passed to put a stop to increasing anti-competitive activity and abusive market tactics.  Amazingly, the problems being solved a century ago are back with a vengeance today, all thanks to the endless drumbeat for deregulation, which has fueled mergers, acquisitions, and increased concentration of market power.  That Act cracked down on:

• Price discrimination: selling products and services at different prices to similarly situated buyers;
• Tying and exclusive-dealing contracts: sales on condition that the buyer sign exclusive contracts that force an end to dealing with the seller’s competitors;
• Corporate mergers: acquisitions of competing companies to reduce competition; and
• Interlocking directorates: Boards of directors of competing companies, packed with common members.

Today’s laissez-faire attitude towards government checks and balances helped provoke the Great Recession, corporate scandals of epic proportions, and a revolving door in Washington where regulators end up working for the companies they used to regulate. Just ask former FCC chairman Michael Powell. Three years ago he worked for us.  Today he works for Big Cable’s largest lobbying group — the National Cable & Telecommunications Association.  FCC Commissioner Meredith Attwell Baker went to work for Comcast shortly after green-lighting their super-merger with NBC-Universal.

It’s All About the Money. Always.

The only thing stopping AT&T from providing wireless nirvana to rural America is its own unwillingness to spend money on behalf of customers to upgrade its network.  The company claims it didn’t see the value of spending nearly $4 billion needed to deliver expansive 4G service, but suddenly had no trouble at all finding nearly ten times that amount to purchase T-Mobile USA.

Did AT&T suddenly win PowerBall?

AT&T saw crushing a competitor Job #1.  Central Idaho’s 4G service could wait.

Crovitz later notes AT&T “was unusually blunt” criticizing the FCC report, a classic case of protesting too much.  The company got caught with its rhetorical pants down, with a series of evolving arguments for a deal that never made the first bit of sense once you began to dig deeper into their case.

In the end, Mr. Crovitz wants you to blame Big Government for AT&T’s pervasive dropped-call problem that its competitors don’t seem to have.

It’s not the company that owns and runs the network, it is that Obama and his nasty henchmen at the FCC who are responsible!  Who knew?

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/Bloomberg FCC Says ATT Failed to Show Public Benefit of Merger 11-30-11.mp4[/flv]

Bloomberg News reports the FCC found AT&T failed to demonstrate any real public benefit of its merger with T-Mobile USA.  (2 minutes)

AT&T has once again scored dead last in a nationwide survey (subscription required) of wireless providers commissioned by consumer magazine Consumer Reports.

Among national coverage carriers, Verizon Wireless again scored the highest, but not highest overall when including smaller independent and regional carriers.  Top honors were won by Consumer Cellular, a relatively small company in Portland, Ore. that ironically depends on bottom-rated AT&T’s network to deliver service.  What sets Consumer Cellular apart from other carriers is its near-exclusive focus on selling phone service to America’s senior population.  Working with groups like the AARP to market simple cell phones to older, less technologically-comfortable customers, over 85% of Consumer Cellular customers are over the age of 50.  The vast majority are occasional cell phone users, primarily using cell phones to make and receive calls.

Regional carrier U.S. Cellular, which used to top Consumer Reports‘ surveys, scored second.  Most U.S. Cellular customers are in the Pacific Northwest, Midwest, and parts of the East including New England.  CREDO, better known under its former name Working Assets Wireless, scored third.  It provides service over the Sprint network.

Among major-sized providers, only Sprint managed to escape the poor ratings for value received by AT&T, Verizon, and T-Mobile.  Also ironic, T-Mobile continued to score better than AT&T, which is still working feverishly to acquire the German-owned carrier.

AT&T also did poorly in delivering reliable voice and data services, according to respondents.  Customer service was also deemed lacking.

Consumer Reports

“Our survey indicates that subscribers to prepaid and smaller standard-service providers are happiest overall with their cell-phone service,” said Paul Reynolds, electronics editor for Consumer Reports. “However, these carriers aren’t for everyone. Some are only regional, and prepaid carriers tend to offer few or no smart phones.”

Consumer Cellular being a prime example. 

Consumer Reports surveyed 66,000 Americans for its 2011 Wireless Satisfaction Survey and found little had changed from last year.  The consumer magazine recommends consumers who don’t make or receive a lot of calls or are not addicted to wireless data services consider a prepaid plan instead of a two-year contract.  Competition in the prepaid arena continues to force prices down, and most providers offer month-to-month service plans that can be automatically renewed through a checking account or credit card, eliminating any hassle purchasing “top up” cards.

Most of the prepaid providers resell service provided by AT&T, Sprint, or Verizon Wireless.  Two that don’t: MetroPCS and Leap Wireless’ Cricket, received little regard from those surveyed.  MetroPCS scored second from the bottom and Cricket didn’t make the ratings at all.  Two prepaid plans to consider first: TracFone, excellent for occasional calling, and Straight Talk, sold by Wal-Mart — better for those who like to talk a lot on their phones.  If you don’t need the sexiest handset around, Stop the Cap! also recommends Page Plus, which relies on the Verizon Wireless network, especially if you don’t need a lot of data services.