Cingular and ATT conbined will control 800mhz in FL?

I don't think it's unfair for Cingular to keep both 850 liceneses if they get to. People rarely care about what frequency or techology their provider uses as long as it works for them. You'll still have plenty of competion left in FL. By the way it's NOT true that Cingular would be the only 850 carrier for Florida. ALLTEL operates a 850 network on the entire western side of the state. ALLTEL appears to cover over 50% of Florida with a 850 network.

Even if ALLTEL isn't avaible in your area you will still have plenty of choices. You will have Cingular, Verizon, Sprint, T-Mobile, and Nextel to choose from in most parts of Florida. That's plenty enough competion.

 

ALLTEL's 850 network in Florida.

 

There's also Verizon Wireless's little 850 license in Panama City and Commnet Wireless in the Keys. (USCC is selling Fort Pierce to ALLTEL.)

There's enough competition and enough CDMA coverage from 1900 MHz carriers (VZW, SPCS) along the Atlantic coast of Florida and in Orlando that I personally have no problem with Cingular being allowed to keep both 850 licenses there. If we were talking about a more rural area or one with a lot less CDMA, I would.

-SC

 

I totally agree with you. Florida will still have some 850 CDMA providers and on top of that you have some good 1900 CDMA providers. Florida is pretty flat and populated so it's really not that hard of a state to cover. I have no issues with Cingular getting to keep both 850 licenses for Florida.

 

I understand the difference between 800 and 1900. Given the same tower spacing yes 800 will penetrate better however PCS towers are usually closer. If a PCS Network is built out properly it can have just as good building penetration as a 800 network.

Florida isn't NYC either by the way. NYC is much harder to cover with all the buildings and the fact that the NYC/NJ area isn't totally flat. Florida is entirely different from NY. By the way despite Verizon being a PCS carrier in Florida if you read online it's still the preferred carrier for Florida. Verizon and ALLTEL seem to usually get the best user reviews from wireless users in Florida.

 

Adam,
Your logic and technical application to the discussion are valid. However, the law preceeded the Cingular buyout of AT&T, and there is no legal limitation on how much spectrum any one carrier can own...as long as "competition" exists. The law that allows Cingular to have both A & B channels in the same market is almost 2 years old.

Fortunately, the FCC and DOJ are looking at this transaction rather closely because it will set the path for other consolidations to follow. The DOJ is listening to consumer groups, but their concern is not in areas like Florida where there is often 4, 5 and 6 competitors in a market, regardless if frequency. It occurs in rural areas like Texas where consolidation will leave only 1 or 2 other competitors, and Cingular has already ceded those markets will need to be spun off.

So there is a middle ground in a few markets where 2 or 3 competitors will rermain, and that is the DOJ's concern. They are really trying to define "competition", and they are giving rural markets a higher value than their economics would show. Just like they did for DirectTV/Echostar.

This is great news for consumers, but it has nothing to do with 800 MHz vs. 1900 MHz consolidation. The carriers have always wanted a level playing field, and now they have it.

 

FCC ended spectrum cap in all markets so the FCC and DOJ can look at competition number of carriers and market control. Even if they're would be 4 carriers after the deal if the DOJ sees to high of a customer base of Cingular and the other providers would have a hard time to compete they will foce to divest.

The Departement of Justice did not look into VZW Qwest deal since no spectrum cap and no exchange of costumers so no change in market control.

 

Just a bit on Florida being "easy to cover." This may be true down south, but in central and north Florida there is an extensive tree canopy. These trees do have an impact on how easy it is to cover an area.

 

How good would you feel if it was Verizon buying both 800Mhz blocks? Let's say if Verizon buys Alltel, they would get both 800Mhz blocks in NC and SC. It seems to me you would not have a problem with this.

I say this because in a previous post you clearly stated that you didn't like that both 800Mhz blocks were held by GSM carriers (AT&T and Cingular) in many parts of FL.

1900Mhz carriers have grabbed enough market share, that the FCC decided that the argument about 1900 vs 800 is proven to be totally irrelevant to affect competition regardless of certain people's feelings. Just look at T-Mobile. They are 1900Mhz only and they are the fastest growing carrier after Verizon. Years of market monitoring by the FCC and DOJ have proven that this argument of 800 vs 1900 is irrelevant for competition.

In NYC, AT&T is no longer the carrier of choice despite the fact that they use 850Mhz. T-Mobile and Verizon seem to be the current winners. AT&T was just struggling to break even in the second quarter. So, time and time again it is proven that market share is not defined nor affected by the frequency blocks used by the network. It is the network reliability that will dictate the carrier of choice in a particular area, whether that is 800 or 1900.

Despite the fact that 800Mhz has better building penetration, that doesn't seem to be a market driver as seen by market reports and its trends.

 

There are already areas where both 800 blocks are owned by carriers operating the same technology. In northern Ohio (Cleveland area) Verizon and Alltel are the 800 carriers. Both ATT and Cingular are 1900.

And I guess we are leaving Nextel out of this discussion and focusing only on CDMA and TDMA/GSM?

 

See, this is where the FCC doesn't agree with you. The US government plays no part in which technologies should be used in any frequency block. That's why the US is not dominated by a single technology like Europe and most of the rest of the world. The feds don't stick their nose in which technology is used simply because it changes all the time and it allows for companies to evolve and develop new ways to compete. In the past you had TDMA/CDMA, now we have GSM/CDMA. Next, we will have WCDMA/CDMA2000. What's next? The feds don't care about it which is why there is no problem with having any one technology being offered in both 800Mhz blocks.

If the FCC controlled what technology is used at 800Mhz, then many regional US carriers would be forced to use either TDMA, CDMA or GSM depending on what the carrier in the other block is using and this simply creates an unfavorable position for many small carriers. Such is the case of some carriers that chose to go CDMA from TDMA and where the carrier in the other 800Mhz block as already CDMA. These carriers simply would not have the freedom to choose what makes most business sense for them. In addition, some regional carriers are running BOTH CDMA and GSM or TDMA in the same block in order to get some roaming revenue. If the FCC controlled which network goes in the 800Mhz blocks, then these carriers would lose potential roaming revenue.

Another problem about FCC control of the technology used is that it can deny entrance of carriers to new markets. Such is the case of Alltel. If Verizon has one 800Mhz block in one market, that means Alltel is barred from entering that market using 800Mhz and they will be limited to 1900Mhz.

So you see, trying to get the FCC to control network technologies would create even worse conditions.

 

I don't mean to be rude, but let me ask you this. How many different ways and times do you need to ask one question?

 

I need to address these 2 above issues.
On your 2nd point of "Most Carriers do not want 2 blocks of 800Mhz...., This is wrong. Both AT&T & VZW in NY/NJ, for example, would have loved to have been able to grab the other block of 800Mhz, vs 1900, it simply wasn't available to them, & they "bought what they could get".
On the 1st point about ATT/Cing "Will have to" maintain 2 existing sets of towers..... Why??? This is also wrong.
If they decide to keep both 800 blocks, they could, (& Most likley would), simply "program" both blocks of channels as 1 system, into 1 set of towers, & sell off, or relocate much of the remaining equipment to other Cingular markets, perhaps cherry picking a few specific sites to keep from the 2nd block, based on their combined coverage maps. .... Remember, if they get a license for both blocks, this simply allows the carrier the use of all these channels. There is no "requirement" of any kind that they would have to maintain 2 seperate systems or tower/cell site sets across the same coverage area....

 

But there already is an 800 CDMA carrier in (parts of) FLA!

 

That's the reason I see no difference between the merged Cingular having both 850s than AT&T having one 850 and Cingular having the other, or VZW having one 850 and ALLTEL or USCC having the other, or Dobson having one 850 and Cingular having the other, etc. -- it still results in all CDMA or all TDMA/GSM being at 1900 in certain markets: most of east Tennessee, Arizona and New Mexico, the entirety of the Carolinas (save for Myrtle Beach where SunCom has 850, and areas where USCC, Ramcell, and Carolina West have both TDMA and CDMA), Richmond KY, Panama City FL, southwestern Louisiana, etc. etc. etc.

Yes, I am ignoring Nextel (and the smaller iDEN carriers like Southern LINC and Nevada Wireless) since they do operate in the ESMR band and are completely separate from the cellular and PCS bands.

-SC

 

I am afraid that you are not comprehending something very simple: The FCC DOES NOT care what's in each band. It could still be Analog for all they care. In fact, there is one carrier here in NJ that runs Analog only at 800Mhz. Therefore, nobody should be questioning what's allowed and not allowed in the 800Mhz band. Clearly, all cellular technologies are allowed (CDMA, TDMA, GSM, Analog, Fill-in your own technology here, etc.) and they don't care which one is used in either A or B blocks. Therefore, it is perfectly legal and has proven not to hurt competition in anyway for many years, to have both bands using a single technology. The FCC does NOT award GSM or CDMA licenses. They award WIRELESS licenses. This means you can use whatever wireless technology you like.

 

I copied and pasted this right from the the press release on the FCC website when the eliminated the spectrum cap....

The FCC will sunset the spectrum cap rule effective January 1, 2003. The transition period between now and the sunset date will afford an opportunity for the markets to prepare for the FCC's shift from an inflexible spectrum cap rule to reliance on case-by-case review of CMRS spectrum aggregation. The transition period will also permit the FCC to consider what guidelines, procedures and resources may be necessary for the FCC to perform case-by-case review of transactions involving transfers of control of CMRS spectrum in an effective and timely manner. The FCC raised the spectrum cap to 55 MHz in all markets during the transition period. This change is intended to address certain carriers' concerns about near-term spectrum capacity constraints in the most constrained urban areas.

The FCC eliminated the cellular cross-interest rule in MSAs in recognition that the cellular carriers in these areas no longer enjoy significant first-mover advantages. The FCC retained the cellular cross-interest rule in RSAs because cellular incumbents generally continue to dominate the market in those areas. However, the FCC noted it will entertain - and be inclined to grant - waivers of the rule for those RSAs that exhibit market conditions under which cellular cross-interests may also be permissible without significant likelihood of substantial competitive harm. The cellular cross-interest rule in RSAs will be reassessed as part of the FCC's 2002 biennial review.


So I guess this could go either way when it comes to the FCC, they may make them divest or they may not, guess we will find out soon enough.

 

I know carriers can have the same technology in the same band. But that's not what I am saying. I am just saying that the FCC does not care one way or another. So your statement "AS LONG AS THERE IS COMPETITION in the BAND" is not true and not considered by the FCC. But I guess the FCC and you are going to disagree on this one since you can't understand that the FCC does NOT consider this to be anti-competitive. This is just your opinion. I am just explaining to you how the FCC views licensing and competition. There is no such rule that says that both 800Mhz blocks must have different technologies. That's NOT the concept of competition. What you need to understand is that whether both 800Mhz blocks are CDMA or GSM, there's still the same level of competition as if they had different technologies in both blocks. It all depends on how many wireless companies offer service in the market, how much market share the companies have and the amount of spectrum controlled by the company. They make no distinction on whether the amount of spectrum is 800Mhz or 1900Mhz. So, it doesn't depend on whether the carriers have 800Mhz or 1900Mhz. That's IRRELEVANT to the FCC. They DO NOT review spectrum holdings per band. They review COMBINED TOTAL spectrum control (800 + 1900). In addition, they also review how much control of the market there is (number of customers). Therefore, that's why they are examining mergers/acquisitions on a case-by-case basis.

The only way Cingular having both 800Mhz blocks can be viewed as anti-competitive is if they end up with too much control of that particular market. Such is the case where there is only AT&T, Cingular and Verizon in the market. In this case, eliminating one competitor would be seen as anti-competitive. But if AT&T and Cingular both have 800Mhz in that market, it is not taken in consideration for reviewing purposes unless it is an RSA.

The FCC may more easily require divestment if Cingular has one 800Mhz block plus two 1900Mhz blocks and AT&T has three more 1900Mhz blocks. In this case, they would have too much spectrum control even if they only have one 800Mhz block and this is what the FCC reviews to see if it is anti-competitive.

Whether you agree with the FCC or not it's another story, but that's how they operate. It's not my rules, nor my opinion. I don't think you'll be going anywhere by trying to impose your own views on the FCC.

 

Just for the record my market has 2 CDMA carriers in the 800 band and it's not any hinderance to competition.

 

It's completely possible to build a 1900 network that BEATS an 850 carrier in indoor and residential coverage. I know quite a few places (like a supermarket near my house) where T-Mobile and/or SPCS (both 1900 everywhere) work fine where both VZW and Cingular (both 850 here) don't work well or at all, and there are quite a few inferior 850 carriers, predominantly in rural and secondary markets (like the AMPS-only carrier in NJ that bobolito mentioned, ALLTEL in Myrtle Beach, etc.), where 1900 carriers have better coverage. In Los Angeles and other markets, SPCS is widely considered to be better than AT&T, who's primarily 850 there.

As for the "fringe area" issue, it is unlikely that the FCC will allow a carrier to control both 850s in an RSA, save perhaps for some relatively heavily populated RSAs with lots of competition and 1900 buildout, because rural areas inherently have less competition. (If it weren't for Commnet Wireless and Congress, the Florida Keys would probably be considered an RSA where Cingular would be allowed to keep both 850s.)

-SC