The Secret $8 Billion Wireless Scam: How AT&T, T-Mobile and Verizon Game the System

Telecom giants Verizon and AT&T have gamed the system, using regulations designed to foster competition to snatch up ever more of the wireless spectrum. Full Story »

Posted by Beth Wellington
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Posted by: Posted by Beth Wellington - Jun 20, 2011 - 8:19 AM PDT
Content Type: Article
Edit Lock: This story can be edited
Edited by: Jon Mitchell - Jun 20, 2011 - 8:50 AM PDT
Bob Herrschaft
4.1
by Bob Herrschaft - Jun. 21, 2011

The article traces the recent history of consolidation in the telecommunications industry and sounds an alarm concerning a proposed merger between AT&T and T-Mobile, predicting an eventual "duopoly" in an industry that is supposed to serve the public interest. The FCC's historically lackadaisical complicity in such mergers is called into question.

This is more like a train crash than a merger. The victims being those whose jobs would be displaced, as well as the public that relies on a system of open communication. The FCC is the switchman, asleep in the tower, stoned with promises of generous compensation by deeppockets. Any more consolidation of this type and we're more likely to have a ministry of propaganda than a regulatory agency.

News reports indicate that, in prior auctions, entities with deep pockets helped themselves to discounts they were never meant to enjoy. This unacceptable behavior ... More »

See Full Review » (13 answers)
Jon Mitchell
3.6
by Jon Mitchell - Jun. 20, 2011

The reporter plays a bit fast-and-loose with the facts, and the sources should really be cited with links. Mostly, the intense pagination on AlterNet is just really unfortunate. But aside from all that, if you were to Instapaper the article, it would be a pretty informative read about the practices of the companies that dominate this industry.

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Beth Wellington
4.0
by Beth Wellington - Jun. 20, 2011

Kushnick is a telecommunications industry analyst who serves as the broadband and telecommunications expert for Harvard Nieman’s Foundation for Journalism’s Watchdog. There's a lot to mull over here. It would have been easier to evaluate if he had linked to sources--pretty odd that Alternet doesn't take advantage of hyperlinks.

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Kaizar Campwala
3.2
by Kaizar Campwala - Jun. 21, 2011

Kushnick approaches this issue from a perspective of fairness, as in, whether it was fair for ATT and Co to use the tactics they did in spectrum bidding. He fails to discuss the more interesting, and impactful issue: How will a duopoly effect 1) access to communications services 2) innovations in this space. These are much more challenging questions to tackle.

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Randy Morrow
3.8
by Randy Morrow - Jun. 21, 2011

Commissioner Michael Copps echoed this assessment: News reports indicate that, in prior auctions, entities with deep pockets helped themselves to discounts they were ... More »

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Edward Ericson Jr.
4.0
by Edward Ericson Jr. - Jun. 21, 2011

Great story about a barely-hidden scam. This sort of gaming the system is the way things are done in D.C. and throughout business.

The piece would have benefited perhaps to compare to European systems. Service is nominally better and cheaper there for both wireless and broadband, though I’m not sure about the state of competition. The authors also erred in asserting that the mid 1980s spectrum licenses were “put up for bid.” These were actually given away, mainly to insiders, in a rigged lottery. This is a material error, as that spectrum giveaway set the stage for the policy changes that allowed for the ... More »

“In 1984, when AT&T was broken up, only two wireless licenses were allowed per market. The local Bell Operating phone companies received one of the licenses for their ... More »

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