FCC chairman Wheeler vows to stay sceptical on big operator M&A

LIVE FROM CTIA SUPER MOBILITY WEEK: FCC chairman Tom Wheeler this morning left US operators in no doubt where he stands on future consolidation between leading carriers in the mobile industry.

“FCC chairman Wheeler vows to stay sceptical on big operator M&A” reported MobileWorld Live, the official publication of GSMA the Assosiation of GSMA on 2014-09-09 00:00:00.

LIVE FROM CTIA SUPER MOBILITY WEEK: FCC chairman Tom Wheeler this morning left US operators in no doubt where he stands on future consolidation between leading carriers in the mobile industry.
While acknowledging that creating scale through mergers represents “good economics” for operators, Wheeler warned in a keynote in Las Vegas: “We will continue to remain sceptical about efforts to achieve that scale through consolidation of major players.”
He argued that lower prices and diversity of service have come through competition, which could be threatened by consolidation.
“This industry has always told policymakers, we are different, we are competitive. But the last couple of years the FCC and Department of Justice have had to be poised to intervene to protect that dynamic”.
“First, there was AT&T’s proposed acquisition of T-Mobile and then most recently the assistant attorney for antitrust and I were outspoken in discouraging Sprint’s proposed acquisition of T-Mobile,” he said.
Competition was one of three areas covered by the head of the US regulator in his keynote. The others were net neutrality and spectrum auctions.
In six days the comment period for the petition proceedings to restore the FCC’s protections vacated by a Verizon lawsuit will close (otherwise known as the regulator’s net neutrality rules). The comment period has attracted a near record-breaking number of responses.
Current regulation distinguishes between mobile and fixed broadband, to the former’s benefit.
Wheeler said a submission by Microsoft had argued that the distinction should be dropped, and that the same legal framework should apply to both.
“Tens of thousands of consumers have echoed that call,” he said.
The tentative conclusion in the rules was that the commission should maintain the same position, differentiating between mobile and fixed.
“In this proceeding however we recognise there have been significant changes in the mobile marketplace since 2010 when vacated rules were put in place. We sought comment. The basic issue raised is whether old assumptions match the new realities,” said Wheeler.
The “new realities” include the impact of LTE, and the sheer scale of the technology’s take-up in the US where there are 120 million subscribers, far more than that at the time of the original rules. This has massively elevated the importance of mobile broadband.
Relatedly, the FCC recently wrote to four leading operators about network management practices.
The regulator was concerned about the possibility that some users were singled out by operators for disparate treatment even though they paid for the capacity that is being throttled.
“We are equally concerned that customers might have been led to purchase devices relying on promises of unlimited usage only to discover they are subject to throttling. I’m hard pressed to understand how either practice – much less two together – is a reasonable way to manage a network,” commented Wheeler.
Again this is an issue, he said, that will be addressed by the net neutrality proceeding.
Finally, on auctions, Wheeler wanted to see more operators step forward and make clear their interest.
“Let’s talk turkey. Many broadcasters have been led to believe that demand for spectrum is not as the mobile industry has claimed. As a result, they believe carriers will not fully participate in auction.”
The interest from AT&T and Dish had been noted. However, reports of strong interest from T-Mobile and Sprint was only via a joint bid. The rest of the industry has been “strangely silent”, he added.
The threat was obvious – if the industry does not put its money where its mouth is, then spectrum policy will look a lot different, he said.

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FCC chairman Wheeler vows to stay sceptical on big operator M&A

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