Genachowski Withholds Comment on ATT/T-Mobile
ORLANDO -- FCC Chairman Julius Genachowski offered no comment on AT&T’s proposed acquisition of T-Mobile, made public Sunday afternoon (CD Bulletin March 21), in a keynote speech Tuesday at CTIA’s annual meeting. Instead, he made a major pitch for incentive auctions and explained the importance of the data roaming order teed up for a vote at the April 7 FCC open meeting. “I know everyone here had been talking about the proposed transaction that was just announced,” Genachowski told a standing-room-only crowd. “Of course, you'll understand that I'm not going to comment on it.” He didn’t have time to take questions from reporters, an aide said.
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Commissioner Robert McDowell acknowledged that the deal is “the gorilla in the room,” speaking later Tuesday, and declining to say how he might vote. On the convention’s first official day Tuesday, AT&T/T-Mobile got little official mention. CTIA Chairman Dan Hesse, CEO of Sprint Nextel, said nothing in his keynote remarks, and only commented when pressed to do so by CNBC commentator Jim Cramer. (See related report, this issue.)
CTIA President Steve Largent also didn’t mention the deal, except indirectly, saying he was headed to Orlando when he “got news of things taking place in the wireless world.” Philipp Humm, CEO of T-Mobile USA, was slated to attend a CEO panel Tuesday. He called Largent Sunday to say he wouldn’t be coming.
"People are in shock,” said an industry executive. “It’s on everyone’s mind, but nobody wants to say anything,” another executive said. Industry officials at the conference said the size of the break-up fee in the agreement -- $3 billion plus spectrum and other reimbursement to T-Mobile if the deal falls apart -- has many believing that AT&T thinks it can get regulatory approvals and the deal isn’t just a defensive move on that company’s part.
Genachowski highlighted concerns about a coming spectrum crunch again Tuesday, after he first raised concerns about the issue at an earlier CTIA conference after he became chairman. Wireless “4G is finally here, which will deliver a high-speed Internet experience comparable to what many enjoy on desktops,” Genachowski said. Wireless “4G investments will soon enable a tidal wave of new mobile innovations, from entertainment, to two-way video, to telemedicine, clean energy and more.”
When he made his earlier major spectrum speech at CTIA, the commercial tablet market didn’t exist, Genachowski said. “Now, analysts are projecting 55 million tablet sales this year -- making it a $35 billion business,” he said. “Smartphones keep getting more powerful and operating systems keep getting smarter.” Smartphones outsold PCs worldwide in Q4. There is “a catch,” he said: “This explosion in demand for mobile services places unsustainable demands on our invisible infrastructure -- spectrum.” While most Americans don’t understand the physics of spectrum, he said “they know what it feels like to have a dropped call or a slow connection."
The FCC is still “working through the details” of the data roaming order, Genachowski said. “Voice roaming has promoted competition and has been an important spur to the dramatic uptake in mobile devices and investment in mobile networks,” he said. “Consumers everywhere want the ability to roam anywhere and they want it for all of their basic services."
McDowell and Meredith Baker are evaluating the data roaming order as circulated by Genachowski, the two commissioners said Tuesday.
Genachowski said he agreed with CTIA about the need for the FCC to hold voluntary incentive auctions of TV and other spectrum, and as quickly as possible. “It’s the right idea at the right time,” he said. “Everyday we are not freeing up spectrum for mobile broadband is a day with real cost to our economy, our global competitiveness and our future.” Genachowski also reassured wireless carriers they will have a big role to play in universal service. “Our reforms, which we're actively at work on, will be technologically neutral and we expect that wireless providers will be active participants in the Connect America Fund,” he said.