The March of Radical Innovation: AT&T Buying T-Mobile is Not Just Good—It’s Necessary

9/2/11

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coordinated approaches from companies like AT&T and T-Mobile. It is simply fantasy to assume that smaller or independent, underfunded providers will have the resources to compete with this next massive wave of wireless technology at the spectrum and bandwidth requirements of tomorrow’s applications.

It is impossible and unwise to pretend that we should halt the inevitable tide of technology in the short term because we fear the general idea of consolidation—even though that fear is justified on some level.

It requires diligence, oversight and courageous consumer protection to ensure the fears do not turn into an ugly reality. It requires disclosure. It requires a higher standard of ensuring the combined entity does not abuse its powerful public policy role on critical issues like net neutrality. It is part of the monopoly era that requires a fierce commitment to protect against the excesses of monopolies.

The wireless industry has shown that, despite normal challenges, it has been following a responsible tide of access, quality, low cost and technological innovation that has brought value across all elements of global society, and it cannot and should not be artificially constrained by our national government.

Ryan Blethen of the Seattle Times makes the most salient and thoughtful argument against the merger that I’ve seen—driven by the legitimate policy position of net neutrality. I oppose AT&T’s position on the issue and feel as strongly as Ryan about the importance of keeping the open, affordable, non-discriminatory utility of broadband access to the Web just that.

I would, for example, support a clear set of guidelines around net neutrality in wireless as part of the core consumer protection conditions of this or any other mega-merger. The marketplace can be a frightening and dangerous place, and aggressive consumer protections are always in order. But the tide of wireless technology evolution is a strength not a weakness.

Consolidation in wireless has been inevitable since the first spectrum licenses were quickly purchased by Craig McCaw’s team and so many other mom-and-pop providers across the country. It’s been the most consistent trend in the industry from day one and, as a result, it’s been driven by lower prices and higher quality consumer choice.

We all know that innovation in wireless will continue to happen regardless of the outcome of AT&T and T-Mobile’s deal. But allowing the merger to proceed will inevitably lead more boldly toward exciting new generations of wireless broadband by allowing the natural course of technology to evolve without artificial government interference based upon the notion that it can somehow be stopped.

If this particular merger does not go through, you can bet your cell phone that Sprint, T-Mobile, Verizon, and AT&T will reformulate other associations that have the same essential effect. The reason has nothing to do with regulators in Washington, D.C., or political statements from elected officials jumping on the bandwagon, and everything to do with normal market forces and the cost efficiencies that come from multibillion-dollar infrastructure investment requirements.

I am not, it should be noted, arguing for unrestrained mega-mergers and consolidation without soul or purpose or regulatory analysis. But I’ve seen the glint in the eye of women entrepreneurs selling five-minute mobile phone calls from their village in the developing world, and I know the march of history is on the side of innovation and consumer choice. And we’ve all witnessed revolutions carried over tiny, blurry, two-inch screens in some of the most oppressive nations on earth.

After all, the mobile Facebook and Twitter revolutions in Egypt and elsewhere ran over robust, data-driven wireless networks with sufficient spectrum that cost billions to build.

If we one day have a national and international mobile broadband infrastructure—made possible only by robust capital markets and economies of scale that governments cannot provide—we will ourselves enable the next radical generation of applications that will allow entrepreneurs and consumers to continue to change the world.

(Disclosure: I have received financial support for my legislative campaigns from all of the companies mentioned in this post.)

Editor’s Note: This guest column is adapted from The March of Radical Innovation, first published July 17 on Carlyle’s blog.

Reuven Carlyle, a veteran of the wireless industry, has worked with companies including McCaw Cellular, Xypoint, and Twisted Pair Solutions. He represents the 36th Legislative District in the Washington state House of Representatives as a Democrat. Follow @

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