AT&T’s Buyout of T-Mobile & the Future of Seattle-Area Wireless Innovation: The View from VC Tom Huseby

4/6/11Follow @curtwoodward

AT&T’s blockbuster $39 billion bid for Bellevue, WA-based T-Mobile is easily among the biggest stories of this year in Seattle-area tech. But the deal won’t be consummated for a year or more as government regulators consider the massive industry consolidation at stake.

As you’d expect, there’s been a fair bit of teeth-gnashing associated with the buyout—losing a headquarters operation in an area where you’ve led for so long can feel like a very bad omen. So now that the news has had some time to sink in, we wanted to ask some of Seattle’s mobile-industry veterans for their take on what the deal means for this region.

My first conversation was with venture capitalist Tom Huseby, managing partner at SeaPoint Ventures and a venture partner with Voyager Capital, Oak Investment Partners, and Covera Ventures. He’s a wireless-industry veteran, from his co-founder days at cellular-antenna company Metawave up through board positions with startups like Ground Truth, Ontela (now Photobucket), and Zumobi. And for anyone who wants a really engaging history lesson on the rise of wireless in the Seattle area, check out this 2008 interview that Huseby did with my colleague Greg Huang.

This time, however, I was asking Huseby to look forward.

First of all, he says that while T-Mobile’s sale isn’t great for wireless innovation in the Seattle area, it’s also not as bad as everyone thinks. A primary thing that’s lost in such a change is the ability for entrepreneurs and investors to get in front of a CEO or other top officers, and the close relationships built up over years of sharing a home base.

“It’s really nice to deal with people who know where you live and you know where they live. There’s a home-field advantage, without a doubt, in the startup world,” Huseby says. “We’ve had the benefit of all working together over many, many years. People come to startups, and they go to the carriers, and they come back to startups. There’s a nice interdependency that’s built up, and that’s missing. On the other hand, I’ve never seen a startup succeed that didn’t go get on a plane and sell something.”

In other words, the buyout is something that entrepreneurs and investors can adjust to with a bit more work. Another factor making the change easier to deal with is the amount of experience and talent in the area, a lot of which could stay put. When the deal was announced, AT&T said “the combined company will continue to have a strong employee and operations base in the Seattle area.” Huseby notes that the job base won’t likely be just administrative and back-office work, either, because there are lots of talented people in the area working in important areas such as product development.

What will make things harder overall for innovation in the wireless sector is the plain fact that there will now be one less carrier chasing new ideas. That, of course, will be a major focus for the federal … Next Page »

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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