Tag Archives: mobile broadband

T-Mobile, Sprint merger review widens in California

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It seems someone jumped the gun at the California Public Utilities Commission, and prematurely sent out a ruling defining the scope of California’s regulatory review of T-Mobile’s proposed purchase of Sprint. On Thursday, the commissioner in charge of the inquiry, Clifford Rechtschaffen, issued an amended version of the “scoping memo” he released the week before, saying the first one “was mailed in error”.

There are several wordsmithing changes in the updated version, and a few that are more substantive. One big change is a broad, up front statement making it clear that there are no particular limits to what the review will cover…

The scope of this proceeding includes all issues that are relevant to evaluating the proposed merger’s impacts on California consumers and determining whether any conditions should be placed upon the merged entity.

Additions to the specific, but “non-exhaustive” list of items that will be covered include consideration of potential new services the combined company might offer and – for both new and existing services – the impact on communities and regions, as well as California a whole.

The net result is that the focus (if you want to call it that) of Rechtschaffen’s investigation is even wider than before. It won’t be limited to a few specific and largely technical issues, as T-Mobile and Sprint had hoped.

The original schedule called for a final decision by next June. The core of the new schedule tracks with the original one, but the beginning of public hearings over the next two or three months, and the final wrap up next spring (or maybe summer?) are more indeterminate. Instead of the CPUC voting on a final decision in “June 2019”, the schedule calls for that to happen in “2nd Quarter 2019”. Given the way decisions are drafted, reviewed and then put on the commission’s agenda, June is still a reasonable bet. But it might happen sooner. Or later – CPUC timelines have been known to slip.

California’s regulatory review of T-Mobile-Sprint deal has light years left to run

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The proposed purchase of Sprint by T-Mobile will get a thorough workover by the California Public Utilities Commission, and a final decision on whether or not to allow it won’t come until next summer. The commissioner running the review, Clifford Rechtschaffen, laid out the issues that he’ll investigate in a ruling on Friday.

Rechtschaffen had to decide how wide ranging his inquiry will be. Sprint and T-Mobile wanted it to be very narrow, and focus on two particular issues: could a relatively small Sprint subsidiary that does some wireline business in California be sold to T-Mobile, and could T-Mobile take over Sprint’s California mobile carrier registration. Technically, that’s just a simple notice that it has a federal license, but transferring it requires CPUC sign-off. As they tried to argue, both were matters of minor paperwork. These aren’t the droids you’re looking for, move along, move along.

Protests came from the usual suspects. TURN (aka The Utility Reform Network), the Greenlining Institute and Media Alliance – non-profit advocacy groups that rely heavily on “intervenor compensation” handed out by the CPUC – objected. So did the CPUC’s internal advocacy unit, the office of ratepayer advocates. They wanted the commission to review the whole merger, and all its potential impacts on Californians.

Rechtschaffen resisted the Jedi mind trick and sided with the protestors. He listed fourteen questions that have to be answered before the CPUC makes a final decision. The timeline he laid out says that will happen in June 2019.

The topics of those questions range from the merger’s competitive impact on mobile service and the fiber backhaul markets in California, whether or not innovation will be helped or harmed, and what, exactly, are the wonderful “efficiencies” that Sprint and T-Mobile promise will come our way if they’re allowed to combine. He’ll also consider the need for and the nature of “conditions or mitigation measures to prevent significant adverse consequences” that the CPUC might impose.

The public will be involved. Rechtschaffen plans to hold a series of public hearings in November and December, which will presumably be held in several locations around California. After that, both sides will file position papers, present evidence at a formal hearing, and submit their arguments and counter-arguments. Once that’s done – by mid-March – it’ll take about three months to produce, review and vote on a final decision. That’s the planned schedule, anyway. Much can happen that might speed up or, particularly, slow down the proceeding.

Self driving cars will be ready, but U.S. 5G networks won’t

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Manufacturers might have self-driving cars ready to roll in the next five to seven years, but how far they’ll roll will, in large part, be determined by 5G mobile network deployments. To support fully autonomous driving, where no human driver is needed and passengers can just kick back and ignore the road, fast broadband connections will be necessary.

Nobody knows yet how fast, but minimum service levels will depend on three speed metrics: download throughput, upload throughput and latency. All three will have to be better than what’s available via today’s 4G networks.

The chart above was published by GSMA, which is a trade group that represents mobile carriers around the world. It reckons that up and down throughput will have to be in the 10 Mbps range, with latency – the round trip time – in the 1 millisecond range, in order to support autonomous driving.

Continental is one of the automotive technology companies that has to actually invent and manufacture the equipment, and design the supporting platforms for self driving cars. It takes the GSMA estimate as a starting point, and stretches those specs: latency might not have to be so good – they’re considering a range of 10 milliseconds to 100 milliseconds – but speeds might have to be faster, maybe as fast as 100 Mbps.

Existing 4G networks can’t support those speed and latency requirements. The four major U.S. mobile carriers all have typical latencies well over 50 milliseconds. Their real world download speeds in California almost never hit the 10 Mbps mark, and upload speeds are significantly less than that, often by an order of magnitude.

Despite the hype from carriers and the Federal Communications Commission, there’s little indication that ubiquitous 5G networks in the U.S. will be there when the automotive industry’s technology is ready to go to market. You might be able to buy a self driving car by the middle of the next decade, but opportunities to take your eyes off the road and your hands off the wheel (or whatever controls it might have) will be limited.

5G reality still lags 5G hype in U.S.

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Lots of 5G talk, not so much 5G action at the Mobile World Congress Americas conference in Los Angeles this week. No phones, no 5G-specific services, no schedules for 5G mobile deployments, Verizon’s fixed wireless plans and AT&T’s equally limited real soon now announcements notwithstanding.

Although it has a hemispheric mission, this year’s show was nearly all about U.S. carriers, content and services. The question on the minds of equipment and technology vendors – mostly from asian and european companies – was what will U.S. carriers do?

“5G is not about doing the same things faster. It’s about doing entirely new things”, said Rajeev Suri, CEO of Nokia during a keynote talk. “Blazing speed is important, but it’s not the only thing”. What those new things will be in the U.S. is still largely a mystery. He was one of many speakers who urged U.S. companies and policy makers to make decisions and act fast to maintain leadership.

If anything, AT&T took a step backward. The keynote speech by David Christopher, who heads up AT&T’s consumer wireless business, focused on video. AT&T’s acquisition of Time Warner’s content businesses has to move forward right now and its existing 4G network is well suited to video distribution, so Christopher’s 5G brush off makes sense – Wall Street is a lot more interested in today’s revenue than tomorrow’s capital spending plans.

Cameron Coursey, an AT&T product development vice president, pointed to the 2022 to 2025 time frame as a target for meaningful availability of 5G service. Meaningful in the sense that enough 5G infrastructure will be deployed to support new products and services that absolutely depend on it. An AT&T assistant VP, Suzanne Hellwig Navarro, also focused on 4G, saying that the carrier will continue to upgrade its 4G core, a process – and a positioning statement – that AT&T misleadingly calls “5G evolution”.

Self driving cars, and the increasing role of cars as a consumer electronics platform, are an entirely new thing. The automotive industry follows 5G deployment plans closely, and is timing its product development cycle to begin producing data-heavy cars in the 2022 to 2025 time frame, according to Kenichi Murata, a Toyota executive who also spoke at the conference. He was speaking on a global basis, though. There didn’t seem to be any assumption – certainly no expectation stated – that the U.S. would be ready then.

Mobile industry moves ahead, but mobile trade show backslides

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Ten years ago this week, I went to what was then the CTIA MobileCon show in San Francisco for the first time, and began this blog. My first post was about an app that turned a smart phone into a mobile hotspot – an unremarkable standard feature now, but back then it was controversial.

Carriers – particularly AT&T, which had an early lock on the iPhone market – were dead set against it. Networks were a mix of 2G and 3G technology, and capacity was severely constrained, compared to today’s 4G infrastructure. It was also a business model issue. Carriers wanted to capture as much of the revenue that came from content, services and apps that flowed through their networks. They were as motivated to fight tethering apps then, as they are to fight network neutrality now.

The show has changed, too. In 2008, CTIA ran two shows a year: the big spring equipment show, usually in Las Vegas, and a fall event, called MobileCon, that focused on apps, content and technology. As the industry changed, though, the center of gravity shifted to the Mobile World Congress in Barcelona, and the two CTIA shows collapsed into a much diminished, single conference in the fall. The final CTIA show, in Las Vegas in 2016, was a shadow of its former self.

Then CTIA partnered with MWC, to create MWC Americas. Its maiden voyage in San Francisco last year seemed to be a hit. The exhibits and conference sessions reflected a hemispheric audience: there was much to learn about mobile telecoms in Latin America, and the U.S.-style smarmy keynotes and meaningless powerpoint presentations were largely replaced by execs with something interesting to say.

This year’s show in Los Angeles was a step backwards. The show’s focus was almost completely on U.S. carriers and regulators (and the universal message was get the lead out). None of the panels or keynotes I attended had a single speaker from Latin America. Policy discussions were Beltway echo chambers. Even the so-called “International Perspectives on Spectrum and 5G” panel consisted of an FCC bureaucrat and two corporate lobbyists from Washington, D.C.

Next year’s show will also take place in L.A., but it’ll happen in late October. The hope is that it’ll be better timed for a lively event. I hope so too.

5g, of a sort, coming to “parts of” two Californian cities in October

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Verizon grabbed what media spotlight was shining yesterday at the opening of the second Mobile World Congress Americas show in Los Angeles. Its announcement that it would be first to market with 5G fixed wireless service wasn’t a surprise – it’s been talking about it for months – but putting a price tag and a launch date on it makes it much more real. Whether it’s really a big deal or not is a matter of how you look at it.

Mobile customers can add the fixed Verizon service to their accounts for $50 a month, standalone subscriptions are $70 a month. Verizon says users “should expect typical network speeds around 300 Mbps” with no data caps (although a mobile carrier’s definition of a data cap and yours is probably different – as the Santa Clara County Fire Department found out). The new service will be available “in parts of” Los Angeles, Sacramento, Indianapolis and Houston, beginning next month.

A very limited, fixed service-only roll out of 5G service gains two things for Verizon: a day or two of media buzz, and a test platform for 5G service, of a sort. The fixed wireless gear they’ll be installing (a service call is required) isn’t fully compliant with the official 5G spec, and will have to be replaced when the real stuff is available sometime next year. But it’s a legitimate beta test with actual customers, and that could give Verizon an operational and marketing edge down the road.

The announcement also helps to let some of the hot air out of the 5G balloon. Earlier this year, Verizon hyped 1 Gbps throughput, which it still claims is the “peak” speed for its 5G fixed service. There’s no reason to doubt that 5G networks can support gigabit throughputs, but that’s a long way from consistently delivering it to customers. Dialling expectations back to 300 Mbps is a good move.

T-Mobile’s takeover of Sprint challenged in California

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T-Mobile’s plan to buy its smaller competitor, Sprint, faces formal opposition in California. The California Public Utilities Commission’s office of ratepayer advocates and a pair of consumer advocacy groups filed formal protests to the merger, claiming, among other things, that it runs afoul of anti-trust principles and would result in a significantly less competitive mobile telecoms market.

The deal has to be approved by the CPUC, but the scope of that review is limited. So far. T-Mobile needs the CPUC’s okay to take over Sprint’s relatively small wireline business, and to put its name on Sprint’s California wireless registration. The former poses broad questions for a tiny aspect of the merger; the latter involves a narrow look at the larger business.

The protestors want the CPUC to combine it all into a single case and make it a comprehensive enquiry that considers the total impact of reducing the number of mobile broadband companies in California from four to three.

As the joint filing by the Utility Reform Netowrk and the Greenlining Institute put it…

The Wireless Application makes the rather bold claim that the elimination of Sprint as a competitor will nevertheless promote competition. However, when discussing the combined company’s position as a competitor, Applicants focus on the combined company’s ability to compete with “premium” brands like Verizon and AT&T, as well as cable companies’ voice and data plans. The Wireless Application is silent as to the combined company’s plans to target more value conscious customers. Joint Consumers are concerned that the proposed transaction would eliminate Sprint and T-Mobile as companies with affordable service offerings and reasonably priced equipment, and, instead, create a “third AT&T/Verizon” that lacks the incentive to serve lower-income or low-margin customers. In fact, the Federal Trade Commission and Department of Justices’ Horizontal Merger Guidelines expressly acknowledge that a combined company may have the incentive to eliminate lower cost offerings in order to drive customers to more expensive (and more profitable) offerings.

It is bold indeed to say that reducing the number of competitors makes a market more competitive. Maybe it’s possible to prove that it’s true. I doubt it, but the CPUC should give T-Mobile and Sprint a fair shot at making that case. If they can’t do it with hard evidence – as opposed to the rhetoric they’ve relied on so far – then the CPUC should block the merger.

T-Mobile’s purchase of Sprint has to clear a Californian hurdle

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T-Mobile, the third largest U.S. mobile carrier, needs the California Public Utilities Commission’s blessing to buy Sprint, the fourth largest. Sorta.

The Federal Communications Commission has jurisdiction over mobile carriers and is doing the heavy lifting in the regulatory review of the transaction. But Sprint has a subsidiary – Sprint Communications Company, or “Sprint Wireline” as it’s referred to – that sells services to business customers in California. As a result, the company has a certificate of public convenience and necessity (CPCN) granted by the CPUC, and needs its approval to transfer ownership to T-Mobile.

In the joint application submitted by the two companies, Sprint Wireline’s business is described as limited “exclusively to enterprise and carrier customers”. It’s no big deal, they claim…

This transfer will not have any impact on the provision of [competitive telecoms] service or competition in that market. T-Mobile does not currently provide such services and neither it, nor any of its California operating subsidiaries, are certificated [competitive telecoms service] providers. Moreover, because this is a parent-level only transaction, with no change in day-to-day operations of Sprint Wireline, the Commission will retain exactly the same regulatory authority over Sprint Wireline that the Commission possessed immediately prior to the Transaction. In addition, the Transaction is transparent to Sprint Wireline’s customers as Sprint Wireline will continue to honor its existing contractual obligations.

The key question is whether the CPUC looks at all the business that Sprint does in California – including mobile – or focuses on the much smaller wireline portion. Going large means closer scrutiny and, perhaps, conditions attached to the sale. A narrow focus on just the wireline business would likely be much less fraught.

In the past, the CPUC has either sidestepped the question, as it did with CenturyLink’s purchase of Level 3 Communications, or based its review on the big picture, and the tougher standards that entails, as it did with Charter Communications’ acquisition of Time Warner Cable’s Californian systems.

The T-Mobile/Sprint deal is different, because there’s a clearer regulatory distinction between wireline and mobile companies, and the certifications and licenses they’re required to have. The CPUC has to decide whether it’s a big enough difference to justify waving the deal through.

U.S. senate looks at mobile broadband service standard for rural areas

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The Federal Communications Commission will set a national mobile broadband speed standard by running tests in the 20 largest metro areas in the U.S., if a bill that’s heading toward a full vote by the U.S. senate makes it into law. The goal is to establish a benchmark for judging whether or not there’s adequate mobile broadband service in rural communities.

Although the language is vague, the bill’s intent appears to be to use that new standard to decide where federal broadband subsidies will go.

The U.S. senate commerce, science and transportation committee approved senate bill 2418 last week, after its primary author, senator Maggie Hassan (D – New Hampshire), added language that requires the FCC to report back to congress every six months, on progress made toward ensuring…

Mobile broadband service available in rural areas is reasonably comparable to mobile broadband service provided in urban areas…

A rural area shall be considered underserved, with respect to mobile broadband service, if tests show that the average speed and signal strength of mobile broadband service available in the area do not meet or exceed the average speed and signal strength of mobile broadband service provided in the 20 most populous metropolitan statistical areas in the United States.

There is some uneasiness about the bill. The FCC’s minimum level for “advances services” capability is 25 Mbps download and 3 Mbps upload speeds. That applies to any type of broadband, wireline or wireless. The fear is that creating a mobile broadband standard based on urban service levels will water down that standard.

Anything is possible, but the FCC still uses 10 Mbps down/1 Mbps up as a minimum standard for subsidised rural service. There’s already a gap between what the FCC considers good enough for rural communities and what’s necessary for full access to the online world. And the FCC doesn’t reckon mobile broadband to be a substitute for high speed, fixed service. Maintaining the distinction between mobile and wireline service is good policy. So is upping the game for mobile users.

T-Mobile, Sprint combo is anti-competitive, but that’s the feds’ call

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The $26.5 billion dollar proposed purchase of Sprint by T-Mobile can’t go forward unless it’s given a pass by anti-trust watchdogs. As a practical matter, that means the federal justice department’s anti-trust unit sits on its hands and doesn’t challenge it in court, and the Federal Communications Commission signs off on the license transfers involved.

In theory, the California attorney general could jump in. In practice, that’s unlikely. So let’s set it aside for now. Unless there’s some obscure wireline telephone asset involved – anything is possible, but I don’t think so – the California Public Utilities Commission isn’t in the game either.

It’s down to the feds. And the likeliest source of opposition is the justice department’s anti-trust unit. It took on AT&T’s acquisition of Time Warner, although its lawsuit appears to be on the ropes.

The question is whether combining T-Mobile and Sprint into one company makes the U.S. mobile telecoms market significantly less competitive. Right now, they are two of the four mobile carriers that are worth worrying about (the other two are AT&T and Verizon, but you knew that).

T-Mobile has 17% of the U.S. mobile broadband market; Sprint has 13%. Both are in the habit of making significant market gambles – unlimited data plans, for example – that the big boys, with roughly a third of the U.S. market each, are forced to match. That’s a significant benefit to consumers, even if it doesn’t warm shareholders’ hearts.

When you’re in imminent danger of falling off a market share cliff at any moment, you assess risk differently than someone with a comfortable third of the pie. Which is what the new T-Mobile would have. Allowing it that level of comfort would decrease the competitive pain of its new peers, as well as consumer’s competitive market pleasure. We’ll see if the federal justice department arrives at the same answer.