Telecom

The embattled wireless company LightSquared formally asked the Federal Communications Commission on Tuesday to develop standards that would require global positioning system manufacturers to ensure their devices are compatible with transmissions from other networks.

LightSquared's bid to build a nationwide wireless network with spectrum near that used by GPS has been on hold after tests indicated its transmissions could interfere with the navigation systems. The company says the problem lies with GPS devices that should have been designed to filter out neighboring signals.

"It has become apparent that the commercial [GPS] industry has failed to design receivers that communicate with the U.S. GPS system in a manner that is compatible with the authorized use of adjacent spectrum bands," LightSquared wrote in documents filed with the FCC on Tuesday. "This failure has inhibited the deployment of licensed services in adjacent bands that would provide significant public interest benefits, such as increased competition."

While the FCC has traditionally relied on market forces to keep competing spectrum users from overlapping, LightSquared says this method has failed.

GPS manufacturers say it should be up to LightSquared to fix the problem because GPS devices were built with the expectation that the adjacent bandwidth wouldn't be used for a land-based network like LightSquared has planned.

"This latest filing yet again proceeds from the same false premises and claims that LightSquared has repeated ad nauseum in its ongoing effort to deny its obligation to avoid harmful interference to millions of government and private GPS users," Jim Kirkland, vice president at the GPS manufacturer Trimble, said in a statement. "LightSquared's continuing efforts to move the goal posts are too little, too late."

On Wednesday the House Transportation Subcommittee on Aviation plans to hold a hearing which could include the potential impact of LightSquared's plans on aviation navigation systems.

If AT&T wins its court battle with the Justice Department it could cause wave of new government regulation, according to telecom analyst Tom Wheeler.

In a blog post on Friday, Wheeler, a former president of the National Cable Television Association and CEO of the Cellular Telecommunications & Internet Association, argued that conditions imposed on AT&T's merger with T-Mobile could end up being extended to the whole market.

"If the Justice Department prevails in court the backdoor to imposing a new regulatory regime on wireless will have swung shut," he wrote. "On the other hand, an AT&T court win will trigger government regulation that could ultimately spread to all wireless carriers."

On Wednesday, the Justice Department filed a lawsuit to block the merger, setting the stage for a legal battle and creating an uncertain future for T-Mobile.

The latest on the merger can be found here.

AT&T had been generous with its offers -- expanding ultra-fast 4G service to the rural cellphone users the Obama administration wants to reach, keeping unionized workers on the job to appease the CWA union, even, just this morning, promising to bring 5,000 call-center jobs back from overseas.

But the Justice Department nonetheless filed suit on Wednesday to block the merger.

AT&T's $15.4 million in lobbying last year and $4.8 million in the second quarter of this year appears to have done little good. Justice said the merger would reduce competition and raise prices.

Lobbyists appear to win out either way. T-Mobile USA's lobbying costs grew from $690,000 during the first three months of this year to $1 million in the second quarter, while Sprint's doubled, from $580,000 to $1.36 million from the first to second quarter as it fought against the deal.

Sprint CEO Dan Hesse got a chance to pat himself on the back Monday on the White House blog - praising his company's efforts, with Dell and Sony, to cut what he calls E-waste. Hesse says only about 10 percent of cellphones are ever recycled.

"Sprint's Electronics Stewardship Policy sets aggressive e-waste goals, including the collection of nine phones for reuse or recycling for every 10 sold by 2017," Hesse writes on the blog.

"To date, Sprint has collected more than 25 million mobile phones-- keeping them out of landfills, helping to conserve resources, reducing greenhouse gas emissions, and preventing air and water pollution."

Hedge-fund manager Phil Falcone claimed Thursday that competing wireless companies were trying to undermine his efforts to launch LightSquared, a nationwide wholesale wireless network.

In a television interview with CNBC, Falcone accused AT&T and Verizon of working with members of the global positioning systems industry to block the new wireless network.

"They are doing a lot of things behind the scenes. They are trying to stamp out innovation," said Falcone, who has invested about $3 billion in the venture.

The plan has faced increasing opposition from GPS manufacturers and users, who fear LightSquared's network would interfere with GPS units. Tests have confirmed that interference would take place and the Federal Communications Commission is now considering whether to approve LightSquared's plan.

An AT&T executive expressed concern Tuesday about the legal mess that could ensue
if Congress tries to tap into a major telecom fund to pay down the deficit.

His remarks expand criticisms of the proposal beyond the small rural carriers who have been sounding alarm all week to one of the largest and most influential companies in the telecom industry. House Majority Leader Eric Cantor, R-Va., has proposed diverting $1 billion of the $8 billion Universal Service Fund (USF) to help alleviate the deficit.

"There are definitely legal problems with that which are not well understood," Hank Hultquist, vice president for federal regulatory at AT&T, said during a panel hosted by information service Broadband Census.

Rural carriers who strongly rely on the subsidy fund, which pays for telecom services in rural and low-income households, are up in arms over Cantor's proposal.

Rural phone advocates say the proposal could prompt lawsuits from companies that lose funding, with some describing it as theft for the customers who pay into USF through a contribution line on the telephone bills.

Though little is known about how Cantor's USF proposal would be structured, telecom lawyers said they believe it would likely mirror a plan floated by House Budget Chairman Paul Ryan earlier this year.

Ryan's plan would cap contributions into the fund, containing its already enormous size, while attempting to recover $1 billion in waste, fraud, and abuse that would be diverted to deficit reduction.

It's not just phone companies that are wary of the proposal to raid USF. House Republicans see problems with the plan, as well.

The Consumer Electronics Association is calling on the Federal Communications Commission to wrap up its deliberations of AT&T's proposed merger with T-Mobile USA before the end of the year, saying that dragging it out longer would create too much uncertainty for businesses that rely on the wireless services provided by the two firms.

CEA President and CEO Gary Shapiro said his group is not taking a position on whether the mergers should be approved, noting that both AT&T and T-Mobile are CEA members.

"Rather, we urge the commission to decide the merger's fate in 2011," he wrote in a letter to the FCC. "Delay beyond this calendar year is unreasonable and puts the companies, their competitors and consumers in limbo and serves no countervailing interest."

Many stakeholders have said the review of the merger, which is being examined by both the FCC and the Justice Department, could take as long as a year, which would put it into early 2012. Many point to the FCC's review of the Comcast-NBC Universal merger, which took more than a year before it was approved with conditions in January.

"In the AT&T/T-Mobile situation, a fixed and preferably short period of consideration is especially important given the national importance of wireless spectrum and the role that ubiquitous broadband plays in our national innovation strategy, including the rapidly evolving demands for wireless use for everything from health care to education," Shapiro wrote.

"Accordingly, CEA appropriately asks our government to use a 21st century timetable rather than one from last century, even recognizing the ambiguities in the law that the commission must use to assess the proposed merger."

The merger has generated intense lobbying on both sides, with more than 38,000 comments so far to the FCC.

Supporters say combining the No. 2 wireless provider AT&T with No. 4 T-Mobile USA will help provide a short-term solution to the nation's growing demand for spectrum for wireless services. Critics argue that if regulators approve the deal, it will likely lead to further consolidation in the wireless industry, which will stifle innovation and drive up prices for consumers.

House Republicans continue to question how the Federal Communications Commission developed and passed rules designed to prevent anticompetitive behavior online.

Rep. Marsha Blackburn, R-Tenn., criticized what she called "collusion" between the FCC and the advocacy group Free Press on Friday. On Thursday the conservative group Judicial Watch released emails between Free Press employees and Democratic FCC Commissioner Michael Copps and his staff.

"I am deeply disturbed by the revelations of collusion between the FCC and Free Press on the net-neutrality issue. The FCC has moved against the will of the people, the wisdom of Congress, and the order of the courts, to nationalize our most productive marketplace," Blackburn said in a statement sent to reporters. She has vocally opposed the so-called "net neutrality" rules.

In the emails, Free Press offers to help Copps write an opinion piece to place in a newspaper. Copps declined the offer but Free Press helped place a commentary that Copps and his staff eventually wrote.

In response, Free Press President Craig Aaron dismissed the emails as standard procedure for lobbyists on any issue.

"As you can see from even a cursory glance at these emails, there is nothing unusual or controversial in what Judicial Watch 'uncovered,'" Aaron said in an email statement. "This is what activists do: they contact policymakers and ask them to act in the best interests of the activists' constituents. In the case of Free Press, our constituents are the American people who want better media for a better democracy. The emails don't reflect anything more than that."

Free Press also strongly criticized the final rules for not being strong enough.

House Oversight Chairman Darrell Issa, R-Calif., has questioned whether the White House helped write the controversial net neutrality rules, which were enacted in December.

But in a written response to Issa in February, FCC Chairman Julius Genachowski said the law does not prohibit "communications between commissioners and commission and staff and members of the administration."

House Republicans have voted to overturn the rules, which continue to be a sticking point in many telecommunications debates.

Nearly 20 percent of all American adults now use the Internet to make phone calls, according to a new survey released Monday from the Pew Research Center's Internet & American Life Project.

The findings show a big jump from 2007, when 6 percent of adults reported using the Internet to make calls. Overall, 24 percent of all Internet users said in the latest survey that they make phone calls online.

"People are becoming more aware of it and the devices themselves are little bit more enabling of it," Pew Internet & American Life Project Director Lee Rainie said,

The survey includes both users of video telephone services such as Skype and those who use Internet services such as a Vonage plan to make phone calls using their home telephone.

Hispanics were the biggest users, with 27 percent reporting they use the Internet to make phone calls compared with 21 percent of both blacks and whites. The survey also found that Internet phone users were more likely to be 18-29 years old, college educated and earning more than $75,000 a year.

The survey will likely be good news to Microsoft, which announced earlier this month that it is buying Skype for $8.5 billion.

The survey of 846 adults was conducted April 26 through May 22 and had a margin of error of plus or minus 3.7 percent.

While most of the usual stakeholders have weighed in on whether federal regulators should back AT&T's bid to buy rival T-Mobile USA, one unlikely player to give its two cents is the Sierra Club.

The group sent a letter Wednesday to members of Congress "to express optimism about the potential expansion of broadband that the proposed merger of AT&T and T-Mobile provides," though it did not explicitly say if it supports approval of the deal.

"Expansion of broadband technologies to rural America brings a vital 21st century infrastructure to all our communities and will conserve energy by eliminating carbon emissions related to travel and promote other efficiencies through smart grids and smart meters accessed through broadband," Sierra Club Executive Director Michael Brune wrote. "As regulators examine this transaction, they should consider these values in their deliberations."

The group has, been pushing for greater broadband access as part of the Blue-Green Alliance, a coalition of environmental and organized labor groups.

Margrete Strand Rangnes, director of Sierra Club's labor and trade program, said her group believes that if the merger is structured right, it could provide an important opportunity to increase broadband deployment.

The Communications Workers of America also belongs to the alliance and has come out in support of the merger. The CWA represents more than 40,000 AT&T wireless workers.

Many public interest groups and some lawmakers, however, oppose the merger, saying it will stifle innovation and competition in the wireless market and lead to higher prices for consumers and a likely loss of jobs.