The battle for reassembling Ma Bell back together again seemingly began last week during a Senate Judiciary Committee hearing conducted by the Subcommittee on Antitrust, Competition Policy and Consumer Rights. The hearing was called "Is Humpty Dumpty Being Put Back Together Again?" and focused on one mountain of a topic: the AT&T / T-Mobile merger.
On the defending team, AT&T CEO Randall Stephenson led a group of three which included himself, T-Mobile USA CEO Phillip Humm and CWA President Larry Cohen. On offense, Sprint CEO Dan Hesse was at the forefront in opposing the merger, backed by CellularSouth CEO and president of Rural Cellular Association Victor H "Hu" Meena, and president and co-founder of Public Knowledge Gigi Sohn.
The battle to sway the Department of Justice and FCC into favoring or disapproving the merger lasted over two hours. All six were allowed to present their case under oath, offering both written statements prepared prior to the hearing and five minutes to give opening remarks. The Senators were then allowed to question (and grill) the six participants in no particular order.
During the hearing, AT&T CEO Randall Stephenson estimated that in 2015, "we will carry the same amount of mobile data traffic by mid-February that we carried for the entire year in 2010. Just about the only thing that can slow down this cycle of innovation, investment and growth is lack of capacity to meet this demand – and that's why there is such a focus on spectrum. This transaction will increase overall network capacity beyond what the two companies had separately."
T-Mobile USA CEO Phillip Humm chimed in saying that his company was facing spectrum exhaust over the next couple of years in a number of significant markets. T-Mobile also doesn't have the spectrum holdings to launch an LTE service, and that's one reason why AT&T wants Humm's lanes of wireless Internet highway-- to gather enough spectrum to properly build out its upcoming LTE network. This is a win for T-Mobile customers who essentially didn't have an LTE option on the horizon without jumping ship. They'll also now have access to the iPhone here in the States if the merger takes place.
"With the acquisition by AT&T, T-Mobile will be able to offer to nearly all its customers full access to 850 MHz AT&T spectrum, which will significantly improve deep in-building coverage to its customers," Humm said. "As T-Mobile already uses chipsets supporting 850 MHz, customers will be able to take advantage of these improvements shortly after the transaction closes."
On the offense, Sprint argued that AT&T has stockpiled the 40 MHz spectrum and doesn't use it, and that the acquisition of T-Mobile will bring very little relief to AT&T's traffic congestion problems. The company doesn't have a spectrum crisis-- it's more of a spectrum deployment problem. Public Knowledge's Gigi Sohn even suggested that AT&T's commitment to 2G, 3G and HSPA+ is causing too much constraint on its spectrum holdings. "If AT&T were concerned about spectrum inefficiency, it could stop operating 3 different systems," he said.
"We don't have enough spectrum to deploy nationwide, but what we do have is unused because we're building it," Stephenson retaliated.
Obviously the debate was served up to the Senators like a well-played volleyball match. Engadget took the time to sift through all the dialogue and break down the overall hearing into several parts: spectrum isn't a limitless resource, how the merger could effect competition, the power of duopoly and how the two companies would dominate the national GSM market, whether or not rural coverage will even arrive, and the possibility of creating and destroying jobs.
To learn more about the hearing, the entire dialogue was captured by this liveblog in six pages. Happy reading.