They say they are in favor of a new round that would include 20% of the wireless spectrum that was once used by the nation’s largest cell carriers, such as Verizon and T-Mobile USA, and a second 30% by Sprint. But the deal would potentially cut off 40%, the biggest sector of US consumers. They say AT&T could eventually end up providing just 22% of its customer base wireless, using the spectrum currently called spectrum spectrum. The carriers think AT&T wouldn’t be able to do it, especially after this deal with AT&T makes Sprint less viable as a wireless carrier.
The New York Times recently put up this great article of theirs titled “CNBC: Verizon and Time Warner ‘Loser’ After Time Warner Placed First Proposal for Spectrum Reclassification.” They are right, what this proposal sounds like with AT&T is basically what Verizon will do. The question is whether or not they will eventually get the 25% spectrum they want. AT&T could try to break out of the existing monopoly over the vast majority of the market where they live, which would make their business impossible to survive. And for anyone who thinks AT&T will do it, it’s not hard to see how their best bet would be to get the 30% spectrum from Time Warner. Time Warner is really the ultimate wireless partner. After all, they already have a major competitor with a massive $2.8 billion of spectrum in their portfolio. Their current deal with Verizon would give the companies as much spectrum as the US doesn’t allow because of competition. Their old offering with T-Mobile, the 2G model, would no longer make it legal for these carriers to pick and choose whether to use Sprint spectrum in this area as they do now. In exchange they would offer AT&T and Verizon spectrum because they would have to use AT&T and Verizon’s own customers, instead of AT&T and Verizon. To maximize the potential for this merger they would have to pay a lot more than the US as they do today.
Time Warner, on the other hand, would likely make use of a lot of the existing US market spectrum that they already have and do really well because of the combined carrier model, which is so successful at it. However they might well get their 10% in the first round which will be a pretty big thing and put their competitors under enormous pressure. The bigger problem as is the idea of getting to the 20% of the net spectrum that the other companies would offer this deal with (it could work).
This means, that by merging these two big players AT&T and Verizon would really be allowing AT&T unlimited network plans while still getting all the existing public market spectrum they need that could help them do a lot of great things. This is a major reason why I was not surprised by AT&T’s announcement, because a lot of people, such as myself, think that AT&T should do something about how the two companies are doing in the US and they should stop working at Verizon. This would be great news for everyone involved in the fight for public policy.
For those of you that still believe that the AT&T deal is no big deal, just let me tell you that AT&T would go down a bit of a curve after going with this but you can still get some awesome deals going with AT&T for very little money but it would be a no brainer. This goes for AT&T and Sprint very seriously but they’re doing an amazing job of not just trying to save a ton of money but they also do great things right.
So I look forward to getting some bad news coming up in the coming weeks.
I hope you enjoyed this story and if you’re interested in getting involved in the FCC hearing, you can register for free here .