US FTC AND FCC INVESTIGATING CARRIER IQ

Federal investigators have launched a probe in order to examine Carrier IQ’s smartphone software, which tracks a range of activity and sends certain data to wireless carriers without users’ knowledge. Carrier IQ executives met with officials from both the Federal Trade Commission and the Federal Communications Commuission on Tuesday, The Washington Post reports. “We are complying with all investigations at this time as we have nothing to hide,” said Carrier IQ representative Mira Woods. “We have been completely transparent through this process.”

Allegations that the Federal Bureau of Investigation may also be using Carrier IQ software to spy on smartphone users arose on Tuesday when the FBI denied a Freedom of Information Act request for materials related to the Carrier IQ scandal.

AT&T WITHDRAWS T-MOBILE MERGER APPLICATION FROM FCC

The Federal Communications Commission on Tuesday granted AT&T permission to withdraw its application to purchase T-Mobile USA for $39 billion. Two public policy groups, Public Knowledge and Media Access Project asked the FCC to publish its documents relating to the deal and to prevent AT&T from rescinding its application, although it appears it’s too late for that to happen. AT&T announced its intention to withdraw its application to purchase T-Mobile USA on November 24th when it explained that it was going to instead focus on a lawsuit brought against it by the Department of Justice. That case is expected to kick off in February. Should AT&T win, it is likely the wireless carrier will re-file its application with the FCC and begin its acquisition process all over again.

FCC RELEASES PUBLIC REPORT ON AT&T/T-MOBILE MERGER; NOT GOOD NEWS FOR AT&T

The Federal Communications Commission released a 109-page report on Tuesday evening that provides a great deal of insight into what the government agency thought of AT&T’s planned acquisition of T-Mobile USA. However, AT&T believes it is questionable exactly why the government agency decided to release the report since, hours before the report was released, AT&T successfully withdrew its merger application. The FCC said that the acquisition would give AT&T a “unilateral incentive” to increase its prices, which could have had an echo effect on the industry should Sprint and Verizon Wireless follow suit, The Wall Street Journal said. Read on for more.

AT&T promised the deal would create thousands of jobs and that it would bring back 5,000 call center jobs from overseas. The Communications Workers of America also argued the merger could create as much as 96,000 jobs for Americans. Even still, the FCC argued in the report that the acquisition would “result in a net loss of direct jobs.” As one might imagine, AT&T isn’t pleased with the FCC’s decision to release the report.

“The FCC has recognized that it is required by its own rules to dismiss our merger application,” AT&T senior executive vice president of external and legislative affairs Jim Cicconi said. “This makes all the more troubling their decision to nonetheless release a preliminary staff report on the merger. This report is not an order of the FCC and has never been voted on. It is simply a staff draft that raises questions of fact that were to be addressed in an administrative hearing, a hearing which will not now take place. It has no force or effect under law, which raises questions as to why the FCC would choose to release it. The draft report has also not been made available to AT&T prior to today, so we have had no opportunity to address or rebut its claims, which makes its release all the more improper.”

CARRIERS TO ALERT CONSUMERS TO IMPENDING OVERAGES

The nation's wireless providers have announced a deal with consumer groups and the Federal Communications Commission that will set up a system to alert customers to overage fees. The FCC had been set to announce new rules to combat so-called "bill shock", which it introduced last year. Under the terms of the deal, the wireless carriers agreed to set up a system to alert customers to voice, data, text, and roaming overages. Two of those four must be in place within a year, and the entire system ready within 18 months.

In return, the FCC would suspend its own efforts to pass new regulations. Both groups believe that the system will be implemented well before the deadline. "These alerts will give consumers the information they need to save money on their monthly wireless bills", FCC chairman Julius Genachowski says in prepared remarks. "Consistent with the FCC's ongoing efforts, these actions harness technology to empower consumers, and ensure consumers get a fair shake, not bill shock".

While the FCC is allowing the industry to self-regulate, it would keep its own efforts open in case carriers fail to act. CTIA president and CEO Steve Largent said the process of getting the system set up would not be easy, and would take some time to implement.

Many carriers already offer overage alerts, but only on an opt-in basis. The deal would require that the system become opt-out.

FCC SAYS AT&T HAS FAILED TO SHOW HOW T-MOBILE MERGER WILL CREATE JOBS

Rick Kaplan, chief of the Federal Communication Commission’s Wireless Telecommunications Bureau, sent a letter to AT&T on Thursday asking the carrier to clarify just how the proposed merger with T-Mobile USA will add jobs in the United States. “Our review of the information currently in our record suggests that AT&T’s responses on this issue remain incomplete,” Kaplan said. The FCC is giving AT&T until October 31st to address fully “all plans, analyses and reports discussing the creation or loss of jobs” if the merger is approved. AT&T must also disclose how many T-Mobile USA jobs will be eliminated and show how the merger will affect employment inside and outside of the United States during the next five years. AT&T CEO Randall L. Stephenson argued earlier this year that the proposed merger would be a “net job grower” in the United States. On August 31st, AT&T promised to bring 5,000 jobs back to the United States if the merger is approved, which was the same day the U.S. government filed a lawsuit in opposition of the deal.

VERIZON APPEALS NET NEUTRALITY RULES

It only took three days, longer than we thought it would, for Verizon to file a lawsuit to appeal the FCC's recently released net neutrality rules. Verizon had to wait until the rules were published in the Federal Register, which happened on September 23rd. Michael E. Glover, Verizon senior vice president and deputy general counsel, assures netizens that the company is "fully committed to an open Internet," it none-the-less takes issue with the FCC's attempt to institute new "broad" and "sweeping" regulations on the telecommunications industry.

This will probably not be the last lawsuit to suspend and repeal the new rules. Sprint and AT&T's lawyers we are sure are sharpening their legal claws to get into the fight.

FCC TO CREATE & TEST OWN WHITE SPACE DATABASE

On Wednesday, the FCC confirmed that it will begin testing a new database that will enable gadgets to operate on white space airwaves (the frequency not currently in use by other devices), nearly a year after first ratifying its "super WiFi" initiative. The Spectrum Bridge database, as outlined last year, will map out all channels that aren't being used by radio or TV services, thereby preventing broadband devices from interfering with broadcasts. The system will be tested over a 45-day period beginning on September 19th and ending on November 2nd, in order to make sure that it correctly distinguishes available channels from those currently in use.

Cable operators and wireless mic users are invited to register with the database to test its accuracy, but this trial period could easily be extended if the Commission determines that further tests are in order. And, though there's still no indication that unlicensed broadband devices will be hitting the market anytime soon, FCC Chairman Julius Genachowski seems confident that this white space spectrum could drastically change the industry. "Unleashing white spaces spectrum will enable a new wave of wireless innovation," Genachowski explained. "It has the potential to exceed the billions of dollars in economic benefit from WiFi, the last significant release of unlicensed spectrum, and drive private investment and job creation."

FCC PROBING SAN FRANCISCO BLOCKING OF WIRELESS IN BART STATIONS

The Federal Communications Commission is investigating actions last week by the transportation authority in San Francisco which interrupted wireless service in commuter stations in an effort to foil protesters who had planned demonstrations.

FCC spokesman Neil Grace said in a statement on Monday that the agency is "continuing to collect information" about the actions by the Bay Area Rapid Transit (BART) and "and will be taking [steps] to hear from stakeholders about the important issues those actions raised."

In particular, Grace alluded to potential public safety problems that could arise when the authorities interrupted service, an action that has caused a national outcry over whether BART exceeded its authority.

FCC WIRELESS REPORT DOESN'T SAY A WHOLE LOT WITH A BUNCH OF DATA

Sometimes it’s not what you say but what you don’t say that matters, and in today’s release of its annual wireless competition report (PDF link), the silence of the Federal Communications Commission speaks volumes. The problem is, no one knows what that silence is saying.

The agency has decided not to say that the U.S. mobile industry is competitive, releasing a report that could possibly cause problems for the $39 billion merger between AT&T and T-Mobile. Last year, when the FCC released its report, analysts paid considerable attention to the fact that the FCC hadn’t declared the industry competitive, but had instead issued an in-depth report looking at the various layers of the mobile ecosystem, and expressed concern about some elements and less about others.

This was seen as a victory for those worried about the influence that operators had on the agency, but this year the pro-consumer lobbying groups are clearly disappointed, having hoped the FCC would come out strongly on the issue. This is a particularly sensitive topic for the current FCC, which has tried to appear consumer friendly while not upsetting incumbents too much. One can still hope that mobile broadband might help rectify the uncompetitive state of wireline broadband in the U.S., but given the difficulties faced by LightSquared and the proposed combination of the nation’s No. 2 and No. 4 mobile operators the FCC could wind up building a wireless duopoly.

But while the FCC didn’t come to a conclusion on competitiveness, it did provide a lot of data. For example, spectrum holdings are a huge issue for the merger, and a chart from the report shows how much of the 700 MHz spectrum both AT&T and Verizon currently have. However, the same chart also shows how complex analyzing spectrum holdings can be, because it’s not an apples to apples comparison. The latest report is incredibly aware of those same problems in comparing different facets of the mobile ecosystem, which may be why the FCC ultimately provided a ton of data that says essentially nothing.

US HOUSE OF REPRESENTATIVE LETTER TO FCC WRONG ON FACTS OF AT&T/T-MOBILE MERGER

According to press reports, more than 70 Democrats have signed a letter to the Federal Communications Commission and the Justice Department touting the alleged benefits of AT&T’s proposed takeover of T-Mobile.

While it does not endorse the merger, the letter claims the deal would bring the benefits of broadband to rural communities that would otherwise not have access. This is untrue: On June 10, AT&T reported to the FCC that, even without the merger, it plans to deploy next generation "4G service to 97 percent of the population by the end of 2012."

The letter also suggests AT&T's takeover will result in billions of dollars in additional investment and the creation of thousands of jobs. But AT&T has told Wall Street the merger will result in less investment and more layoffs.

Free Press Action Fund Research Director S. Derek Turner made the following statement:

“Members of Congress should be more careful about signing any letter that AT&T puts in front of them. This letter is riddled with misleading and factually inaccurate statements that contradict what the company is telling investors and regulators. It is simply wrong on the facts.

“This letter cites promises from AT&T to bring wireless broadband to 97 percent of the country, including areas where it claims Americans may not otherwise see the benefits of broadband. But the truth is that it won’t take a merger to get next-generation mobile broadband to rural and underserved communities. AT&T has already publicly committed to expanding its 4G coverage to the same 97 percent by 2012 without the merger, and Verizon has done the same.

“The letter is also dead wrong when it suggests that AT&T's takeover will result in billions of dollars in additional investment and the creation of thousands of jobs. AT&T has already told Wall Street that it expects to spend at least $10 billion less in capital investment over the coming years. This drop in investment will unquestionably lead to fewer jobs. And the only benefits tens of thousands of T-Mobile workers will see from this deal are unemployment benefits.

“If the members of Congress who signed this letter had taken the time to examine the public record, they would have seen right through AT&T's phony promises. We expect the Justice Department and FCC will be much more skeptical of AT&T's claims and conclude based on the evidence that this merger's only 'benefit' will be fattening AT&T’s bottom line at the expense of American workers and consumers.”

SPRINT FORMALLY ASKS FCC TO BLOCK AT&T/T-MOBILE MERGER

Sprint’s already been very vocal about its opposition to AT&T’s planned purchase of T-Mobile from Deutsche Telekom, but on Tuesday the carrier officially asked the Federal Communications Commission to step in and block the purchase. In its 377-page filing, Sprint argued that the acquisition would make AT&T the nation’s largest carrier with a total of 118 million subscribers and a 43% grip on the postpaid market.

The carrier added that Verizon and AT&T would earn 78% of all wireless revenues and the “Twin Bell” duopoly would have an 82% grasp of the postpaid market, making it difficult for other carriers such as Sprint to compete.

AT&T, meanwhile, has argued that the acquisition will create jobs, will not stifle competition, and will help deliver high-speed wireless broadband to 97% of U.S. residents.

FCC LAUNCHES EMERGENCY ALERT SYSTEM FOR MOBILE DEVICES

The city of New York has teamed up with the FCC and wireless carriers to unveil a new emergency alert system called PLAN (Personalized Localized Alerting Network). PLAN can notify mobile users in a specific geographic location of a hazardous or potentially life threatening situations. The new system was announced a few days ago at an event at the still-under-construction World Trade Center site, and New York City Mayor Michael Bloomberg commented:

One of the many lessons that were reinforced on 9/11 is the importance of getting clear and accurate information to the public–that’s why we’ve made improving our emergency public communications a top priority. As part of this effort, we’re harnessing tech in innovative new ways, which is something I found to be effective in both business and government for improving service delivery.

The system taps into the existing Emergency Alert System that notifies the public of an emergency by radio or TV, though PLAN, takes emergency alerts into the modern age with a pretty smart system. With a compatible phone, your mobile device will be able to receive an emergency alert based on your geographical location. For instance, if there was an alert about an imminent threat to public safety for New Jersey (nobody likes New Jersey) and you were not in New Jersey at the time, you would not get the alert.

PLAN consists of three alerts: those issues by the President, alerts warning of imminent threats, and Amber Alerts. The last two can be blocked by an individual but not an alert from the President. The system will be available in New York and Washington, D.C. by the end of the year, and will roll out nationally by April of 2012.

FCC ASKED TO INVESTIGATE DATA CAPS NOW THAT 56% OF AMERICANS HAVE THEM

Two prominent Washington DC tech policy groups have asked the Federal Communications Commission to investigate Internet data caps in the US—with a special focus on AT&T.

New America Foundation and Public Knowledge say in a letter (PDF) that data caps aren't necessarily a problem, but that they do “carry the omnipresent temptation to act in anticompetitive monopolistic ways.”

Unlike competitors whose caps appear to be at least nominally linked to congestions during peak-use periods, AT&T seeks to convert caps into a profit center by charging additional fees to customers who exceed the cap. In addition to concerns raised by broadband caps generally, such a practice produces a perverse incentive for AT&T to avoid raising its caps even as its own capacity expands.

Comcast comes in for the same criticism. Its 250GB per month caps were introduced several years ago, and they have not increased since despite years of network upgrades that have dramatically boosted total capacity.

The fact that AT&T has just slapped a much smaller 150GB per month cap on its basic DSL subscribers seems strange to these groups, since the new cap is substantially lower than caps introduced years ago (and Comcast has been making plenty of cash since adopting the higher caps, so any economic arguments here are suspect).

The lower cap for DSL customers is especially worrying because one of the traditional selling points of DSL networks is that their dedicated circuit design helps to mitigate the impacts of heavy users on the rest of the network. Together, these caps suggest either that AT&T's current network compares poorly to that of a major competitor circa 2008 or that there are non-network-management motivations behind their creation.

Noting that moves to artificially limit Internet use would move against the FCC's own policy of encouraging broadband deployment and use, the two groups asked the agency to investigate data caps in the US. Specifically, they want to know if any ISP-offered services are excluded from the cap, how often the cap is enforced, how customers are warned about usage levels, and whether enforcement is related to network congestion.

In a less-than-intensely-competitive market providing a key piece of modern infrastructure, these are all excellent questions to ask. One might ask them much more sharply in places like Canada, where operators insist that their 2GB or 15GB or caps are absolutely necessary to make a profit.

SAN FRANCISCO HALTS CELL PHONE RADIATION LAW

The San Francisco Chronicle is reporting that The City's law requiring cellphone retailers to label each device's SAR level as tested by the FCC has been put on indefinite hold, with a watered-down version likely taking its place. The law used SAR values to determine radiation levels.

As Joel Moskowitz, director at the IC Berkeley Center for Family and Community Health, and even the FCC will tell you, the SAR value is a poor measurement of radiation intake for consumers:

"The specific absorption rate isn't a very useful measure because it's the peak reading on a variety of tests conducted on cell phones to measure their radiation, but doesn't indicate the average amount of radiation a user would generally be exposed to. You could buy a lower SAR phone, but on average it could produce more radiation than a higher SAR phone."

Although changes to the law have not yet been formally introduced, they'll likely result in retailers handing out "tip sheets" to customers that explain how to minimize radiation exposure from their new handsets.

AT&T SENDS FCC 350+ PAGE REDACTED DOCUMENT TO MAKE CASE FOR T-MOBILE ACQUISITION

AT&T on Thursday filed documents with the United States Federal Communications Commission regarding its proposed acquisition of T-Mobile USA from Deutshe Telekom. The potential merger has been strongly opposed by many, such as Sprint, and one FCC official has a hard time believing such a deal could ever be approved. AT&T has a lot to lose of course, so you can believe the carrier is ready for a fight. AT&T’s position is that the merger will push the wireless industry forward by bringing high-speed 4G LTE service to over 97% of the U.S. population — revised up from the carrier’s earlier estimate of 95%. AT&T says its data traffic is growing at a remarkable pace and its proposed acquisition of T-Mobile will allow the carrier to utilize new spectrum and accommodate the rising demand for cellular data. AT&T also says the merger will create jobs and spur economic growth in small towns.

US HOUSE OF REPRESENTATIVES VOTES TO BLOCK FCC'S NET NEUTRALITY RULES

It looks like Republicans in the House of Representatives weren't about to let this one slip past a possible government shutdown -- they just passed a measure that seeks to block the FCC's net neutrality rules by a largely party line vote of 240 to 179. That follows a House subcommittee vote last month but, as then, the bill still faces an uphill battle in the Senate and with the President, who's expected to veto any such legislation if it somehow got to his desk. Not surprisingly, the rhetoric from both sides is only increasing following this latest development, with Democrat Rep. Henry Waxman saying the Republican bill would "end the internet as we know it," while Republican Rep. Fred Upton argues that "the internet is not broken and this bill will assure that the FCC does not break it."

VERIZON RESPONDS TO NEW FCC MANDATED DATA ROAMING RULES

The Federal Communications Commission on Thursday voted in favor of a new set of rules that will force larger cellular carriers such as Verizon Wireless and AT&T to provide roaming access to their data networks at prices set by the FCC. The move will allow smaller regional carriers to take advantage of the large investments made by national carriers at a mere fraction of the cost of building out their own data networks.

Immediately following the FCC’s vote, Verizon Wireless’ executive vice president of public affairs, policy and communications Tom Tauke issued a statement. “Today’s action represents a new level of unwarranted government intervention in the wireless marketplace,” Tauke said. “By forcing carriers that have invested in wireless infrastructure to make those networks available to competitors that avoid this investment, at a price ultimately determined by the FCC, today’s order discourages network investment in less profitable areas. That is directly contrary to the interests of rural America and the development of facilities-based competition and potential job creation. Therefore, it is a defeat for both consumers and the innovation fostered by true competition.” The full release is listed below:

"The U.S. wireless communications marketplace is one of the most dynamic, competitive and innovative in the world. Consumers have many choices in wireless products and services and expect that these services will be available wherever they go. To meet these customer expectations, Verizon has entered into 40 data-roaming agreements with our competitors – big, small, urban and rural. We have also formed an industry-leading spectrum-sharing partnership with rural carriers to expand the reach of 4G services in rural areas.

“Today’s action represents a new level of unwarranted government intervention in the wireless marketplace. By forcing carriers that have invested in wireless infrastructure to make those networks available to competitors that avoid this investment, at a price ultimately determined by the FCC, today’s order discourages network investment in less profitable areas. That is directly contrary to the interests of rural America and the development of facilities-based competition and potential job creation. Therefore, it is a defeat for both consumers and the innovation fostered by true competition.

“We are also concerned that the FCC is taking this action even though it does not have the statutory authority to do so. Consumers benefit from the deployment of wireless networks that have more capacity to offer new services, and Verizon is committed to working with policymakers to accomplish that goal.”

VERIZON SETTLES FEDERAL LAWSUIT FOR $93.5 MILLION

On Tuesday, Verizon Communications agreed to pay $93.5 million to settle a lawsuit filed by the U.S. Justice Department. Verizon was accused of overcharging the U.S. government for both voice and data services. Reuters reports that the the company’s MCI Communications Services unit “invoiced the General Services Administration for various taxes and surcharges in violation of contracts or regulations.” Back in October of 2010, Verizon was ordered by the Federal Communications Commission (FCC) to repay customers more than $52 million for erroneous data charges.

FCC TO PROPOSE DATA ROAMING RULES

FCC chairman Julius Genachowski briefly mentioned data roaming at CTIA last week, but now he's telling Congress that action is inbound, to ensure rural carriers don't get left behind the rest of the cellular industry. You see, in 2007 the Commission mandated cheap roaming agreements for voice and messaging services to let regional carriers compete, but cellular data is the bee's knees now (as those of you reading this on a smartphone can attest) and those agreements won't protect the Tiny Tims of telecom in a world of VoLTE anyhow. So, as he explains in a letter sent to members of the Senate and House, the chairman has come up with a set of rules, which will "incent potential roaming partners to come to the bargaining table to negotiate private commercial deals."

"The draft order under consideration eschews a common carriage approach and leaves mobile service providers free to negotiate and determine, on a customer-by-customer basis, the commercially reasonable terms of data roaming agreements," reads another letter. Needless to say, we're looking forward to hearing how the FCC will encourage competition while still letting the big boys negotiate from their multi-billion-dollar spectrum holding positions.

HOUSE SUBCOMMITTEE VOTES TO BLOCK NET NEUTRALITY RULES

The House Commerce Subcommittee on Communications and Technology has now passed a new measure that, if it ultimately adopted, would completely overturn the FCC's new rules. The measure now heads to the Energy and Commerce Committee but, as before, it's unlikely that anything will change in the Senate even it ultimately passes in the full House.