A coalition of neighborhoods opposed to the installation of more than 700 4-foot tall metal cabinets across the city of San Francisco have filed suit against AT&T in Superior Court demanding the city follow its own environmental codes and conduct an environmental impact assessment.

The suit comes in response to last month’s close 6-5 vote by the Board of Supervisors permitting AT&T to install up to 726 boxes on the public-right-of-way — typically street corners and sidewalks — to support expansion of its U-verse television, broadband, and phone service.

San Francisco Beautiful, San Francisco Tomorrow, the Potrero Boosters Neighborhood Association, the Dogpatch Neighborhood Association, and the Duboce Triangle Neighborhood Association are all parties to the lawsuit filed Wednesday, which calls the boxes graffiti targets, a safety problem for traffic and pedestrians, and just plain ugly.

Milo Hanke, past president of San Francisco Beautiful, accuses the city of ignoring its own rules to give a green light to AT&T.

“We really don’t want to sue, but we are left with no choice when the city refuses to uphold its own environment codes and is about to give away our sidewalks for the benefit of a private company without objective review,” Hanke told the San Francisco Chronicle.

Long time observers of city politics are frankly surprised AT&T won permission for the controversial boxes.

“It wasn’t that long ago that something like this would have been stopped dead in its tracks in [one] environmental review [after another],” said KCBS-TV reporter Phil Matier.  “But this year, whether it’s a change in the tone for business or for jobs it actually got the six votes needed, and that is going to be interesting as this plays out in an election year in San Francisco.”

Lane Kasselman, an AT&T spokesman countered: “This is about choice and competition for San Francisco residents. It’s about new, better technology that enhances peoples’ lives. AT&T thanks the San Francisco Board of Supervisors for supporting the deployment of U-verse throughout San Francisco. We’ve already started construction and are working as quickly as possible to bring next generation IP network services to every block and household that wants it.”

But Hanke thinks the city has gone too far for the benefit of AT&T at the expense of local residents.

“This is a private enterprise with a benefit to private parties,” Hanke told KCBS.  “Why should the public be subsidizing a Dallas-based corporation, and having to look at these ugly boxes in the process.”

Sean Elsbernd, who serves on San Francisco’s Board of Supervisors personally thinks the boxes are a great idea, suggesting Comcast needs competition.

“I have a suspicion that four or five months after they are in, people aren’t going to notice them anymore,” Elsebernd said.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/KCBS San Francisco Groups Sue ATT 8-24-11.mp4[/flv]

KCBS in San Francisco covers the continuing controversy over AT&T’s 4-foot tall utility boxes and the lawsuit designed to stop or delay their installation.  (3 minutes)

[flv]http://www.phillipdampier.com/video/KBAK Bakersfield Homeowner fights utility project in her front yard 5-27-10.flv[/flv]

KBAK in Bakersfield shows what happened when AT&T brought their lawn refrigerator-sized boxes to that city in the spring of 2010 — one woman woke up and found AT&T crews tearing up her yard, without any notice, as part of a major construction project.  (3 minutes)

Cornell University students pay an average of $37,000 a year (before housing, student fees, and other expenses) to attend one of America’s most prestigious universities.  When they arrive on-campus, it doesn’t take long to learn the college has one of the nastiest Internet Overcharging schemes around for students deemed to be using “too much Internet.”

For years, Cornell limited students to less than 20 gigabytes of Internet usage per month, only recently increasing the monthly allowance to 50GB this summer.  Cornell’s overlimit fee starts at $1.50 per gigabyte, billed in megabyte increments.  Now some students are pushing back, launching a petition drive to banish the usage limits that curtail usage and punish the 10 percent of students who exceed their allowance.

Christina Lara, originally from Fair Lawn, N.J., started the petition which has attracted nearly 300 signatures over the past few weeks.

“Cornell students, along with students across the world, rely on the Internet to pursue their academics, independent research, and leisure activity,” Lara writes. “We should not be subjected to charges for our Internet usage, particularly because our curriculums mandate we use the Internet. Despite this, Cornell University continues to adopt NUBB (Network Usage-Based Billing), which charges students for exceeding the 50 gigabyte per month ‘allowance.'”

Lara incurred bills as high as $90 a month in overlimit fees last year, thanks to regular use of Netflix and Skype for online video chats with friends and family back home.

Internet fees for on-campus housing are included in the mandatory student services fee.  Although Time Warner Cable has a presence on campus, most residence halls don’t appear to be able to obtain service from the potential competitor, which sells unlimited Internet access in the southern tier region of New York where Cornell is located.  Instead, Cornell students on campus rely on the university’s wireless and Ethernet broadband network, and DirecTV or the university’s own cable TV system for television.

The apparent lack of competition makes charging excess-use fees for Internet usage easy, critics of the fees charge.

“It’s much easier if you live off-campus or in one of the apartment complexes students favor,” says Neal, one of our readers in the Ithaca area who used to attend Cornell.  “The only complication is getting access to the University’s Intranet, which is much easier if you are using their network.”

Neal says Verizon delivers landline DSL to off-campus housing, but not on-campus.  Because the service maxes out at 7Mbps, most who have other options sign up for Time Warner Cable’s broadband service instead.

“It’s cheaper on a promotion and much faster, and it’s still unlimited,” Neal says. “Hasbrouck, Maplewood and Thurston Court were the only residential buildings that offered the chance for Time Warner Cable on-campus, and only if the wiring was already in place.”

Neal notes many apartment complexes off campus have contracts with Time Warner Cable, which means cable TV and basic broadband are included in your monthly rent.  Some Cornell students who live on or near campus try to make do with a slower, but generally free option — the Red Rover Wi-Fi network administered by the University.  Others reserve the highest usage activities for computers inside university academic buildings, where the limits come off.

Lara complains Ithaca, and the southern tier in general, is hardly an entertainment hotbed, making the Internet more important than ever for leisure activities.

“If Cornell was situated in a major metropolitan area with a vast nightlife that could accommodate the interests of most, if not all, our undergraduates, then many Cornellians wouldn’t be so inclined to stay in their rooms and get on the Internet,” Lara says. “But that’s not the case. Cornell’s Greek life dominates the social scene, making ‘nightlife’ a dividing factor in the community.”

Tracy Mitrano, Cornell’s director of information-technology policy, told The Chronicle the vast majority of students will never hit the cap, and those that do cannot be charged more than $1,000 a month in overlimit fees, regardless of use.  Those that do exceed the limit typically find a monthly bill for “overuse” amounting to $30.

“The approach that Cornell uses offers transparency and choice,” said Mitrano. She noted that Cornell provides students with clear information regarding their network usage by alerting them by e-mail when they are about to hit the limit and by setting specific rates for overuse fees.

“The choice seems to be using the university network or moving off-campus to buy Verizon or Time Warner Cable broadband to avoid the usage cap,” counters Neal. “I am not sure their ‘choice’ argument flies if students don’t have the option of signing up for Road Runner in their rooms on their own, bypassing the Internet Overcharging altogether.”

Both Neal and Gregory A. Jackson, vice president of Educause, seem to be reaching consensus on whether or not universities should be charging students for Internet separately from room and board.  Jackson notes it is a discussion being held at an increasing number of universities.  Neal thinks having a wide open access policy to deliver competition could solve this problem in short order, and students should make the decision where to spend their broadband funds themselves.

“If Cornell’s IT bureaucracy faced unlimited-access competition from Verizon and Time Warner Cable, do you think they’d still have a 50GB usage cap, considering only a small percentage of their captive customers exceeded it,” Neal asks.  “Of course not.”

[Thanks to PreventCAPS for the story idea.]

Back in May 2010, Stop the Cap! launched a debate with a few Wireless Internet Service Providers (WISPs) that provide largely rural America with wireless access to the Internet over long range Wi-Fi networks.  The debate got started when Matthew Larsen, who runs the Wireless Cowboys blog, announced the arrival of an Internet Overcharging scheme at his WISP — Vistabeam, which serves residents in rural Wyoming and Nebraska.

WISPs are being increasingly challenged by the changing tastes of Internet customers, who are gravitating towards broadband multimedia content, saturating limited capacity networks and forcing regular infrastructure upgrades to keep up with increasing usage demands.  Unlike larger providers, many WISPs are independent, family-run businesses that lack easy access to capital and resources to rapidly respond to demand, especially when most have a rural customer base that numbers in the hundreds or thousands.

That’s one of the reasons why Stop the Cap! has not been as harsh on these providers when they implement usage limit schemes on their customers.  Because WISPs provide service where cable and phone companies usually don’t bother to serve, these wireless providers are the only option beyond satellite Internet, which we regularly label “fraudband” for claims of broadband speeds that are rarely delivered.  Still, we were not impressed last year with some of Larsen’s language about what his usage caps were intended to do (underlining ours):

I feel that these caps are more than generous, and should have a minimal effect on the majority of our customers.   With our backbone consumption per customer increasing, implementing caps of some kind became a necessity.    I am not looking at the caps as a new “profit center” – they are a deterrent as much as anything.    It will provide an incentive for customers to upgrade to a faster plan with a higher cap, or take their download habits to a competitor and chew up someone else’s bandwidth.

Ouch.

It’s been over a year, and Larsen is back with an editorial patting himself on the back for an Internet Overcharging success story well-implemented:

We have never raised prices on our services.    We still have a customer note on the wall that reads “Your bill was the only one I got this month that DIDN’T go up.   Thank you!”     I would have a hard time raising prices on this person because of their neighbors that are downloading 20x as much.   Usage Based Billing is a much fairer way to go, especially when the provider faces so much reinvestment cost to accommodate the heavier users.   After the first year of implementation, I am very glad that we took the time to implement it and intend to use the revenue to build a better network for all of our customers.

Larsen is also upset with those who believe in the concept of unlimited Internet:

Operating a broadband network is not free, and it is not a low-maintenance business.   I have a group of dedicated employees and subcontractors that have spent a lot of late nights and early mornings away from their families to build and maintain our network.   Anyone who thinks that unlimited broadband is a God given right should be forced to spend a few days in my lead tech’s shoes, getting a good look at what a broadband provider has to do to build a network and keep it running.

Larsen, like other WISPs are confronting the reality that Internet usage is on the upswing, and while we sympathize with the challenges faced by Vistabeam and other WISPs, his statements do not apply to every broadband network around.  And frankly, an increasing number of customers simply aren’t interested in Larsen’s challenges, especially if another provider can deliver service more cheaply and efficiently.  Vistabeam better hope nobody does, because their prices are simply not competitive if just about any other provider manages to work their way into his territory.

Vistabeam prices start at $29.95 a month for 384kbps/128kbps service with a monthly usage limit of 10GB.  Exceed that and you will pay an additional $1 per gigabyte.  Customers who need more speed pay dearly for it.  A tier providing 4/2Mbps service will run you $99.95 a month with a 60GB monthly usage allowance.

As of late, Larsen has been railing against the U.S. Department of Agriculture over recent broadband stimulus awards designed to improve coverage of broadband Internet in the same rural regions of the country Vistabeam serves.  He’s upset the USDA has awarded a $10.2 million infrastructure loan to the Hemingford Cooperative Telephone Company, which provides service in western Nebraska under the name Mobius Communications.

Larsen speaks highly of the fact Vistabeam delivers service in the absence of government funding or stimulus. But average consumers are not likely to care when they compare prices and consider the fact Mobius doesn’t appear to limit customers’ usage.

Mobius DSL Prices:

• 500kbps – $35.00
• 1.5Mbps – $40.00
• 3Mbps – $50.00
• 5Mbps – $60.00 (Currently available in Alliance and Chadron.)

Mobius charges effectively half the price Vistabeam charges, and offers faster tiers of service in some areas, without fear of overlimit fees.  It’s also important to recognize the “award” was actually a “loan,” which must be repaid.  Larsen seems less upset with the fact there are broadband stimulus programs than with the reality industry lobbying has effectively cut out many Wireless ISPs from standing any chance of winning one.

I get especially frustrated by loan awards like this one because I have operated two ISPs that have had to compete directly with Mobius and did not have access to any federal grant or loan programs.   The USDA Broadband and Loan programs are essentially only available to [regional phone companies].   When I made inquiries into the programs several years ago, I found that they would only loan to a single recipient in a region so that they were not funding competing projects.

For Stop the Cap!, our constituents are consumers interested in obtaining the best possible broadband service at the best price.  Larsen’s views, understandable from the perspective of a business owner, would leave a number of consumers paying effectively double the price for usage-limited broadband. That would, however, satisfy a business argument that self-funded private providers should not face competition from other providers that can extend faster, unlimited DSL, cable, or fiber service with low interest loans.

Wouldn’t a better solution be to form a coalition to force open the same beneficial loan programs to Wireless ISPs who can more readily and affordably build up their networks and ease the Internet Overcharging that too often comes along for the ride?  We’re not accusing Larsen of gouging his customers for fun and profit, but we would like to see WISPs like Vistabeam develop win-win strategies that deliver success for their innovative efforts and lower priced, faster service for their customers.

The alternative may be the eventual arrival of those rural phone companies, increasingly equipped to deliver faster and cheaper service to Vistabeam’s current customers, eventually spelling disaster to that company’s business plan.  It has happened before.  Anyone remember the “wireless cable” industry that delivered a few dozen cable channels over microwave signals?  That’s a service whose time came and went, largely replaced with satellite television and rural telephone cable TV, better equipped to provide the kind of service consumers actually wanted, but wireless cable was ill-equipped to provide.

A year after Frontier Communications assumed control of Verizon’s assets in the Pacific Northwest, customers are fleeing the company’s inherited fiber-to-the-home service FiOS, after announcing a massive (since suspended, except in Indiana) 46 percent rate hike for the television portion of the service.  A new $500 installation fee has kept all but the bravest from considering replacing customers who have left for Comcast and various satellite TV providers.

Frontier’s second-quarter financial results revealed the company has lost at least 14,000 out of 112,000 FiOS TV customers in the region (and in the Fort Wayne, Ind. market, where the service is also available.)

Early reaction to the original rate hike announcement started customers shopping for another provider — mostly Comcast, which competes in all three states where Frontier FiOS operates.  Even after the rate hike was suspended in some markets, intense marketing activity by Frontier to drive customers towards its partnership with satellite provider DirecTV managed to convince at least some of those customers to pull the plug on fiber in return for a free year of satellite TV, although an even larger number presumably switched to the cable competition.

D.A. Davidson, a financial consulting firm, told The Oregonian the message was clear.

“They would love to get rid of the FiOS TV customers,” Donna Jaegers, who follows Frontier, told the newspaper. “They’re programming costs are very high compared to the rates that they charge.”

Jaegers said Frontier Communications completely botched their efforts to transition customers away from FiOS TV towards satellite, because most of those departing headed for the cable competition, attracted by promotional offers and convenient billing.

Many others simply don’t want a satellite dish on their roof, and are confounded about Frontier’s message that satellite TV is somehow better than fiber-to-the-home service.

Frontier admits its FiOS service is now underutilized, but claims it will continue to provide the service where it already exists.

Frontier Claims Its DSL Service is Better Than Cable Broadband

Frontier’s general business plan is to provide DSL service in rural areas where it faces little or no competition, and most of Frontier’s investment has been to upgrade Verizon’s landline network to sustain 1-3Mbps DSL service, for which it routinely charges the same (or more) for standalone broadband service that its cable competitors charge for much faster speeds.

But Frontier Communications CEO Maggie Wilderotter says their DSL service is better than the cable competition.

“A key differentiator between our network and cable competition is that you consistently get the speed you pay for,” Wilderotter told investors on a conference call. “There’s no sharing at the local level. High demand for bandwidth-intensive applications like video are putting pressure on all wired networks. To that end, we want to make sure that we have more than enough capacity to satisfy the expectations of our customers. We’re spending capital in all parts of the network with specific emphasis in the middle mile, which will enable us to consistently deliver a quality customer experience for our customers of today and tomorrow.”

Frontier Communications CEO Maggie Wilderotter defends anemic broadband additions during the 2nd quarter of 2011 and tries to convince investors DSL service is better than the cable competition. August 3, 2011. (4 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Netflix Traffic Represents 25% of Frontier’s Broadband Traffic; Online Video — 50%

Wilderotter admitted Frontier’s broadband network is overcongested in many regions, which she partly blamed for the company’s anemic addition of new broadband customers.

She noted Netflix, which has itself consistently rated Frontier the worst wired broadband provider in the country for being able to deliver consistent, high quality access to their streaming service, represents one-quarter of all capacity usage of Frontier’s broadband network.

“Video is about 50 percent,” Wilderotter added.  In an investor conference call, she explained network congestion in more detail:

“In [the second quarter], we had many areas with unacceptable levels of network congestion, which negatively impacted our growth in net high-speed additions.” Wilderotter said. “We believe all of the major congestion issues will be fixed by the end of [the third quarter], and that will enable us to drive higher growth and net broadband activation in [former Verizon service areas.]”

“What we decided to do is to go for fixing the middle mile, which is the [central office] to the […] neighborhood and to expand that capability by 100-fold. And then also, expand from the [central office] out to the Internet and make sure that we have huge capacity to deliver and receive capability to our customers. So when we sell 6 meg, 10 meg, 25 meg, 50 meg, the customer gets what we sell them and that was extremely important for us.”

“So what we did is in the areas where we saw the congestion increase based upon usage increases, and we’ve built new households. We’ve held off on marketing to a lot of those new households until we fixed the congestion problem because we didn’t want to exacerbate what we had already. We’ve shifted capital in terms of the mix of how we’ve spent capital to fix this problem. I’d say we’re probably 75% of the way there in fixing congestion. This quarter is another big quarter for us to get all of the major issues out of the network, which will allow us in the back end of this quarter through the fourth quarter, to really start pushing the penetration levels where we’ve built new households in the areas that have been affected by congestion.”

Frontier Introduces Line Bonded DSL — Two Connections Can Improve DSL Speeds

Frontier Communications also announced the introduction of Frontier Second Connect, a DSL line bonding product that delivers two physical connections to a single household.  Line bonding allows for improved broadband speeds.

“Second Connect gives our customers two exclusive connections in one household, and we’re the only provider in every market that can do that,” Wilderotter claimed.

In more urban markets, Frontier’s DSL speeds are woefully behind those available from most cable competitors.  Frontier has begun upgrading some of their legacy service areas and retiring older equipment in an effort to improve the quality of service.

“The real initiatives that we have underway are called middle mile, interoffice facilities, as well as some of the more aged equipment that’s in the network,” said Dan McCarthy, Frontier’s chief operating officer. “So as we go through, there’s about 600 projects that are underway today that will improve both the speed and capability.”

“We’ve inherited markets that there has not been upgrades to capacity in these markets for many years and fixes to the networks, plus the elements as the DSLAMs, even the DSLAMs themselves are old,” Wilderotter said. “So we’re replacing network elements in the neighborhood. We’re splitting them and moving customers to other network elements to make sure that they have a good experience.”

Frontier executives answer a question from a Wall Street banker about DSL speeds and congestion problems on Frontier’s broadband network. A detailed technical discussion ensues as the company tells investors it is redirecting some capital to fixing Frontier’s overcongested network. August 3, 2011. (5 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Frontier Still Losing More than 8% Of Its Landline Customers Every Year

Despite broadband rollouts and incremental improvements, more than eight percent of Frontier’s landline customers disconnect service permanently every year.  Frontier called that disconnect rate an improvement over its line losses last year, which exceeded 11 percent in some areas.

“Total line losses improved to an 8.6% year-over-year decline, our lowest level since taking ownership when the pro forma loss rate was 9.7%,” reported Wilderotter. “We also improved [the] loss rate [in former Verizon service areas to] 10.1% compared to 11.4% in Q2 2010.”

Most of Frontier’s departing customers are switching to cable providers and/or cell phone service.

(Update 8-23-2011: We are now told in many areas, Frontier’s Second Connect service is not actually a bonded DSL product, but rather a “dry loop” second DSL line that carries the same speed as your primary line.  Presumably, household members can divide up who uses which DSL circuit for Internet access.  The charge for Second Connect in ex-Verizon service areas is $14.99 per month plus a second mandatory monthly modem rental fee of $6.99. If the web link does not work, it means the service is not available in your service area.)

On Friday, the tech-wireless media was in a frenzy over news one of AT&T’s law firms accidentally posted an un-censored copy of “highly confidential information” regarding its merger proposal with T-Mobile on the Federal Communications Commission website.  Although nobody seems to have a complete copy of the notorious filing to share (it was quickly pulled down after Wireless Week — an industry trade publication — blew the whistle), it turns out if you are willing to plow through AT&T’s periodic publicly-available document dumps, you don’t really need “top secret” information to realize how AT&T is trying to sucker America into accepting its competition-busting merger deal with T-Mobile USA.

What AT&T is Telling the FCC’s Lawyers But Hiding from You

As part of the approval process, the FCC sent AT&T a significant homework assignment, demanding answers to some detailed questions about the justification for the merger, how AT&T intends to use both its existing and newly-acquired wireless spectrum from both Qualcomm and, presumably, T-Mobile, and what specific plans the company has to expand its next generation wireless data network to rural America.

Last week, we learned from the unredacted filing that AT&T will pay $39 billion for T-Mobile to expand a 4G network that AT&T refused to spend $3.8 billion dollars to build themselves.  You read that right.  AT&T says it can expand its own 4G network to an additional 55 million people for just under $4 billion, or buy T-Mobile for nearly $40 billion to accomplish the same thing.

And what exactly does AT&T get from T-Mobile?  A largely urban network running a 4G network that goes nowhere near the 55 million largely rural Americans AT&T claims it intends to serve if the merger wins approval.

So scratch AT&T’s claim that the acquisition of T-Mobile’s network will do anything directly for the rural Americans T-Mobile never directly served.

AT&T’s biggest selling point is that its acquisition of T-Mobile will allow it to reach “97 percent of America” with its improved 4G network:

Because of the spectrum gains and the overall economic benefits resulting from the transaction, senior management made a business judgment that the merger with T-Mobile USA allowed AT&T to expand its LTE build-out to 97 percent of the population. These economic benefits include incremental reductions in cost due to the addition of T-Mobile USA resources, greater scale economies, such as higher volume discounts on handsets and equipment, a larger customer base, and the expectation of a higher take-rate for its LTE service. In addition, the transaction will enable AT&T to re-purpose its existing capital budget allocated to spectrum acquisitions to be allocated for other uses. Overall, the scale and scope of the larger combined wireless business will permit the additional capital investment to be spread over a larger revenue base than would be the case absent the merger.

But the unredacted, “highly confidential” part of the same document exposes important facts AT&T didn’t want the public to know:

“AT&T senior management concluded that, unless AT&T could find a way to expand its LTE footprint on a significantly more cost-effective basis, an LTE deployment to 80 percent of the U.S. population was the most that could be justified,” wrote AT&T counsel Richard Rosen.

In other words, by collecting T-Mobile customers’ monthly payments, AT&T can utilize that additional revenue, earned mostly from T-Mobile’s urban customer base, and use it to pay for rural cell sites the company itself won’t spend the money to upgrade to achieve that 97 percent coverage.

You can read between the lines of AT&T’s public statements and come to the same conclusion Rosen made confidentially, but it helps when the company’s own lawyer says it out loud.

Karl Bode from Broadband Reports thinks there is something familiar about that 97 percent figure.  It just so happens to be Verizon’s existing 3G coverage area.  Verizon pointed to their more robust 3G coverage in a major ad campaign that began just prior to the Christmas shopping season in 2009.  It did enough damage to bring AT&T to court in an effort to stop the ads, and reacquainted America with Luke Wilson, who threw postcards on a floor map touting AT&T’s more robust, but considerably less speedy, last-generation EDGE data network.

Verizon completed their expansive 3G network without the benefit of a merger and is in the process of building their 4G LTE network on their own as well — capable of eventually reaching the majority of Americans without taking out the fourth largest wireless carrier in the country.  AT&T, on the other hand, spent its time in court and handing Wilson more postcards to throw  instead of investing appropriately in its network over the last three years.

AT&T’s Document Dump: More than 1 Million Documents Bury FCC and Justice Lawyers

Another important revelation that doesn’t require the accidental disclosure of redacted data is the fact AT&T is burying government lawyers at both the FCC and Department of Justice in virtual paper.  The company admits to sending at least 1.2 million documents to Justice alone.  Reviewing AT&T’s filings with the FCC exposes the use of the old legal trick of burying your opponents in paper, hoping they will miss important documents that could call into question the veracity of the company’s arguments.

With the FCC, AT&T’s lawyers love to use appendices and attachments as virtual dumping grounds, adding copies of virtually any company document that contain “key words” or “search terms” in response to the Commission’s questions.

Take this Q&A exchange:

FCC Question: Provide all plans, analyses, and reports discussing: (a) spectrum requirements for all band segments; (b) the average data transmission speeds that the Company expects customers will be able to obtain; (c) actual and forecasted traffic and busy hour analyses, (d) total data tonnage; (e) capacity utilization rate; (f) vertically integrated operations; or (g) other technical or engineering factors required to attain any available cost savings or other efficiencies necessary to compete profitably in the sale or provision of any relevant product or any relevant service.

AT&T’s Answer: To respond to this request, AT&T conducted key word searches of custodian files as detailed in the tables appended as Exhibit A. Documents responsive to this request are included in AT&T’s production.

It’s the equivalent of putting the phrase “data transmission speeds” into a search engine and then attaching every document that appears in the results and calling it “your answer,” relevant or not.

AT&T used the same approach in answering the FCC’s questions about how the merger would specifically bring improved 4G service to areas without service today, what impact the merger will have on roaming agreements and wholesale access to the combined AT&T/T-Mobile network, and even in response to a basic question about plans for targeting particular competitors, customers, or customer segments after the merger.

Reality: AT&T Doesn’t Care About T-Mobile’s Network

So what else does AT&T win from a nearly $40 billion investment in T-Mobile?  While the leak of confidential information continues to be largely protected by a trade industry publication that has not released it publicly in full, anyone versed in telecommunications can easily find plenty in AT&T’s public documents.

The most important point is that AT&T admits, publicly,  it has not determined exactly what it intends to do with T-Mobile’s most important asset — its network:

• “AT&T, however, will not be in a position to make any final determinations until it is able to obtain more detailed information about T-Mobile USA’s operations, which will occur later in the acquisition process.”
• “AT&T has not yet begun detailed integration planning efforts.”

Would you spend $40 billion to buy a cellular service provider and not have the first clue what you would do with it?

But it gets even sillier.  AT&T doesn’t even know, several months after the merger was announced, exactly where T-Mobile’s cell towers are and what kind of backhaul connectivity they have:

AT&T has not yet begun detailed integration planning and its knowledge of T-Mobile USA’s operations is necessarily limited at this early stage. The actual process of determining which specific T-Mobile USA sites to integrate and which to decommission will require substantially more data from T-Mobile USA regarding its network as well as a more thorough engineering analysis of each area’s characteristics and capacity needs, which could change by the time the Transaction closes. Consequently, AT&T has not yet determined the exact number or location of T-Mobile USA towers or other locations used for transmission of signals that will be integrated into the combined company’s network to increase network density.

Because AT&T has not yet begun detailed integration planning and its knowledge of T-Mobile USA’s operation is necessarily limited at this early stage, AT&T does not have documents regarding the integration of the two companies’ switching facilities and backhaul.

These facts have made it impossible for AT&T to be responsive to specific questions from the FCC about the impact of acquiring and integrating T-Mobile’s operations into AT&T’s.  That left the company answering the Commission’s questions with statements like this:

Q. Provide all plans, analyses, and reports discussing any possible modification by the Merged Company of the terms, including prices, for providing backhaul for unaffiliated mobile wireless service providers to new or existing towers.

A. AT&T has not yet begun detailed integration planning, and its knowledge of T-Mobile USA’s operations is necessarily preliminary at this early stage. Any consideration regarding potential modification of terms and pricing for backhaul has not yet occurred. Thus, AT&T does not have any documents responsive to this request.

Good to know… or not know.

So if AT&T isn’t dwelling on the details of T-Mobile’s network, what do they expect to obtain from its purchase?

Here are AT&T’s “assumptions.”  That’s right, AT&T isn’t actually promising to do any of this.  It just “assumes” it will based on earlier planning — the same kind of planning that was supposed to deliver 4G upgrades without T-Mobile in the equation, until company executives changed their minds:

• Utilize the parties’ combined scale, spectrum, and other resources to extend AT&T’s deployment of LTE services to over 97% of the U.S. population, extending service to an additional 55 million Americans;
• Integrate AT&T’s and T-Mobile USA’s wireless networks, including:

1. Integrate T-Mobile USA cell sites into the AT&T wireless network, resulting in a more robust network grid;
2. Combine AT&T’s and T-Mobile USA’s GSM networks, eliminate redundant GSM control channels and maximize utilization efficiencies;
3. Combine AT&T’s and T-Mobile USA’s GSM spectrum holdings, resulting in channel pooling efficiencies and improved coverage;
4. Optimize usage of the parties’ combined spectrum holdings and deploy additional spectrum to support more spectrally efficient network technologies; and
5. Decommission redundant cell sites and reuse radios and other equipment from decommissioned sites to enhance network efficiency and performance.

• Make AT&T rate plans available to T-Mobile USA customers, while preserving rate plans for T-Mobile USA consumers who wish to maintain their existing plan of choice;
• Make AT&T services, smartphones, and other devices available to current T-Mobile USA customers;
• Integrate retail outlets, dealers, and marketing efforts under the AT&T brand;
• Integrate billing, customer care, and other support services;
• Integrate certain functional units, including, but not limited to human resources, general & administrative, information technology, finance, procurement, and legal.
• Achieve savings in network infrastructure investment and network and customer equipment purchases; and
• Achieve efficiencies in interconnection and transport costs.

During AT&T’s periodic communications with shareholders, the company has spent most of its time talking about cost savings made possible from closing redundant retail outlets, integrating networks, and the always-vague savings from job redundancies (read that major layoffs).  In fact, AT&T has said they will save up to $10 billion dollars in infrastructure expenses with the merger.  At the same time, its public relations efforts promise the company will spend a veritable fortune — up to $8 billion, improving AT&T’s own network.

You can be certain to the uninitiated, eight billion dollars sounds like a lot of money.  It’s a dollar amount that is sure to razzle-dazzle plenty of people.  That is, until you realize during the same period of time, T-Mobile itself would have been spending up to $18 billion of its own money upgrading its network.  Eighteen billion minus eight billion equals the aforementioned $10 billion — the savings AT&T will realize from continuing to under-spend on both its network and T-Mobile’s.

More Fun Facts: AT&T Cares More About Counting Your Usage Than Measuring Network Capacity & Utilization

Wading through AT&T’s filings has revealed another important fact pertinent to Stop the Cap! readers: AT&T obsesses about measuring your wireless data usage but doesn’t have much of a clue about how much network capacity it has at different cell sites, nor the utilization rates at those sites.  No wonder AT&T drops calls.  If the company isn’t carefully measuring network utilization at a granular level, it can’t hope to find overcongested sites that badly need upgrades to stop the problem of dropped calls and slow speed data:

AT&T does not maintain in the ordinary course of business a nationwide list of all CMAs where its individual network is underutilized. With regard to the areas where AT&T’s and T-Mobile USA’s networks may be underutilized relative to each other, AT&T does not have this information on a CMA by CMA basis, nor does AT&T have engineering data that would provide this granular information for T-Mobile USA.

However, when the opportunity to engage in highly-profitable Internet Overcharging exists, measuring customer usage takes a high priority, as we learn from AT&T in response to another question from the FCC:

The .csv file in Exhibit 19-1 contains current (as of March 11, 2011) data usage for each UMTS site (by USID) measured in kilobytes, during the monthly busy hour, and separately for the uplink and the downlink. The .csv file in Exhibit 19-2 contains current (as of March 11, 2011) data usage for each GSM site, measured in Erlangs, combined for the uplink and downlink, for the monthly busy hour. At the Commission’s request, AT&T also provides an estimate of GSM data usage in terms of Kilobytes, using a formula that converts Erlangs to Kilobytes. ll Both exhibits identify the CMA associated with each site. The .xlsx file in Exhibit 19-3 contains usage projections that are currently used by the network engineers for each of AT&T’s 27 regional clusters in the ordinary course of business.

AT&T doesn’t lose any money when it drops your call from an overcongested cell site (unless you grow weary enough of it to cancel service), but can lose plenty if it doesn’t measure customer data usage in hopes of limiting customer use or charging them an overlimit fee when they don’t.

AT&T’s Mother-of-all-Disclaimers: AT&T Has Not Verified It Has Produced All Requested Documents

The most flippant part of AT&T’s document dump is the revelation that despite the million plus documents thrown at two government agencies, AT&T isn’t willing to affirm it actually produced copies of the relevant documents the government wants as part of the review process.  In a host of disclaimers and AT&T’s own descriptions of how it defines the meaning of the government requests, the company notes:

Pursuant to discussions with the Commission staff, AT&T is submitting its Response consistent with the following qualifications:

• Custodian files were searched covering the period from January 1, 2009 through March 21, 2011, except for certain custodians, whose files were searched through early May, 2011.
• AT&T has not verified that it has produced “all other documents referred to in the document or attachments,” pursuant to instruction 4.
• AT&T has not searched backup disks and tapes for documents.

Nothing to slip through scrutiny there, right?