Softbank’s marketing is baffling to Americans. The company has produced more than 150 different ads featuring a “typical Japanese family” that is anything but. The Otosan (father) is portrayed as a white dog, accompanied by a more familiar Japanese mother, a daughter played by a famous Japanese pop star, and her African-American brother.

Softbank, Japan’s third largest cell phone company, is said to be in advanced talks with both Sprint-Nextel and Clearwire to acquire a $12.8 billion majority ownership interest in both companies, according to a report from Bloomberg News.

Softbank’s primary motivation isn’t a sudden interest in serving American cell phone users. It wants bigger discounts for expensive smartphones and other mobile equipment for its Japanese customers, and volume discount opportunities are wide open if the company can pool Sprint, Clearwire, and Softbank together as a single buyer.

CNBC reports Softbank originally sought a blockbuster deal with Deutsche Telekom’s T-Mobile USA, Sprint, and Clearwire to form one super-sized carrier, but the German owners of T-Mobile got cold feet and pulled out, fearing the Obama Administration’s antitrust concerns could ultimately torpedo the deal. DT recently proposed an offer for MetroPCS instead, a deal much more likely to pass regulator review.

The deal could provide much-needed financial backing for Sprint, currently embarked on its costly Network Vision plan to upgrade to 4G LTE service. Softbank also sees synergy with Clearwire, because both companies share the same frequencies and TDD LTE network technology, meaning smartphones compatible on one network will work on the other.

Sprint is still said to be considering making a counteroffer for MetroPCS, potentially pulling that company away from T-Mobile, while Leap Wireless’ Cricket also remains a potential takeover target.

Wall Street thinks a foreign player entering the U.S. market will have a much easier time winning regulator approval, because Softbank has no other interests in the U.S. market. The Justice Department and the Federal Communications Commission both ultimately rejected a previous attempt to merge AT&T and T-Mobile, fearing a larger AT&T would reduce competition and stifle innovation.

Softbank is a disruptive competitor in the Japanese cell phone market. It aggressively competes with KDDI and market leader NTT Docomo. The company is perhaps best known for its oddball, often mystifying marketing which features a talking dog interacting with well-known Hollywood stars, including Brad Pitt, Quentin Tarantino, and Tommy Lee Jones.

Ads feature a typical Japanese family played by atypical actors — a strict father played by a talking dog, a more familiar Japanese mother, a daughter played by a famous Japanese pop star, and her African-American brother. The ads are almost incomprehensible to North American audiences used to a more direct marketing approach. But Japanese audiences love the ads they consider both funny and more importantly, unexpected.

That latter theme is particularly important to Softbank’s image in the Japanese cell phone market. With 98.6% of the country ethnically Japanese, the unexpected family underlines the company’s efforts to shake up conventional cell phone service. Softbank is known for introducing unique plans that target different groups of cell phone users often neglected by larger carriers. First to take a chance with the iPhone to appeal to youth, Softbank also sells plans targeting older users that emphasize unlimited calling to family members.

If Softbank brings this type of marketing to the United States, it could challenge T-Mobile as America’s most disruptive carrier. Just don’t expect a talking dog to close the sale.

[flv]http://www.phillipdampier.com/video/CNBC Softbank Said to Be in Talks to Buy Sprint Nextel 10-11-12.flv[/flv]

CNBC covers the deal between Sprint, Clearwire, and Softbank that originally also included T-Mobile USA.  (3 minutes)

 [flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Softbank Tommy Lee Jones.flv[/flv]

Softbank’s legendary ads have been running since June, 2007 and are beyond prolific. More than 150 different ads featuring “the Shirato family” have been produced so far, often with blockbuster Hollywood talent playing along. But most prove baffling to English-speaking audiences, such as this one featuring Tommy Lee Jones as a threatening maid with a uni-brow. (1 minute)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/SoftBank Quentin Tarantino.flv[/flv]

Quentin Tarantino hams it up in these two impenetrable ads for Softbank. The rough translation from Japanese does not help much. It starts with the older woman asking Otosan (the dog) if he’s going to a town called Tosa. Otosan says yes. Then, the younger woman asks if Tarantino is also going, and he replies: “I am Tara!” (In the longer version, Tarantino does his Samurai impression “Hai-ya! Samurai spirit! Get him with the Samurai sword! Ho-ha!”)  Otosan responds, “I’m determined to go to Tosa!” The older woman tells Tarantino to calm down. When the phone rings, the younger woman says, “It’s the phone,” and the older woman says, “It’s your wife.” Tarantino gasps. The wife asks for Tara. Tarantino responds, “I am Tara!” His wife yells, “Get home right now!” (1 minute)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/SoftBank Brad Pitt.flv[/flv]

Not every ad features the Shirato family. A barely recognizable Brad Pitt helps out while showing off some creative ways to use his built-in cell phone camera. (1 minute)

Copps

Americans need to stand up and say “no” to more telecom mergers and lobbying efforts that push for additional deregulation and corporate protectionism in the telecommunications sector. Unfortunately, we are in for a fight, thanks to Washington’s problem disappointing a multi-billion industry that lavishly finances political campaigns, conventions, and vacation outings.

Michael Copps, former commissioner on the Federal Communications Commission from 2001-2011 and acting chairman for the first six months of the Obama Administration ought to know.

“The consolidated world of telecom broadband did not evolve from the hand of God, the mysterious workings of natural law, or the inevitability of market-based dynamics,” Copps wrote in his essay, “Why Give Up on Competition?” “It was enabled by conscious decision-making at the federal level, largely through the abdication of its oversight responsibilities by the Federal Communications Commission over the better part of 30 years.”

In short, it did not have to turn out this way, no matter what the telecom industry and their astroturf friends have to say.

“Go to just about any telecom conference these days, and some industry maven will make the case that restoring competition to the telecom world is so 1990s,” Copps writes. “Why don’t we all just recognize the inevitable, they ask: telecom is a natural monopoly, competition is a chimera, and the sooner we flash a steady green light for more industry consolidation and less government oversight, the better off we’ll all be.”

Provider-backed ALEC advocates for the corporate interests that fund its operations.

Too many in Washington are already true believers, according to Copps, and the result is two companies controlling over 2/3rds of the wireless marketplace and a broadband duopoly for most Americans. This did not happen overnight. Enormous and expensive lobbying campaigns run for over a decade have convinced lawmakers that less is more when it comes to telecom regulation and oversight. Regulators ringing alarm bells about deregulation without sufficient competition have been picked off, says Copps, by the telecom industry-backed American Legislative Exchange Council (ALEC), which has convinced at least 19 state legislatures to wipe away authority from state public service commissions that for years have been trying to protect consumers and preserve competition.

The Telecommunications Act of 1996 was originally designed to open the telecommunications marketplace to increased competition, but also ensure a level playing field for competitors by charging the FCC to implement and enforce strong rules to keep incumbent telecommunications companies from steamrolling new competitors.

No surprises here: Michael Powell was FCC chairman during the deregulation frenzy of the first term of George W. Bush. Today, he’s the president of the National Cable & Telecommunications Association, the largest cable industry lobbying group in the country.

With the arrival of President George W. Bush, the new Republican majority at the FCC promptly began obliterating checks and balances at the behest of some of the nation’s largest phone and cable companies. The results:

• Reselling rights and wholesale leasing of facilities to competitors were wiped away, guaranteeing monopoly control of already-established networks;
• Opening up the long distance and local market to Baby Bell competition with their promise they would compete nationwide failed. Like Big Cable, the Baby Bells sold local and long distance only to their own customers, not to those located in another Baby Bell’s service area;
• Instead of competing, phone companies simply bought each other. “As soon as one transaction was approved, another one came through the door,” Copps reported. “Sometimes it seemed like the merger approval business was our only business.”;
• ” The FCC voted, over the strenuous objections of Commissioner Jonathan Adelstein and me, to remove advanced telecommunications (broadband) from the purview of Title II of the Telecommunications Act—where consumer protections, competition, privacy, and public safety are clearly mandated—and placed them instead in the nebulous and uncharted land of Title I, where regulatory authority is uncertain, consumer protections are virtually non-existent, and where the huge companies are better positioned to wreak havoc on the promise of competition,” Copps said.

To right the wrongs, Copps wants some major changes to reignite competition and return to telecom innovation, eliminating the stagnation we have from today’s cozy, barely competitive marketplace:

1. Learn to say “no” to more industry mergers. Consolidation has not brought communications nirvana for consumers, just higher prices and fewer choices, often from a monopoly provider;
2. Encourage innovative approaches like municipal broadband. Copps: “‘My way or nothing’ may be the mantra of the big guys, but that means no broadband in places they don’t wish to serve.” Copps wants to see the federal government pre-empt state bans on public broadband laws provider-backed ALEC has gotten through legislatures across the country;
3. Smarter stewardship of wireless spectrum, including unlicensed spectrum use, shared spectrum, smarter technology, and a “use it or lose it” policy that pulls back unused/warehoused spectrum held by some of the nation’s largest wireless carriers.

Deutsche Telekom AG, parent company of T-Mobile USA today confirmed it was in talks with MetroPCS Communications, Inc., to merge their two wireless businesses to achieve the greater scale both need to compete with Verizon Wireless and AT&T.

Bloomberg News reports DT’s supervisory board will meet tomorrow to approve the transaction.

The sixth largest wireless company in the U.S. is about to merge with the fourth largest, according to news reports.

The combination would inject an additional 9.3 million current MetroPCS customers (the sixth largest wireless carrier) into the T-Mobile USA family. That would more than make up the 2.76 million former T-Mobile contract customers that fled the carrier during the last two years, especially after learning the company was planning to merge with AT&T.

But some challenges are likely to remain after the merger gets government approval:

• T-Mobile remains largely a postpaid, 2-year contract-oriented company while MetroPCS operates a no-contract, prepaid offering. T-Mobile could transition its prepaid division to MetroPCS’ branding, or fold MetroPCS into T-Mobile and eventually discontinue the MetroPCS brand;
• MetroPCS operates a CDMA network incompatible with T-Mobile’s GSM network. Both carriers are moving towards adopting 4G LTE service, but legacy customers will not be able to use existing phones on each other’s networks.

MetroPCS currently offers home coverage in 19 metropolitan markets and surrounding areas including New York City/Northern New Jersey, Atlanta, Bakersfield, Boston, Dallas, Detroit, Jacksonville, Las Vegas, Los Angeles, Miami, Orlando, Philadelphia, Providence, Riverside, Sacramento, San Francisco, San Bernardino, San Jose, Shreveport, and Tampa.

[flv]http://www.phillipdampier.com/video/CNBC T-Mobile Deal For PCS in the Works 10-2-12.flv[/flv]

CNBC reports on the planned merger of MetroPCS and T-Mobile USA, the first major wireless merger deal since the rejected merger of T-Mobile USA and AT&T.  (3 minutes)

Apple’s iPhone 5 Wi-Fi bug is showing up on several wireless networks.

Wireless companies with usage caps are in the money — your money — if you happen to own Apple’s iPhone 5. A serious bug afflicting the phone’s ability to connect and hold a Wi-Fi connection when using certain wireless security protocols is chewing up customers’ data allowances and exposing them to overlimit fees, even when they think the phone is connected to a free use Wi-Fi network.

So far, Verizon Wireless has confirmed the problem is impacting their customers, but our readers report problems with AT&T and Sprint iPhones as well.

“Under certain circumstances, iPhone 5 may use Verizon cellular data while the phone is connected to a Wi-Fi network,” said Torod Neptune, a spokesman for Verizon. “Apple has a fix that is being delivered to Verizon customers right on their iPhone 5. Verizon Wireless customers will not be charged for any unwarranted cellular data usage.”

Stop the Cap! reader John Pozniewicz thinks that is nice of Verizon, and wonders when AT&T will start dealing with the nearly $100 in overage fees he has already run up on similarly afflicted iPhone 5 smartphones he bought just last week.

“As best as I can tell, the problem seems to relate to the type of Wi-Fi security protocol your router has enabled,” Pozniewicz reports. “Many in the Apple community forums and I both agree the most likely culprit is AES encryption.”

Sprint customer Halle Thompson also wrote Stop the Cap! yesterday reporting her Sprint iPhone 5 was unable to hold its Wi-Fi connection either, forcing her to deal with Sprint’s slow 3G network, even when at home.

“Thank goodness Sprint doesn’t have a usage limit and overage fees or they would own my house by now, because I use my phone for everything,” Thompson says.

Thompson switched off her router’s wireless security and the problem disappeared, but now her Internet connection is open to everyone in her apartment complex. Pozniewicz spent the weekend experimenting with wireless security protocols and quickly found AES caused his Wi-Fi connection to become unstable.

If your readers are having the same problems I am, here is a workaround that will keep your router reasonably secure and accessible until the pointy heads at Apple figure out this disaster:

Recommended Security Settings:

• WPA only (least secure)
• WPA2 only
• WPA or WPA2 with TKIP

Not recommended:

• AUTO – AES
• WPA or WPA2 with AES enabled
• WPA or WPA2 with both TKIP and AES enabled

Verizon Wireless has told customers it will credit back any overage fees incurred as a result of the bug, but only if they ask. Customers should also demand Verizon reset their allowance or at least note their account regarding the problem. Customers should request credit for overlimit fees for both September and October, because early reports indicate the software update designed to fix this problem has not worked in all cases.

Pozniewicz is having much less success with AT&T which so far has refused all comment on the debacle and has been unwilling to issue any service credits for overages. Pozniewicz is upset, noting he has only had his iPhone 5 for a week and it has already cost him and his company an extra $100.

“I am extremely careful about only using Wi-Fi for anything that will consume a lot of data, but my only clue there was a problem was when I noticed how slowly my so-called ‘Wi-Fi’ connection was performing at home and work and that is when I discovered it was not actually using Wi-Fi at all,” Pozniewicz says. “What is insidious about this is that the Wi-Fi connection is still showing on the phone display, even when I am actually using AT&T’s network.”

Thompson reports her phone does seem to initially connect to Wi-Fi, but then loses the connection seconds or minutes later, eventually switching to Sprint’s 3G or 4G cellular networks. Sprint’s unlimited data plan makes the issue just an inconvenience. For Pozniewicz’s company, which has a contract for a dozen iPhones 5’s with AT&T, the overlimit fees are really adding up. His employees are also quickly burning through their own monthly data allowances.

“AT&T is a pack of vampires and they don’t care about anything other than my money, even after talking to two supervisors, one of which implied I was either lying about the problem or an idiot,” he said.

Here is how iPhone 5 customers can check their data usage: Select Settings, then General, then Usage, then Cellular Usage to see what your phone reports you have used thus far. If the numbers seem wildly out of whack, contact your wireless carrier and let them know you may be afflicted with the iPhone 5 bug and have them note your account for future credit for any subsequent overlimit fees.

Verizon customers should have already received a software update in an effort to correct the problem. You can verify this by following these steps:

1. Select Settings, then General, then About.
2. Wait for the message “Carrier Settings Updated,” then touch OK.
3. Allow the update (if any) to install.
4. If your phone does not automatically restart after the update is complete, turn the phone off and then on again to complete the update.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/iPhone 5 Wifi connection issue.flv[/flv]

iPhone 5’s Wi-Fi problems documented by YouTube user “MNeuenswander,” who found changing the security protocol on his router seemed to resolve the problem.  (2 minutes)

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Sanford Bernstein’s Craig Moffett is back on Bloomberg News dismissing Sprint’s business strategy and lamenting the cost of subsidizing Apple’s iPhone 5 for existing customers who don’t really ‘need’ a new phone. Moffett sees all downsides for America’s third largest carrier (in May he gave the company a 50-50 shot of landing in bankruptcy court), trying to compete against a virtual duopoly successfully maintained by AT&T and Verizon. He thinks iPhone subsidies and purchase guarantees cost Sprint too much, their 4G LTE network is too little, too late (and will never perform as well as larger competitors who have lower frequency spectrum available for better reception), and their stock is overvalued. Wall Street routinely brings out analysts cheerleading additional mergers and acquisitions for further consolidation in the wireless market. By cutting down Sprint, Wall Street continues to emphasize it has already picked winners (AT&T and Verizon) and losers (Sprint, T-Mobile, everyone else).  (6 minutes)