In the past two decades, we have all witnessed the astronomical growth of everything mobile. As a veteran of the industry, I can easily reminisce about going “digital”, and the decommissioning of all things analog . As a former employee of AT&T Wireless, I can vividly remember the day that company hit the 1 million customer mark. At the time, it was a crowning achievement in bringing together network engineering, service offerings and operations for a substantial footprint in the industry. An argument could be made that any of the original players in the nascent domestic mobile marketplace were innovating and creating competition – in a space ripe with opportunity, and in a marketplace functioning as any healthy marketplace should. The past is always remembered fondly, but in this case, the past is a clear and timely reminder that today’s marketplace is dramatically different, and the dynamics of growth have changed.
Yesterday, the Department of Justice launched an antitrust lawsuit against AT&T over its proposed merger with T-Mobile. In a NY Times article, Sharis A. Pozen, acting assistant attorney general in charge of the Justice Department’s antitrust division was quoted saying “Unless this merger is blocked, competition and innovation will be reduced, and consumers will suffer.” In an issued statement, Julius Genachowski, Chairman of the FCC added “Competition is an essential component of the FCC’s statutory public interest analysis, and although our process is not complete, the record before this agency also raises serious concerns about the impact of the proposed transaction on competition. Vibrant competition in wireless services is vital to innovation, investment, economic growth and job creation, and to drive our global leadership in mobile. Competition fosters consumer benefits, including more choices, better service and lower prices.” Ten years ago, this would have been a complete argument.
If the Department of Justice and the FCC are truly concerned about impacts on future investment, job creation, continued innovation and competition, it might be time to evaluate the merits of a transaction in light of what drives the marketplace. Today, the real innovation that creates sustained growth and competition isn’t coming from the network service provider. It’s coming from the likes of Apple, Google, Motorola, Facebook, Amazon, Samsung, HTC, and many others. It’s driven by thousands of developers who are fueling new use cases and applications. It’s supported by enterprise software makers, media and entertainment, energy and healthcare companies extending their products to the mobile edge. And most important, all this innovation is ultimately being implemented by a consumer base that has shown their hunger and unstoppable desire for mobile capabilities.
In addition, for wireless service providers, the availability of spectrum assets remains a paramount concern. All of this mobile innovation in products and services does require, in the end, a network to support the experience. This wireless connectivity also represents a potential efficiency in rural markets, extending the promise of broadband to millions of people beyond major corridors and NFL cities. Cited extensively in the AT&T merger documents as a key efficiency gain, bandwidth and spectrum in most markets remains one area of competitive differentiation for providers. Unfortunately, that differentiation is partially grounded in a well-publicized and challenged bidding process. The FCC specifically should continue to evaluate the relationship between spectrum requirements and competitive impacts, and the mechanism for getting spectrum to the marketplace for commercial use. This merger is a great opportunity for that evaluation, since the FCC cites our global leadership position in mobile technology as a specific concern in this transaction. Uplifting spectrum policy benefits the industry as a whole, and removes barriers that could restrict future innovation in products and services.
The Department of Justice, the FCC and all constituencies involved in the disposition of this merger should be applauded for their time and effort ensuring the public, and our country, is not adversely affected by this transaction. We can only hope the lens used for inspection of this deal moving forward is not clouded by the tenets of a market that has long since matured and moved on.