May 31, 2011

Contacts:
Andrew Jay Schwartzman            Chrystiane Pereira
202-454-5681                                   202 454-5683
andys@mediaaccess.org              cpereira@mediaaccess.org

The following is the text of the summary of the Petition to Deny the applications for assignment of control of T-Mobile USA to AT&T Mobility.  Media Access Project will file the petition on May 31, 2011 with the Federal Communications Commission on behalf of the Center for Media Justice, Consumers Union, New America Foundation and Writers Guild of America, West.

SUMMARY

AT&T seeks approval of a transaction which would effectively create a duopoly in the mobile wireless market.  Removing T-Mobile, the most aggressive and feisty of the four nationwide carriers, as a competitor, would enable AT&T to stifle innovation, increase prices, and decrease choices for wireless customers – especially wireless broadband users.  These negative impacts of the proposed acquisition would harm all consumers and harm the public interest in general.

Moreover, the merger likely would cause the most harm to traditionally unserved and underserved populations, including members of communities of color and rural residents, who rely to an even greater degree on affordable and innovative wireless broadband service offerings to access the Internet and partake in its benefits.  It would also interfere with the development of new avenues for creative expression.  This would be especially harmful to independent creators and others who use the Internet, and increasingly, use mobile wireless broadband access thereto, to create and distribute all manner of video programming and other types of artistic works and political expression.

T-Mobile is a classic example of a “maverick firm.”  Its ads directly and forcefully challenge AT&T by name.  It has been a technological innovator, introducing breakthrough products like the Sidekick.  It was the first adopter of the Android operating system.  It is, by far, the pricing leader among the four national wireless companies.   Antitrust law recognizes that such “maverick firms” are disproportionately important in highly concentrated markets because they have strong incentives not to model their business practices on those of the dominant companies.  Thus, eliminating T-Mobile would be particularly valuable to AT&T and Verizon.

AT&T and Verizon are the two nationwide carriers that increasingly dominate the market for mobile wireless services.  This emerging duopoly already exercises strong market power over voice and text messaging services, and holds an especially strong grip in the markets for mobile broadband data services and smartphones.  T-Mobile and Sprint are the only other two remaining nationwide firms, and these two are no longer anywhere near the size of the big two carriers.

Approval of the transactions proposed in this docket would cement the AT&T/Verizon duopoly into place by eliminating the most aggressive and innovative remaining competitors – greatly increasing concentration in a market that already is highly concentrated by any measure.  The heretofore inexorable trend towards industry-wide concentration contributes to an utter lack of effective competition in the mobile wireless space, with the largest carriers capable of controlling service inputs, dominating downstream markets, and preventing competitive entry.  The Commission should not allow the unlawful, four-to-three horizontal merger proposed by the applicants here.  The transaction would decrease competition further, and likewise decrease innovative offerings and outlets available to all users of wireless services – consumers, as well as those who rely on mobile wireless platforms to conduct their own businesses.

The four nationwide providers are the only ones that can serve residential and business customers who seek mobile access on a nationwide basis.  Regional and smaller carriers exist but for several reasons are not substitutes for the four nationwide providers.  These other carriers lack the economies of scale and the influence of the nationwide carriers when making deals for handsets, meaning that their offerings in that are inadequate substitutes for the four nationwide providers’ offerings.

Regional carriers also lose out to nationwide providers, and especially to the big two, because of their literal dependence on these large providers for essential inputs such as roaming and special access services.  AT&T and Verizon are far away the largest wireless carriers, and also benefit from their affiliation with their respective landline affiliates – the dominant providers of special access services throughout much of the United States.

In recognition of all these limitations, smaller carriers often focus on the pre-paid submarket, unlike the top four providers that focus on their postpaid base.  Therefore, the smaller carriers’ distinct business model alone renders them incapable of imposing a competitive constraint upon the four nationwide providers.  Since 2008, all the nationwide operators have launched unlimited national flat-rate calling plans, to which consumers increasingly have shifted, leaving behind restricted plans that included separate roaming charges.  Pricing is now set nationally by the four nationwide providers, and regional and local carriers cannot constrain these four firms’ pricing behavior.

For all these reasons, the Commission should view with great skepticism the applicants’ claims about the level of competition they supposedly face from non-nationwide carriers.  In the end, the Commission can and should deny the applications, which would not serve public interest, nor enhance competition, nor preserve the value of having an innovative firm such as T-Mobile competing for customers’ business.

The consequences of AT&T’s $39 billion dollar purchase of T-Mobile are clear.  The transaction would remove an innovator and price-destabilizing maverick from the competitive landscape.  It would significantly hinder AT&T’s only other potentially destabilizing competitor, Sprint.  Finally, it would present an easy route – but by no means the only route or the best one, from the standpoint of competition and consumer benefit – for AT&T to overcome its prior under-investment in its own network, and contemporaneous failure to deploy its already substantial spectrum portfolio.

In sum, a combined AT&T/T-Mobile would hold duopoly control of the relevant national market, in tandem with Verizon.  This would undermine innovation and increase the likelihood of collusive pricing, neither of which would serve the public interest.  The merger is likely to intensify market power, raise prices, reduce innovation, and narrow consumers’ choices.  The claimed efficiencies with which AT&T seeks to offset the anticompetitive nature of its merger proposal are speculative, overstated, or inaccurate, and in any event neither specific to the merger nor capable offsetting of its anticompetitive impact.

The Commission therefore should deny the applicants’ request.

Contact:
Kamilla Kovacs, Media Access Project
571.426.0466
press@mediaaccess.org

Karlos Gauna Schmieder, Center for Media Justice
510.698.3800 x402
karlos@centerformediajustice.org

WASHINGTON – On Tuesday, Media Access Project (MAP) filed reply comments, on behalf of member organizations of the Media Action Grassroots Network (MAG-Net), regarding the FCC’s proposal to reform the Universal Service Fund’s Lifeline and Link Up programs. MAP and MAG-Net asked the Commission to reject proposed reforms that might, in practice, diminish or eliminate benefits to intended recipients of these adoption support programs.

Specifically, MAP and MAG-Net asked that the Commission reject a proposed rule to permit only one resident per household to receive support for adoption. The groups argued that the proposed rule would deny support unjustifiably to other qualified individuals residing at a single address.

The groups also requested that the Commission focus its efforts to curb potential waste, fraud, and abuse in the Lifeline and Link-Up programs on steps that will improve efficiency, not punish qualified applicants.

Amalia Deloney, Grassroots Policy Director of Center for Media Justice, issued the following statement:

“Given the increasingly essential nature of adequate mobile connectivity, low-income households must not be required to choose between having one wireline or one wireless connection. All low-income individuals should be able to obtain adequate broadband or mobile connectivity services. The Commission should not adopt the proposed ‘one-per-residence’ rule and instead should create measures properly directed at situations of inefficiencies or fraud.”

Matt Wood, Associate Director of Media Access Project, issued the following statement:

“The true failing of Lifeline and Link Up to this point has been under-utilization of these programs by eligible individuals. We understand the need to maximize the impacts of the Low-Income program by eliminating unnecessary or inefficient expenditures. But the Commission’s over-emphasis on potential waste, fraud, and abuse misses the point of the reforms these mechanisms need most: expanded and modernized eligibility and implementation guidelines that are reflective of the communications needs of underserved communities.”

Read the comments at http://www.mediaaccess.org/uploads/MAPMAG-NetLifeline-Link%20UpReply051011.pdf.

MAG-Net members organizations who signed the comments include Access Humboldt, Center for Media Justice, Chicago Media Action, Deep Dish TV, Global Action Project, Institute for Local Self Reliance, Instituto de Educacion Popular del Sur de California (IDEPSCA), La Plaza de Encuentro, Line Break Media, Main Street Project, Media Alliance, Media Justice League, Media Mobilizing Project, Minnesota Center for Neighborhood Organizing, NYC Grassroots Media Coalition, Open Access Connections, OtraTech, People’s Production House, Progressive Technology Project, Quote…Unquote, Reclaim the Media, Reel Grrls, Southwest Workers Union, and the United Workers. These organizations represent the perspective of individuals and communities that utilize Lifeline and Link Up to meet essential communications needs.

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Media Access Project is a nonprofit, public interest law firm working to protect free expression, innovation, and economic growth by promoting low cost, universal access to media outlets and communications services.

The Center for Media Justice is a dynamic progressive communications strategy and media policy tank for grassroots organizations serving communities of color and America’s poor. CMJ’s mission is to create media and cultural conditions that strengthen movements for racial justice, economic equity, and human rights.

Contact: Kamilla Kovacs
202.454.5685
press@mediaaccess.org

WASHINGTON – Media Access Project (MAP) today asked the Federal Communications Commission to amend and strengthen its rules to require on-air identification of persons paying for political commercials or other messages on controversial issues.

MAP’s Petition for Rulemaking asks the FCC to use existing statutory authority to update current rules, which already require that broadcasters “fully and fairly disclose the true identity” of sponsors. Under the proposed rule, any person providing 25% or more of the funds for a political TV message must be identified on the air, and a list of all persons providing 10% or more of such funds must be listed in the station’s public file.

In the wake of Citizens United v. Federal Election Commission and other recent judicial decisions involving campaign finance laws, there has been a new wave of spending for political and issue advertisements by organizations which are not required to disclose the identities of their donors under the Internal Revenue Code or the Federal Election Campaign Act. Moreover, although the Communications Act of 1934 does require on air sponsorship identification, the FCC has interpreted the law so that it has been possible for funders to hide behind “front” groups. The petition would change the FCC’s rules to accommodate these changed circumstances.

Andrew Jay Schwartzman, Senior Vice President and Policy Director of Media Access Project, issued the following statement:

“The FCC has repeatedly said that members of the public are entitled to know by whom they are being persuaded, and it has stressed that this is especially important in the case of political messages. This petition simply seeks to update the FCC’s rules to fulfill its Congressional mandate.”

Read the petition, including the proposed rule, at http://www.mediaaccess.org/uploads/MAPPetitionForRulemakingReSponsorshipID.pdf.

Read basic information about the petition and the proposed rule at http://www.mediaaccess.org/uploads/MAPSponsorshipIDPetitionFAQ.pdf.

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Media Access Project is a nonprofit, public interest law firm working to protect free expression, innovation, and economic growth by promoting low cost, universal access to media outlets and communications services.

Contact: Kamilla Kovacs
202.454.5685
press@mediaaccess.org

WASHINGTON – Media Access Project (MAP) today joined with Free Press, Public Knowledge, Consumers Union, and the New America Foundation’s Open Technology Initiative, in filing at the Federal Communications Commission a petition to deny AT&T’s proposed acquisition of Qualcomm licenses in the 700 MHz band. If approved, the transaction would give AT&T an even greater share of spectrum ideally suited for mobile broadband services, increasing AT&T’s power in a market it already dominates along with Verizon Wireless.

The following statement may be attributed to Matt Wood, MAP’s Associate Director:

“Today’s filing calls upon the FCC to recognize that continued consolidation of spectrum in the hands of the two largest mobile broadband providers does not serve the public interest. AT&T, like Verizon Wireless, already holds more of this prime spectrum and serves more mobile broadband customers than almost all other carriers combined. Stockpiling more spectrum may be good for AT&T’s bottom line, but it does nothing to promote competition, innovation, and free expression on mobile broadband platforms. The FCC should deny the transaction and then consider the more efficient and public interest-enhancing uses that could be made of this band.”

Read the petition here.

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Media Access Project is a nonprofit, public interest law firm working to protect free expression, innovation, and economic growth by promoting low cost, universal access to media outlets and communications services.

Read the comments here.