The March of Radical Innovation: AT&T Buying T-Mobile is Not Just Good—It’s Necessary
In the early 1990s, few short years after I joined McCaw Cellular—then the nation’s largest mobile operator despite not possessing anything close to a national footprint—the Seattle-area company was acquired by New Jersey-headquartered grandfather of telecommunications: AT&T.
It was a time of rapid and aggressive technical and business transition. While I could feel the entrepreneurial energy quickly leave the room, I could also tell on a serious level that it was an important time in the history of the industry, consumer choice, lower prices and better services.
It was an evolution that I knew was valuable and inevitable, an important step in helping the market transition from an exciting and interesting grown-up toy to a radically productive tool of communications that would revolutionize the world.
Nearly 20 years later, those same forces are at play in AT&T’s proposed $39 billion acquisition of T-Mobile. I believe the merger should be approved by the federal government, and I disagree with the Department of Justice’s decision to block the deal by filing an antitrust lawsuit.
I hope that, in the end, the Obama administration will find a way to approve this deal while ensuring that consumers are protected. Doing so is the only realistic way to ensure that this country builds the next-generation broadband networks that will create the core “utility” infrastructure upon which the radical innovation of applications, content and services can explode.
From a broader systems level, there are those who see the proposed merger between AT&T and T-Mobile—a partnership that has been almost inevitable for the past decade or more due to their respective sizes and mutual adoption of the GSM standard—as an assault upon freedom of expression, limitations on bandwidth, net neutrality and other such positions.
I very much understand their fears, and I share a certain anxiety from a front-line entrepreneurial perspective (selling a product or service to the mega carrier will become an even greater nightmare). It’s hard not to assume that competitors Sprint and Verizon, who have similar dynamics of size and technical standards may likely combine at some point leaving only two mega carriers in the U.S. market—once again, a lightly regulated duopoly dynamic.
The market takes giant steps forward, retreats and reorganizes and grows again, because it breathes with the innovation from consumer needs and desires. Still, there is another side that goes almost to the core of the radical evolution of technology that warrants a look.
In my view, the proposed merger between AT&T and T-Mobile should be allowed by regulators to move forward, less because of short-term jobs, investment considerations, or the logistical improvement in wireless coverage, and more because of the role wireless plays in society. It is something intangible but even more radical in the evolution of technology: An inevitable need to innovate from small to large, oddity to commodity, infrastructure to application and the inevitable lower prices that underlay it all.
The consolidation of the wireless industry is an inevitable march forward because creating the innovation and infrastructure of our connected, Web-based world requires capital, risk, investment and ideas. Government simply cannot pick winners and losers with such reckless abandon as to predict how tomorrow’s technology foundation will serve the public.
Wireless technology has thrived because the government has not aggressively regulated the industry. Despite the issues and ideas underlying consolidation that strike fear in some advocates’ hearts, not illegitimately, to halt the larger march forward would be a mistake.
Simply, in order for true mobile broadband to be deployed nationally and internationally—a service that will itself continue to transform access to applications of tomorrow—we need to recognize and fully acknowledge that expanding the infrastructure requires capital, investment, applications and constantly changing value for consumers.
The radical evolution toward the next generation of mobile broadband, 4G LTE, also has implications for public safety (users who are trapped by non-competitive, closed, expensive, proprietary networks dominated by monopoly players paid for by taxpayers) as well as others: The public safety radio market is the opposite of commercial wireless in its efficiency, as it is a government-created monopoly relying on deep-pocketed taxpayers rather than a competitive market forced to respond to users.
Another example is rural broadband deployment. It is unrealistic to assume that rural areas will receive meaningful mobile broadband without lower-cost infrastructure and … Next Page »