Telecom issues take center stage with Minnesota senators this week

Minnesota’s telecommunications connections — both commercial and political — will consume significant bandwidth at a pair of hearings in Washington this week.

This morning, Sen. Al Franken who chairs the Judiciary Privacy and Technology Subcommittee will hear from Apple and Google executives among others, on mobile privacy issues. The hearing promises to generate broad interest following revelations that detailed information about users’ locations is stored on their iPhones, iPads, and computers to which the devices are synched.

On Wednesday, both Franken and Sen.Amy Klobuchar will participate in the Judiciary Subcommittee on Antitrust and Competition hearing as the CEOs of AT&T, T-Mobile and Sprint Nextel lay out their views on AT&T’s $39 billion bid to take over T-Mobile.

 While the merger will ultimately have to win approval from both the Federal Communications Commission and Department of Justice, Wednesday’s hearing promises to frame the issues that ultimately will decide the merger’s fate.

Sprint, a wireless only carrier, with about 15.6 percent of the market by revenue, has been vocal in its opposition. Last week, a Sprint executive came through the Twin Cities meeting one-on-one with media outlets to lay out the Kansas City-based carrier’s views.

Describing AT&T’s bid as “chutzpah,” Charles McKee, Sprint Nextel vice president for government affairs, said the merger would limit competition and innovation and create a duopoly between AT&T and the other major landline and wireless carrier, Verizon, that would control 78 percent of the revenue nationwide. “How can they say it [the merger] is right for consumer when they know it will eliminate competition?” McKee asked.

Source: CTIA-The Wireless Association

The stakes are high for all the players. The industry generated $159.9 billion in revenue in 2010, according to CTIA — the Wireless Association, an industry lobbying group. While AT&T and Verizon operate both land lines and wireless networks, a growing percentage of households, 26.6 percent, only have wireless connections, CTIA reported.

Last week, Klobuchar sent a series of questions to AT&T and T-Mobile CEOs who will come before the committee. Klobuchar in the past has been critical of such industry practices as excessive termination fees and “cramming” hidden charges from third-party services onto users’ bills. She also has called for the industry to provide greater broadband access in rural communities.

More than 4,700 comments submitted to the FCC website about the proposed merger, including 127 from Minnesotans, seem to overwhelmingly oppose the deal.

Nathaniel Davidson of Rochester told the FCC that he is concerned that the merger “would cause a monopoly over frequencies that are used worldwide.” AT&T and T-Mobile are the only U.S. carriers offering GSM technology, which is the standard throughout Europe and much of the rest of the world.

David Schenck of Edina, who says he sells phones and carrier plans for a living, was more adamant. “I truly find it amazing that this terrible deal may not be squashed outright. Squash it like a bug, please. Be reasonable; protect the consumers’ freedom to choose.”

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Comments (1)

  1. Submitted by Bernice Vetsch on 05/10/2011 - 07:39 pm.

    The Congress in recent years seems to consider no merger presented to it for examination to be “anti-competitive.”

    Comcast, for instance, will now control the NBC/Universal communications empire (and therefore news and entertainment content), plus delivery of that content via its cable TV service, plus, for many, both telephone and email service via customers’ PCs.

    Can we expect anything different from this one?

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