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FCC votes to compel AT&T and Verizon to share data networks

post #1 of 32
Thread Starter 
The US Federal Communications Commission narrowly voted to require big mobile carriers to contract with smaller competitors to share access to their mobile data networks, as they are already compelled to do for voice service.

The FCC's 3-2 vote, as reported by Bloomberg, mandates that leading carriers such as AT&T and Verizon Wireless must reach "commercially reasonable" agreements with smaller carriers.

FCC chairman Julius Genachowski said the new requirement would promote competition and investment, noting that "roaming deals are simply not being widely offered.

AT&T and Verizon opposed the measure, complaining that they have scores of roaming agreements and that theres no need for regulation. AT&T executive Robert Quinn said in a statement that "a data-roaming mandate is unwarranted and will discourage investment, and complained that proponents of the new regulation were not just seeking to foster roaming agreements but to "regulate rates downward."

AT&T's vocal opposition to the measure is ironic given its interests in seeking approval of its mega-merger acquisition of T-Mobile, which competitors are complaining will reduce competition and reduce choices for consumers.

If AT&T is legally compelled to resell access to its data network, the merger becomes far more attractive to all parties involved, as it puts T-Mobile's underutilized public spectrum licenses to better use while supporting more avenues for competition, not fewer.

AT&T has indicated that it wants to eventually turn off T-Mobile's non-standard 3G service and repurpose the smaller firm's AWS bands for 4G LTE service, ostensibly supporting high speed data service roaming with carriers such as MetroPCS, which already use AWS for LTE data.

In addition to MetroPCS, the report also noted Sprint Nextel, Leap Communications, and other independent carriers as being potential beneficiaries of the new ruling.

Steven Berry, president of the Rural Cellular Association that represents nearly 100 small American mobile carriers, said in a statement that "consumers will benefit from a more competitive marketplace, and carriers will be encouraged to invest in advanced networks."

For hardware makers such as Apple, the ruling encourages the development of compatible, standardized networks that facilitate roaming, and enables consumers greater choice in mobile providers rather than being locked to a specific carrier as Apple's iPhone has been for the last four years due to technical incompatibilities that prevented roaming agreements between carriers.

The buildout of new, next generation LTE networks by both AT&T and Verizon and smaller regional carriers promises to finally return the US back to the potential for inter-carrier roaming once common under the old AMPS mobile networks in place before the last decade of incompatible barriers arose between the digital networks of GSM, CDMA, and iDEN mobile carriers.

post #2 of 32
Quote:
AT&T and Verizon opposed the measure, complaining that have scores of roaming agreements and that theres no need for regulation. AT&T executive Robert Quinn said in a statement that "a data-roaming mandate is unwarranted and will discourage investment, and complained that proponents of the new regulation were not just seeking to foster roaming agreements but to "regulate rates downward."

Generally, any time you get a quote like that you know they are protecting profits. As a consumer of these services, I don't see a downside here...
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post #3 of 32
Quote:
Originally Posted by AppleInsider View Post

AT&T's vocal opposition to the measure is ironic given its interests in seeking approval of its mega-merger acquisition of T-Mobile, which competitors are complaining will reduce competition and reduce choices for consumers.

I would have called it hypocritical rather than ironic.
post #4 of 32
At least it won't be politically contentious...

</sarcasm>

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post #5 of 32
Quote:
Originally Posted by fecklesstechguy View Post

Generally, any time you get a quote like that you know they are protecting profits. As a consumer of these services, I don't see a downside here...

Actually they have a valid point. This disincentivizes Verizon and AT&T from upgrading their networks quickly as it only helps competitors. The regulation really doesn't seem necessary, and no one is doing anything remotely illegal or unethical. The companies make deals as they see it improve them; this leads necessarily to making their customers happier through faster, more reliable service as they need them to exist. Likewise, while I would disagree with a mandate applied here, I believe the TMobile merger should go through as it should benefit the customers on both networks. It's a great move for both companies, and I believe we'll be better off for it.
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post #6 of 32
Let us see, a government agency telling a private company how to run their ops... Didn't the government tell banks how to loan money to people for houses they couldn't afford? And we know how well that turned out!

Has the government shut down yet? Can they do it a day earlier? Pleeeeeeease!

On a side note: I like how all these Dems are coming out of the woodwork expressing so much concern for the parks closing and cancer research stopping and all that other BS, when they didn't care a rat's ass when they were SUPPOSED TO PASS A BUDGET BACK IN OCTOBER LAST YEAR! as one of their primary responsibilities. </rant>

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post #7 of 32
No....the government did not tell banks to loan money to people who could not afford it. The banks did that all on their own.


Quote:
Originally Posted by Rot'nApple View Post

Let us see, a government agency telling a private company how to run their ops... Didn't the government tell banks how to loan money to people for houses they couldn't afford? And we know how well that turned out!
post #8 of 32
I don't agree. I don't understand the point of two or three different mobile carriers all building out separate networks in the same city. Seems a waste of money and very inefficient.

Their is little reason they cannot all use the same network and still offer different services at different price points.


Quote:
Originally Posted by Smiles77 View Post

Actually they have a valid point. This disincentivizes Verizon and AT&T from upgrading their networks quickly as it only helps competitors. The regulation really doesn't seem necessary, and no one is doing anything remotely illegal or unethical. The companies make deals as they see it improve them; this leads necessarily to making their customers happier through faster, more reliable service as they need them to exist. Likewise, while I would disagree with a mandate applied here, I believe the TMobile merger should go through as it should benefit the customers on both networks. It's a great move for both companies, and I believe we'll be better off for it.
post #9 of 32
Definitely control the telecoms. Most of their infrastructure was, and is, funded by the taxpayer in various forms. "They", these corporate living entities, chose to make money in an arena that is, by necessity, heavily regulated. "They" are playing the game while holding all the implements, and now they're trying to re-write the rules. Naughty. Unfortunately, they are spoiled and very rich, and it's hard for the audience (consumers) to really know what's going on. "They" can say anything and we must believe it. Who's checking the facts?
post #10 of 32
Great news for consumers.
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post #11 of 32
The knee jerk reaction is that it will "help consumers" here, but the opposite is the reality -- this WILL stifle infrastructure investment, increase costs (regulation always costs more) and government interference in private industry ALWAYS has unintended consequences...

Enough is enough -- government is always sticking its nose into EVERYTHING! Wonder why that toilet doesn't flush right in your bathroom -- you guessed it -- GOVERNMENT REGULATION!
post #12 of 32
Any government funding of telecom infrastructure needs to end! Enough is enough -- the nation is broke, in debt, and has a MASSIVE SPENDING PROBLEM!


Quote:
Originally Posted by Tonkin View Post

Definitely control the telecoms. Most of their infrastructure was, and is, funded by the taxpayer in various forms. "They", these corporate living entities, chose to make money in an arena that is, by necessity, heavily regulated. "They" are playing the game while holding all the implements, and now they're trying to re-write the rules. Naughty. Unfortunately, they are spoiled and very rich, and it's hard for the audience (consumers) to really know what's going on. "They" can say anything and we must believe it. Who's checking the facts?
post #13 of 32
Think again bucko -- what do you think Fannie Mae and Freddie Mac are? That's right, the taxpayers are paying for their mortgage failures, and they are government entities!


Quote:
Originally Posted by TenoBell View Post

No....the government did not tell banks to loan money to people who could not afford it. The banks did that all on their own.
post #14 of 32
Quote:
Originally Posted by Smiles77 View Post

Actually they have a valid point. This disincentivizes Verizon and AT&T from upgrading their networks quickly as it only helps competitors. The regulation really doesn't seem necessary, and no one is doing anything remotely illegal or unethical. The companies make deals as they see it improve them; this leads necessarily to making their customers happier through faster, more reliable service as they need them to exist. Likewise, while I would disagree with a mandate applied here, I believe the TMobile merger should go through as it should benefit the customers on both networks. It's a great move for both companies, and I believe we'll be better off for it.

When they give back all the billions in tax subsidies then I'll feel for them.
post #15 of 32
Quote:
Originally Posted by TenoBell View Post

No....the government did not tell banks to loan money to people who could not afford it. The banks did that all on their own.

they sure did ... and with alacrity.
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post #16 of 32
Quote:
Originally Posted by libertyforall View Post

The knee jerk reaction is that it will "help consumers" here, but the opposite is the reality -- this WILL stifle infrastructure investment, increase costs (regulation always costs more) and government interference in private industry ALWAYS has unintended consequences...

Enough is enough -- government is always sticking its nose into EVERYTHING! Wonder why that toilet doesn't flush right in your bathroom -- you guessed it -- GOVERNMENT REGULATION!

I'll star believing some anti-government rhetoric from the loony right when I see all of them in congress refusing to accept pensions and health care benefits that come from this scary thing they hate so much called the Government of the United Sates. You know the institution set up by we the people and democratically elected by the same.
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post #17 of 32
Quote:
Originally Posted by TenoBell View Post

No....the government did not tell banks to loan money to people who could not afford it. The banks did that all on their own.

As other's have said, Freddie Mac and Fannie Mae. The government basically told banks to take on high risk housing loans, backed by these two establishments because they were "Too big to fail." and if the homeowners defaulted, the government would bail those banks out.

So basically they told the banks: You know those high risk/high reward loans? We're removing the risk. At worse, you get your money back, but you stand to gain a ton of money!

What do you think banks would do? It's like telling a guy he can do whatever he wants for 24 hours and bear no responsibility for his actions.
post #18 of 32
Quote:
Originally Posted by 8CoreWhore View Post

Great news for consumers.

Not really. What it will mean is that Verizon and ATT will have no reason to upgrade their existing networks. They'll just wait for someone else to do it and then roam off of them.

It will slow down broadband expansion considerably.

Why should a small regional carrier (that can offer cheaper rates because of it's much smaller network) gain full access to Verizon's network for a fraction of the cost it would take to build that network out?
post #19 of 32
Quote:
Originally Posted by mdriftmeyer View Post

When they give back all the billions in tax subsidies then I'll feel for them.

So all those regional carriers can roam in a single state of their choosing. There are those billions back.
post #20 of 32
Quote:
Originally Posted by Rot'nApple View Post

Let us see, a government agency telling a private company how to run their ops... Didn't the government tell banks how to loan money to people for houses they couldn't afford? And we know how well that turned out!

Has the government shut down yet? Can they do it a day earlier? Pleeeeeeease!

On a side note: I like how all these Dems are coming out of the woodwork expressing so much concern for the parks closing and cancer research stopping and all that other BS, when they didn't care a rat's ass when they were SUPPOSED TO PASS A BUDGET BACK IN OCTOBER LAST YEAR! as one of their primary responsibilities. </rant>

Ah the 4th branch of the government; the unelected administrative state. They sure work wonders don't they.
post #21 of 32
Quote:
Originally Posted by TenoBell View Post

No....the government did not tell banks to loan money to people who could not afford it. The banks did that all on their own.

Actually, you're wrong. The government did tell banks to do that through the CRA (Community Reinvestment Act of 1977). It started with Carter and Clinton gave it a shot of adrenaline in the 90's. Do some research.
post #22 of 32
Quote:
Originally Posted by Rot'nApple View Post

Let us see, a government agency telling a private company how to run their ops...

Don't lose sight of the fact that the government (as a proxy for the people) ostensibly "owns" those airwaves, which are then leased to the wireless companies. The only questions will be whether or not the prior agreements covered this requirement (it did for voice calls) or if there was specific language that would allow AT&T and Verizon to try to block it.

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post #23 of 32
Quote:
Originally Posted by John.B View Post

Don't lose sight of the fact that the government (as a proxy for the people) ostensibly "owns" those airwaves, which are then leased to the wireless companies. The only questions will be whether or not the prior agreements covered this requirement (it did for voice calls) or if there was specific language that would allow AT&T and Verizon to try to block it.

The might "own" the airwaves, but they don't own the towers or fiber the carriers invest billions in every year to maintain.

A rural carrier shouldn't be able to increase their coverage by a factor of 5 for a small fraction of the cost of building out their own networks.
post #24 of 32
I see a lot of people against this (and some for). One thing missing from the against party is an alternative. Free market is good in many places, but in some cases it harms the consumer by creating de-facto monopolies and oligopolies How would you increase competition in the US wireless infrastructure market?

I'm not trying to be a smart__s, but seriously: do you have better ways of increasing competition or are you just against this proposal just for the sake of being against?
post #25 of 32
Quote:
Originally Posted by libertyforall View Post

Think again bucko -- what do you think Fannie Mae and Freddie Mac are? That's right, the taxpayers are paying for their mortgage failures, and they are government entities!

Fannie and Freddi only buy up mortgages already issued by banks. The initial issuing is completely on Bank's own.
post #26 of 32
Quote:
Originally Posted by Menno View Post

The might "own" the airwaves, but they don't own the towers or fiber the carriers invest billions in every year to maintain.

A rural carrier shouldn't be able to increase their coverage by a factor of 5 for a small fraction of the cost of building out their own networks.

Moot point. That rural carrier can already piggyback off of the big wireless companies for voice calls. This ruling only extends that existing policy to include wireless data networks. I'm not saying it's right, I'm saying that's the reality.

The towers are merely "leasehold improvements" (N.B. the accounting definition) built on properties (airwaves) that the wireless companies hold leases to, but do not own. Policy changes that affect those leases are one of the risk factors of being in that business.

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post #27 of 32
Quote:
Originally Posted by libertyforall View Post

Think again bucko -- what do you think Fannie Mae and Freddie Mac are? That's right, the taxpayers are paying for their mortgage failures, and they are government entities!

Fannie Mae and Freddie Mac were privately run and publicly traded companies while they were involved in the subprime mortgage and mortgage backed securities schemes. They were not directly controlled by the government.

Quote:
Originally Posted by digitalclips View Post

they sure did ... and with alacrity.

The government did not tell the banks to make loans to anyone with a heart beat and a signature. Then bundle those loans into securities chop them up sell those securities on the open market.

Can you point to any information where the government forced banks to do any of this?

Quote:
Originally Posted by crees! View Post

Actually, you're wrong. The government did tell banks to do that through the CRA (Community Reinvestment Act of 1977). It started with Carter and Clinton gave it a shot of adrenaline in the 90's. Do some research.

"The Community Reinvestment Act of 1977 seeks to address discrimination in loans made to individuals and businesses from low and moderate-income neighborhoods. The Act mandates that all banking institutions that receive FDIC insurance be evaluated by Federal banking agencies to determine if the bank offers credit in a manner consistent with safe and sound operation as per Section 802(b) and Section 804(1)) in all communities in which they are chartered to do business."


Exactly where in there does the government force banks to make loans to people who cannot pay them back? Exactly where does the government force banks to make so many loans to people who cannot pay them back that the bank drives itself out of business?
post #28 of 32
Quote:
Originally Posted by Menno View Post

As other's have said, Freddie Mac and Fannie Mae. The government basically told banks to take on high risk housing loans, backed by these two establishments because they were "Too big to fail." and if the homeowners defaulted, the government would bail those banks out.

That is not what happened. The government wanted banks to be more fair in its lending practices to low income people and small business. The government did not tell banks to go crazy giving loans to anyone with a heart beat and a signature.

Actually there were some stories of banks giving loans to dead people and never bothered to verify if the person was alive.

Quote:
So basically they told the banks: You know those high risk/high reward loans? We're removing the risk. At worse, you get your money back, but you stand to gain a ton of money!

If the government made this promise why did hundreds of banks including three of the largest investment firms in the world go out of business?

Quote:
What do you think banks would do? It's like telling a guy he can do whatever he wants for 24 hours and bear no responsibility for his actions.

There is a reason all of this happened. You guys want to dumb it down for sensationalism and never get to the heart of why did these banks do this to themselves. It had nothing to do with the government.
post #29 of 32
Quote:
Originally Posted by TenoBell View Post

There is a reason all of this happened. You guys want to dumb it down for sensationalism and never get to the heart of why did these banks do this to themselves. It had nothing to do with the government.

I agree... and would like to add. One of those reason was was A.C.O.R.N. They picketed and coerced banks into making sub-prime loans to people who could never repay them. It was a progressive goal by the far left, championed by the socialism of Jimmy Carter from the 70s (Carter is still playing nice with North Korea, China, and Cuba today) and taken up with renewed vigor by OBama.
post #30 of 32
Quote:
Originally Posted by ljocampo View Post

I agree... and would like to add. One of those reason was was A.C.O.R.N. They picketed and coerced banks into making sub-prime loans to people who could never repay them. It was a progressive goal by the far left, championed by the socialism of Jimmy Carter from the 70s (Carter is still playing nice with North Korea, China, and Cuba today) and taken up with renewed vigor by OBama.

Glenn Beck? Is that you?

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post #31 of 32
Quote:
Originally Posted by John.B View Post

Moot point. That rural carrier can already piggyback off of the big wireless companies for voice calls. This ruling only extends that existing policy to include wireless data networks. I'm not saying it's right, I'm saying that's the reality.

The towers are merely "leasehold improvements" (N.B. the accounting definition) built on properties (airwaves) that the wireless companies hold leases to, but do not own. Policy changes that affect those leases are one of the risk factors of being in that business.

The thing is though that Voice calls are very low strain on the network. There's a hard cap on how much voice calls can be used (only so many minutes in an hour) but the ONLY limit on data usage is download speed..

What this legislation is trying to do is fix the prices at some artificially low point to allow these cheaper carriers to offer nationwide, highspeed data coverage without spending anything in fiber or towers. Around me there is a rural carrier that offers unlimited everything (including smartphone data) for $50 a month. Now, they suck outside of the county they're based in, because they don't have decent coverage. Why should they be allowed to offer Nationwide data to their customers when they didn't spend a dime in developing said network and only have to pay a fraction of the cost for transmitted data because someone up in the FCC deemed the roaming rate to be "fair" compared to the others.

What it means is that larger companies like ATT and Verizon (and sprint if rural carriers pick up wimax) will have less incentive to roll out their networks, leading to a poorer experience for all customers. The only people to benefit from this legislation are the owners of rural carriers.
post #32 of 32
Quote:
Originally Posted by Menno View Post

The thing is though that Voice calls are very low strain on the network. There's a hard cap on how much voice calls can be used (only so many minutes in an hour) but the ONLY limit on data usage is download speed..

What this legislation is trying to do is fix the prices at some artificially low point to allow these cheaper carriers to offer nationwide, highspeed data coverage without spending anything in fiber or towers. Around me there is a rural carrier that offers unlimited everything (including smartphone data) for $50 a month. Now, they suck outside of the county they're based in, because they don't have decent coverage. Why should they be allowed to offer Nationwide data to their customers when they didn't spend a dime in developing said network and only have to pay a fraction of the cost for transmitted data because someone up in the FCC deemed the roaming rate to be "fair" compared to the others.

What it means is that larger companies like ATT and Verizon (and sprint if rural carriers pick up wimax) will have less incentive to roll out their networks, leading to a poorer experience for all customers. The only people to benefit from this legislation are the owners of rural carriers.

I don't disagree with most of what you are saying.

But what happened in this case is that Verizon and AT&T refused to play ball at all, at any price. The rurals asked the FCC to step in, because ensuring infrastructure gets built out throughout the country is part of the FCC's mission (at least they think so). Verizon and AT&T could've dictated their own terms; they took a calculated risk that the FCC wouldn't extend the voice ruling to include data, and they lost.

Back to the accounting discussion for a moment, the cost of the electronics in the tower is amortized (IIRC) over five years. So the fees charged would necessarily include the costs of building the tower, and the lease for the land and building if the wireless carrier didn't own it or depreciation on the building if they do. That's the case in any regulated environment, and there are tariffs for calculating those "allowable" costs to be passed on to other companies as well as to the consumer. Obviously, what that doesn't includes is the cash flow side of the equation, but the way I see it AT&T and Verizon have no choice to continue to build out their networks. That is, if they want to continue to expand by buying smaller carriers.

FWIW, Sprint leases it's 3G data network out to smaller outfits like Virgin and Boost, and they now have data caps. I don't see why this ruling couldn't include some similar provision, or at least why this couldn't have been included if the Big Two had conducted direct negotiations in good faith with the rural networks.

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