Only approves of 'targeted favoritism' when it applies to AT&T.
Earlier this week
we noted how a New York private equity firm named Harbinger plans to spend billions to build a new wholesale LTE (Long Term Evolution) wireless broadband network. The expensive plan very likely may never even happen due to cost, but the deal is notable largely because of some conditions the FCC attached to Harbinger's acquisition of SkyTerra Communications -- whose spectrum Harbinger hopes to use. Specifically, conditions would prevent AT&T or Verizon from using the new company's spectrum without FCC approval, and AT&T and Verizon can't consume more than 25 percent of the new network's total traffic.
The idea supposedly is to ensure that if the new network is built, that it acts as a healthy competitor for AT&T and Verizon. However, according to an FCC
blog post the conditions were actually "volunteered" by Harbinger, and real substantive details of said conditions are nowhere to be found on the public record. Industry analyst Dave Burstein stopped by the FCC blog to add
his two cents on the conditions, correctly noting that Uncle Sam has a piss-poor track record when it comes to enforcing conditions:
These permits are worth several billion dollars. There's nothing in the above that indicates that in return for those billions the operator has committed more than they would have done anyway as part of their business plan. Nor have I found anything else of substance in the FCC filings on this deal. Recent FCC history has massive evidence companies make public "commitments" and simply do not deliver unless the details are clear and well-enforced.
As it stands now, most people in the sector doubt that this network (the brain child of a financially-troubled satellite company and a junk-bond salesman)
ever even actually gets built. But of course, even the remote possibility of having to compete was enough to put AT&T's chief lobbyist in a tizzy. The company has been
blasting the deal all week as "targeted favoritism:"
"This sort of targeted favoritism by the government has no place in free markets," said Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs. "Nor are we aware that Congress has vested the FCC with any authority to implement industrial policy of this nature. In short, this action is manifestly unwise and potentially unlawful."
Complaints of favoritism or legality are of course amusing coming from a company that has by and large written telecom policy for government for the last thirty years, and has the power to
have the law changed should they break it. As for AT&T's love of a "free market," AT&T loves government regulation when it suits them (like forcing Cablevision to offer MSG HD, for instance). So far it appears that if this Harbinger LTE network doesn't collapse under its own weight, it will probably be crushed by the combined lobbying muscle of AT&T and Verizon. Still, the fleeting shot at LTE competition is something to keep an eye on.
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