Yesterday, I participated in a great town hall event here in Washington to kick off the first ever National Digital Learning Day, of which AT&T is a proud sponsor.  For several months now, AT&T has been working closely with the Digital Textbook Collaborative, composed of other members of the industry, to determine ways to bring digital textbooks into our country’s K-12 school system. 

After combining years of expertise in education technology, it was a pleasure this afternoon to present the results of our efforts to FCC Chairman Julius Genachowski and U.S. Secretary of Education Arne Duncan. 

Through what has been dubbed the Digital Textbook Playbook, we are providing school district leaders with guidance on how best to bring effective digital learning opportunities to fruition in their respective classrooms.  It is a planning resource for schools to transition into digital learning by classifying broadband infrastructure, distinguishing home and community broadband to extend access, and indentifying necessary device considerations.

The Playbook is a unique and exciting development that can help the United States achieve the goals laid out in the FCC’s National Broadband Plan along with the Education Department’s National Education Technology Plan. 

This has been an extraordinary collaboration in education technology among the public and private sectors, and it has been a privilege for AT&T to play a part in this effort.  We look forward to continuing our work in this area.

“As Reed admits, Congress gave the FCC discretion in the PCS C Block auction, and it used that discretion in a way that resulted in an auction that was a disaster for the industry and for the Treasury.  And the flaw, in our view, was not simply a function of installment payments.  It was the decision to have a closed versus an open auction.  Our point is that an auction should be open to all competitors, not just to those hand picked by the FCC.  Reed was a good and diligent chairman, and it’s characteristic of him that he’d acknowledge a mistake.  But Congress has every right to learn from those mistakes, and to insist the FCC not repeat them.  That’s what the House spectrum bill does.  The FCC should get behind it and put the interests of the country first so that we can quickly move forward to address the looming spectrum crisis that we all agree is the biggest threat to innovation, job creation and growth for the wireless industry.”

“Despite Reed Hundt’s recollection, the FCC’s track record on auctions is not an unbroken string of successes.  In fact, Hundt’s tenure saw perhaps the biggest single fiasco of this sort, the PCS C Block auction.  In that situation, the FCC used its discretion in a way that set aside valuable spectrum for ‘designated entities’, and excluded otherwise qualified companies from bidding.  Over half of the 493 licenses from that auction were later returned to the government for non-payment, and the licenses of the largest winner, NextWave, were tied up in bankruptcy litigation for years.  In that case, the FCC’s use of its ‘discretion’ ended up costing the U.S. Treasury billions, and left vitally needed spectrum unused for years.   

“No one is suggesting the FCC’s conduct of auctions be micro-managed.  But Congress – not the FCC – sets policy, especially when it directly impacts revenue needed for deficit reduction.  And there is no more fundamental policy point than whether a spectrum auction should be open or closed.  Congress has every right to tell the FCC it should not be picking winners and losers in the wireless market, or using its ‘discretion’ to tilt the playing field. We need open auctions where every competitor has a fair chance to participate, and that is what the House bill provides.”

“Reform of the government’s universal service Lifeline program is long overdue.  The Lifeline program administered by the FCC is growing at an alarming rate – the fund had 33% year-over-year growth from 2010 to 2011 alone and has more than doubled in size since the end of 2008.  If every person eligible were to subscribe to the program, the fund would stand at over $5 billion dollars – three times the size of the fund today.

“While the steps the FCC announced today are commendable, we fear the speed of reform is getting far outpaced by the actual dollar growth of the fund itself.  Policymakers must begin to discuss whether it continues to make sense for an independent agency to administer a fund this size with no Congressional oversight or decision-making input to the appropriate size of the fund.  Counterpart programs for both energy and food are not administered in this manner.  They are subject to the Congressional budgetary processes and are not funded by taxing the users of those services – no one must pay an 18% tax on the electric bill to fund the low income electric programs.  One has to wonder why communications consumers are treated differently in this regard.

“While that discussion is hopefully taking place, we will continue to work with the Commission to implement these reforms and hopefully work to move quickly on the most necessary reforms (like taking eligibility decisions out of the hands of consumers and service providers) addressed in today’s Order and Further Notice of Proposed Rulemaking.”

As AT&T’s Chief Privacy Officer, every day is privacy day for me and my  team  It’s a topic we’re thinking about, talking about and acting upon on an ongoing basis. We work hard to anticipate and prepare for developments in the constantly changing world of privacy.  Recently, for example, we have been focusing on instilling best privacy practices in our work with apps developers and online behavioral advertising.

At AT&T, we’ve long recognized that our privacy commitments are fundamental to the way we do business every day.

We know that we must respect and protect our customers’ privacy in order to win not only their business, but also their trust. We have been a leader in thought and action in the privacy arena:

• We pledge to protect your privacy and keep your personal information safe and we have put in place strong safeguards to deliver on that pledge.
• We are committed to transparency in communicating our privacy policies to our customers in plain language that is readily available and easy to read.
• We practice “privacy by design” – a process through which we make sure that privacy considerations are addressed throughout the development process of any product, service or application.
• We support the continued need for consumer education and awareness through programs such as our Smart Controls website and through alliances with many government and nonprofit agencies that help consumers of all ages understand online safety and privacy protections.
• We actively participate in our industry’s ongoing efforts to foster programs that provide customers with privacy best practices.

AT&T is proud to be a leading player in the communications revolution that is remaking our world. We provide consumers, businesses and organizations with the tools they require to live, work and play most effectively in this era of ubiquitous electronic communication.  And we understand that because of this role, it is incumbent upon us to keep our customers’ trust and loyalty by maintaining their privacy.

You can learn more about Data Privacy Day here.  And you’ll find much more information on AT&T’s privacy commitments, including an FAQ and educational videos, on our website.

That is the opening sentence of the National Broadband Plan, and the challenge that the Plan spends almost 400 pages trying to address.  And that’s the point Sprint has ignored entirely in responding to my recent blog. 

Fact:  There are vast territories in rural Kansas and Oklahoma where Sprint used to offer their customers a 3G on-net broadband wireless experience where they will now rely on roaming (or, the practice of piggy-backing on competitors’ networks).  Sprint may now claim that it had some type of “infrastructure” deal which it characterizes as “roaming” but that is not what Sprint proclaimed in its maps in identifying the “Sprint footprint” and it is certainly not what Sprint told its customers in the affected areas when it started selling them iPhones last year. 

Fact: When those same customers are roaming in those territories after March 1, 2012, they will now be subject to data limits and overage charges.

Fact:  Sprint has un-deployed spectrum throughout all those territories in Kansas and Oklahoma.  Plenty of it.

Fact:  Rather than use the spectrum it owns throughout these states to replace this soon-to-be-lost footprint, they are choosing to go down the path of using other companies’ network investments instead of their own. 

Fact:  The only reason Sprint can do this (and conserve cash, by the way, while doing it) is because of the two FCC Orders I referenced in my previous blog.

The question we posed is why government policy in the broadband age should favor and incent the use of roaming over the investment in and deployment of broadband networks.  After a long debate in the record on whether the FCC should mandate data roaming, the Commission concluded – we think wrongly – that data roaming would incent deployment and thus adopted a data roaming mandate.

Sprint’s maps amply demonstrate the error of that policy direction: 

Why invest in infrastructure, particularly in hard to serve rural areas like those in central Kansas and Oklahoma, when you can “conserve cash” and simply use the networks of your competitors?

AT&T, on the other hand, has been aggressively building out spectrum across the country to bring advanced broadband services to as many consumers as we can.  We recently expanded our LTE buildout to 26 markets. 

Cash conservation is great for the bottom line, but it doesn’t get broadband networks built.  Sprint’s spokesman can try to gussy up this policy as pro-consumer, but there is nothing pro-consumer about shrinking your network, especially for the consumers who live in those affected areas.

The evidence is mounting that the FCC made a bad mistake with these rules, a mistake that could undermine all their lofty promises – and the President’s promises – about advancing broadband deployment.

While many people may not have heard of it yet, there is a critically important global meeting happening later this year in Dubai.  Known as the WCIT, the World Conference on International Telecommunications is crucial because it will revise the International Telecommunications Regulations (ITRs), which essentially lay out the ground rules for the global interoperability of networks and exchange of telecom traffic between borders.  

The WCIT, which falls under the umbrella of the International Telecommunication Union (ITU), will mark the first time the ITRs have been revised since they were established 24 years ago.  

The process for revising the ITRs began back in 2006 when it was decided by the Plenipotentiary Conference that the ITRs needed to be reviewed.  AT&T was there six years ago and we have been working hard with the United States Government and industry throughout.  As one way to help people understand this important process, on behalf of AT&T, I have been working as chair of the International Chamber of Commerce’s Task Force on Internet and Telecoms Infrastructure and Services (ITIS) along with the 120-country business community membership of the ICC as it prepared its views on successful ITRs.  Just last week, the Task Force released a paper outlining the ICC’s views and recommendations to ensure that global telecom markets continue to grow and develop.    

Revising the ITRs will require great care.  It is critical that we maintain the pro-competitive model that has positively transformed global communications for the past quarter century.  

The ICC’s key recommendation to ITU Member States is that the revised ITRs focus on high-level strategic and policy principles relating to the provision of international telecom services.  Given the rapid pace of change in the global marketplace – where new technologies and ways of communicating are ever-evolving – any treaty-level focus on specific regulatory and technical issues must be avoided. Out of date policies could indeed stifle innovation.  The ICC also recommended that the ITRs focus on principles of international cooperation, rather than mandating new intergovernmental regulation.  

As we get closer to the WCIT, the ICC and its members will make further contributions to help foster meaningful and productive discussions for all stakeholders. In fact, this week, several of us are attending the World Radiocommunication Conference (WRC) in Geneva and, in addition to the crucially important international spectrum planning decisions at the WRC, we are already talking with delegates from around the world about their priorities for the WCIT.  Along with my colleagues, I will be blogging regularly on important developments as we all gear up to convene next December in Dubai.  Stay tuned.

Sprint rationalized its move by explaining that it is selling a lot more smartphones these days and that its customers are using a lot more data so it needs to conserve its cash.

“The move is a cost-cutting measure for Sprint, which has been selling more smartphones and seeing its customers using more data, Cook said.”

Now that is a real head scratcher.  If its customers are using more data, don’t you think it would be logical for Sprint to actually use its cash to build more capacity?  I mean, at AT&T we have spent a lot of time and money investing in recent years racing to keep up with our subscribers’ surging broadband demands precisely because those demands are growing so rapidly.  Verizon has been doing the same in building its own 4G LTE network.  But at Sprint, the logic is different, and investment – Sprint investment – does not appear to be the solution.   My guess is that Kansas and Oklahoma represent the tip of tip of the iceberg here.  Does this represent the beginning of Sprint’s Disappearing Network Vision? Will this disinvestment story go nationwide and appear in your local paper soon?

And how can Sprint get away with using “other people’s investments” rather than its own?  Because the FCC intervened in the competitive wireless market to ensure that Sprint doesn’t have to invest in order to fill out its footprint.   Mind you, someone has to actually do the investing to make this possible, but thanks to the FCC’s Orders, it doesn’t have to be Sprint that does that investing.  So, what am I talking about?

First, in 2010, the FCC reversed itself by eliminating the Home Market Rule.  That rule, which was pretty logical and straightforward, said that, if a carrier owned spectrum, it was good public policy to require them to build out that spectrum and therefore they should not be able to demand roaming from other carriers in those “home markets.”  Thus, if Sprint owned spectrum in Kansas and Oklahoma, it wouldn’t have a regulatory “right” to roam.  Then, last April, the Commission extended roaming rules that had previously been limited to voice services (and that now contain no Home Market exception) to broadband infrastructure.

In arguing to impose those requirements on its competitors, both Sprint and the FCC said that broadband roaming obligations would actually promote “the deployment of broadband facilities and thus expand coverage.”  Good in theory, I suppose, but not in practice, as I stated at the time.   As a result of those two FCC Orders, Sprint can now use other folks’ networks rather than pony up its own investment dollars.  Nice work if you can get it.

Fortunately, this issue is teed up squarely before the D.C. Circuit Court of Appeals this year.  Oral argument will probably occur this spring.  We remain hopeful that the Court will reject the FCC’s market intervention here and realize that this regulation actually disincents investment by everyone in the marketplace at a time when promoting investment and job growth should be priority #1 for every policymaker in this country.  And it serves as another lesson in why unbridled discretion to shape markets in the name of competition is not always good public policy.

AT&T recently was a sponsor of the NBC4 Health & Fitness Expo in Washington, DC., to help grow awareness of “It Can Wait,” an AT&T campaign dedicated to teaching consumers about the dangers of texting and driving, a very relevant issue to our health and safety.  Our booth featured a texting while driving simulator, which demonstrated even to the most seasoned driver how dangerous texting and driving can be.  Click here to watch NBC4’s Doreen Gentzler take a turn at the wheel.

In addition, I had the opportunity to participate in a panel discussion with others who are on the front lines of educating consumers, particularly teenagers, about texting while driving.  I was joined by Sandy Spavone, executive director of the National Organizations for Youth Safety, Stacy Horne from AllState, and two teenagers from Maryland and Virginia, who lead efforts in their communities to educate their peers about the dangers of texting and driving.  These teens will be leading state summits, made possible by AT&T, to address texting and driving among their peers in the coming months.

The panel discussed the ways in which we’re educating teens and parents and how we can change behaviors.  The teen panelists noted that encouraging other teens not to text and drive works best through word of mouth and “peer pressure” – if your friends aren’t doing it, you won’t either – but also that visual cues like The Last Text video AT&T produced gives teens a very real picture of what can happen when you text and drive.  The panel addressed current texting and driving policy, agreeing that education must be a major component and applauding public officials like U.S. Department of Transportation Secretary Ray LaHood, who have supported public awareness efforts and have no doubt helped save lives through their work with public/private partnerships.  

Check out this short video of the expo as well as the AT&T simulator and remember that, when it comes to texting and driving, it can wait.

The FCC maintains that its “goal and intention is that every carrier — big, medium, or small — that needs additional spectrum should have a meaningful chance to bid for it.” (emphasis added).  That concept, ironically, is entirely consistent with pending legislation for incentive spectrum auctions, which states that the Commission cannot prevent an entity from participating in the incentive spectrum auctions if that entity meets the technical, financial and character qualifications required to hold a license. (It should also be noted that it’s consistent with the economists’ letter to the President the FCC referred to in its response to our statement).  The proposed statutory language ensures any qualified entity’s right to participate in the auction and prohibits the FCC from blocking an otherwise qualified bidder from participating in the auction – i.e., creating rules designed to pick winners and losers in the auction itself.

The FCC has done some creative tinkering with auctions in the past, with dubious results.  For example, the FCC created set asides for Designated Entities, which led to valuable spectrum laying fallow for years when a major DE landed in bankruptcy.  They also imposed conditions on both the C Block and D Block spectrum in the recent 700 MHz auction.

From AT&T’s perspective, however, we fear that this time around, some of its tinkering may be aimed at specific auction participants, like us.  Why are we fearful?

Two years ago, in the license transfer deal between SkyTerra and Harbinger (now known as LightSquared), a mysterious condition appeared at the last minute that imposed conditions if LightSquared were to engage in a commercial relationship with AT&T or Verizon.  Not a single commenter in that proceeding asked for any conditions, yet that one miraculously appeared at the 13^th hour (the actual first mention of the infamous Verizon/AT&T condition was not posted on the FCC website (March 31, 2010) until 5 days after the FCC had approved the Order (March 26, 2010)– and over a month after that particular ex parte had been filed (February 26, 2010) at the agency, see screen shot below.

And let’s not forget that the FCC’s annual Wireless Competition Reports no longer address the competitiveness of the wireless industry (which is frankly remarkable to anyone who just came back from CES).  Instead, the report discusses the different “values” of different swaths of spectrum, like the below 1 Gigahertz spectrum that would be auctioned off under this legislation, which could make it harder for certain carriers to obtain that spectrum.

And in our recently approved Qualcomm acquisition, the FCC originally proposed for the first time to move the spectrum screen downwards, and to change the definition of what spectrum qualified for that screen.

So, yes, we are concerned that the FCC might actually design auction rules that radically restrict AT&T’s ability to participate in these auctions, which is why we care about this language.  Now, if the FCC wants the specific authority to actually block qualified companies from purchasing spectrum or limiting the spectrum they can purchase in these auctions, then it should be transparent and upfront with Congress about its intentions – as well as its reasoning for seeking such authority – so we can all have an informed public debate about the issue.