And Now There’s Three: How to fix the looming threat of telecom monopolies

When AT&T announced that they intended on buying out T-Mobile, the internet was ablaze with endless rhetoric about how AT&T has effectively killed competition in the mobile market place. Last week, House Republicans voted against the FCC’s Net Neutrality Regulations, further making what comes next look worse than Agrippa’s dream.

AT&T claims that the acquisition of T-Mobile is a win-win for all customers; it will increase coverage for existing customers, be able to roll out 4G LTE coverage for 95% of Americans, and, according to CEO Randall Stephenson they’ll even help President Obama reach his dream goal of a wirelessly connected America (someone quickly check how snakeoil is trading).

The truth however is that this will most definitely lead to fewer options, higher prices, and take-what-we-give service. A few years ago, T-Mobile offered up the only Nationwide plan for unlimited calling any number up to 5 numbers. The MyFavs plan was an instant hit (and offered enough of a savings that I refused to upgrade my plan) and forced Sprint, AT&T, and Verizon Wireless to offer similar plans.

Sprint and T-Mobile offered customers the closest thing to having a powerful enough lobby where their interest, i.e. saving money, could not only be heard but acted upon. A world where only Sprint, the future bottom feeder of the mobile telecom world, would voice the needs of open markets and competition will most likely end with Congress ignoring the requests of the little guy – more importantly, ignoring the needs of regular people.

This is exactly why there is an immediate need for Net Neutrality in the United States. The current political temperature appears to lean towards deregulation in every industry even when it has been clearly shown that deregulation’s impact on people has ended in failure (mortgages I’m looking at you). Deregulation of the mobile space is essentially asking carriers to agree to build mobile technology and share equally.

Telecoms Promise to play nice…

Yeah, okay. Let’s be serious, why would you, the largest company with the largest network, share your resources with Cricket? Or MetroPC? Or whichever local carrier is available?

If the largest carrier also happens to be the only carrier, why should they offer a price that is not available in a market? Who will make them; the FCC was just told by the House they have no authority to enforce any of their Net Neutrality guidelines (note: the FCC cannot pass laws, only guidelines) much less hold a mega-corp accountable for operating as a monopoly.

Telecoms feel that deregulation will allow them to bring us, the consumer, the latest handset technology by creating a demand from manufacturers. I mean, look at the iPhone they proclaim, it became the most sought after phone and forced the industry to innovate.

Let’s look at the iPhone. In 2007 the iPhone was tied to an exclusive deal with Cingular (which later became AT&T), El-Jobso’s first choice: Verizon. In 2007 the Verizon line up of phones were functional bricks covered in V-Cast. In other words, the best carrier had the shittiest line of phones. Verizon was willing to play ball so long as Verizon got to call the shots on what tech would be available (to an extent they were doing this with the Moto Xoom – WiFi was only available after you signed up for a Verizon data plan). At the time Cingular was in no position to make demands from Apple and agreed to let the chains loose. If in 2007, Cingular was the largest carrier and it’s closest competitor were Verizon, there probably would be no iPhone as we know it today. In fact, you’ll probably be pining over the new Motorola RAZR 2012 edition.

And that’s what Net Neutrality is all about, ensuring that companies don’t just promise to play nice and give a wide offering of deals that can fit anyone’s budget; net neutrality is the only means to which make it a legal requirement. If the FTC and FCC approve of this merger it will only lead to carriers price fixing, deterring infrastructure improvement and hindering handset innovation.

Source: Joshua Topolsky

3 thoughts on “And Now There’s Three: How to fix the looming threat of telecom monopolies”

  1. Ummm. Maybe I’m just a little lost here, but how exactly does Net Neutrality relate to telecom arrangements and pricing for cell phone plans? Net neutrality, even according to the FCC guidelines, would at best protect data going across those networks. Net neutrality would have no influence, positive or negative, on the pricing of cell phones data plans. They’re simply entirely separate areas of regulation. In fact the only direct connection between net neutrality and telecoms at all comes from the mobile broadband provision in regards to managing network traffic. Namely that, according to the FCC’s guidelines, there would be none. Carriers would be free to manage their networks as they please, which would likely include some forms of throttling, but barring that would, at best, lead to tiered data, which we’re moving towards anyways. Net neutrality can’t force Verizon to charge a certain price or be more competitive. They’re simply unrelated.

    The FCC and the FTC will, however, be reviewing this deal and, for what it’s worth, several of the folks who are going to be involved with reviewing it are not optimistic. But it has nothing to do with Net neutrality. Also, the FCC recently passed a guideline that requires data roaming to be made available to smaller carriers. This is something that Verizon is obviously not pleased with, but that would certainly help out the competition problem. Again, though, has nothing to do with Net Neutrality.

    Net neutrality is purely about dealing with how traffic is managed across networks. As soon as Net Neutrality begins dictating price or trying to encourage competition, the policy has overstepped its bounds and starts to become every bit as dangerous as the naysayers try to claim it is.

    Also, for what it’s worth, the line about Verizon requiring a data plan to enable WiFi on the Xoom is, at least currently, false. I bought a Xoom a couple weeks after it came out and I didn’t need to get a data plan to use WiFi. As I recall, this was merely rumored, but the idea was scrapped before the tablet made it to market.

    1. The only tie to Net Neutrality I can see is within the leasing of towers to the local providers. If BigTelco – that now owns a great % of all towers in the area. They then dictate whos traffic gets the best speeds. If they throttle leased accounts, that hurts the local telco and drives customers away.

  2. “according to CEO Randall Stephenson they’ll even help President Obama reach his dream goal of a wirelessly connected America”

    Now all Obama gotta do is tackle unemployment so all can afford connectivity

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