AT&T’s Wide-Lens View of the Wireless Industry

Earlier this week, I attended the industry analyst meeting for AT&T Mobility in Atlanta, where the discussion encompassed where the company came from, where it is today, and where it is heading tomorrow. I found the content both valuable and enlightening for customers, investors — and of course, analysts.

Although I agreed to keep many of the details under my hat, I can share some of what I learned.

First of all, let me say these analyst meetings are not often exciting or interesting. Over the past 25 years, I have been to dozens and can honestly say that even though they are all important, they are rarely interesting. As an analyst, I often feel like one of those prospectors panning for gold in the Old West. I have to sift through hours of presentations, but I always find a nugget or two, so it’s worthwhile.

This meeting actually produced more nuggets of gold with less sifting.

All Over the Map

CEO Ralph de la Vega started by presenting an overview. He was then joined by John Dwyer, SVP of customer experience; David Christopher, CMO; and Kris Rinne, SVP of network technology, among others. They talked about where AT&T is today and what’s coming next, in both the short term and long term.

If you have been reading my columns, then you know I like to talk about where we came from as an industry, where we are today, and where we are heading tomorrow. So they were talking my language.

Some of the other things they talked about:

  • Many outsiders were predicting that AT&T would lose customers after Verizon and Sprint started selling Apple’s iPhone. That happened in February 2011. However, it’s been nearly two years and AT&T is selling more iPhones, not fewer.
  • The network congestion problems that arose thanks to the iPhone have been solved.
  • Churn rates are lower than ever.
  • The new Mobile Share Plan lets customers have one wireless data plan for multiple devices.
  • Wireless-only households are growing at a very rapid pace. In 2010, they accounted for 30 percent of the market. Two years later, they’re at 40 percent and still growing.
  • ISIS, AT&T’s mobile payments partnership with T-Mobile and Verizon, lets consumers use wireless phones like credit cards or cash.
  • The connected car is a huge growth opportunity. Fifty-three percent of new vehicles — something like 20 million — will be connected by 2016. Today it’s all about the front seat, but the rear seat has untapped potential.
  • AT&T is promoting its Digital Life and Mobile Premise Solutions — and much more.
  • AT&T hired a medical doctor to help craft solutions in the mHealth area. This is a huge opportunity going forward.
  • Over the next five years, we can expect at least 10 times more wireless data usage — and I would say even that projection is on the low side.
  • AT&T wireless data capacity is continuing to grow. The company is well positioned, even with long-term spectrum uncertainties. It has already entered many transactions to acquire spectrum, and it is working on WCS spectrum. Some of this is awaiting FCC approval. Short-term needs are being met, but the longer-term spectrum shortage problem needs to be solved. This is big for the entire industry.
  • AT&T has 30,000 WiFi hotspots around the United States.
  • NFC will be in every smartphone, and we will use it for mobile payments; to buy things in vending machines; as a security pass or an eKey to enter buildings; and much more.

Expanding Horizons

This little wireless device we all carry with us every day will be the center of our universe in coming years — the remote control to our lives. Of course, that much control in a single device means we’ll have to meet challenges like security and damage protection as well, but first things first.

AT&T was the first carrier with the iPhone. It was the first in many of these new wireless technology areas, and only a few companies have exploded with growth so far. Smartphones were around for a decade but didn’t explode until about five years ago. That’s the way the marketplace works. It takes a while to get started, but once it reaches critical mass, it suddenly explodes.

I expect similar growth explosions in the coming years, so buckle your seatbelts.

It was very interesting to hear that AT&T sees its wireline business being attacked by new technologies and competitors. That’s why it decided to cannibalize itself — and it seems to be working. When you pull the camera back and take a hard look at AT&T Mobility, you see a strong, rapidly growing and impressive communications company.

Not that it does everything right — no company does. However, it is very good to get a close look at an industry-shaping company. AT&T, Verizon and even Sprint are going to continue to reshape the entire industry.

Generally speaking this meeting was a great idea. It let us look at the big picture of both AT&T Mobility and the changing industry. It let us look at the challenges and opportunities — and wireless, as we have learned, is full of both.

Going forward, the way we think about the wireless industry is not only going to change, but expand.

E-Commerce Times columnist Jeff Kagan is an industry analyst and consultant who enjoys sharing his colorful perspectives on the changing industry he's been watching for 25 years. Email him at [email protected].

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Marketers: Beware Florida’s Mini-TCPA

If you do electronic marketing of any kind, you’ve been a captive audience to the ever-changing requirements of the federal Telephone Consumer Protection Act, known familiarly as the “TCPA.” But now, the state of Florida has amended its Telemarketing Act, creating what is being called the “Mini-TCPA.” Florida’s new law changes electronic and telemarketing in significant ways — even if you’re not in Florida.

Years of litigation over the federal TCPA has taught most companies to understand the different forms of consent, how to distinguish sales calls from informational calls, what kinds of call could legally gather information from consumers without straying into highly restricted “sales calls,” and what in the world constitutes an automated telephone dialing system (ATDS).

Now, just as we thought the law was settled — or at least settling — the new Florida state law overturns the apple cart. Many of our prior understandings are out the window. Telemarketing practices will have to change substantially, and the costs of violating the Florida law will be substantial.

Law Applies Even if You Don’t Do Business in Florida

The new statute covers any call made to any device with a Florida area code no matter where the receiving phone is located, and calls made to a person who happens to be in Florida at the time they receive a covered call.

In either case, the calling company will be considered to be “doing business in Florida” and therefore subject to the Mini-TCPA. That’s true even if the calling company has no way to know that these seemingly non-Floridian numbers in fact have some relationship to Florida.

In either scenario, there is a “rebuttable presumption” that the calls are covered by the Florida statute. “Rebuttable presumption” means as a practical matter that government regulators or class action plaintiffs can make you spend lots of money in attorney’s fees trying to prove that the calls weren’t covered.

For economic reasons, many businesses will end up making the business decision to settle these cases rather than litigating the law’s application to them.

Role of the ‘Private Right of Action’

The big danger presented by this statute is the claims that may be made by private parties, not government enforcement actions. That’s because the new Mini-TCPA contains a “private right of action.” Any consumer can sue you claiming you violated the statute. Those suits can be class actions, real or threatened.

Although the statute appears to limit recoverable damages to a maximum of only $500 per violation, that figure is a red herring for a couple of reasons. Plaintiffs tend to claim that each individual call to their phone is a separate violation. One consumer’s calls can quickly become multiple violations and therefore multiples of $500.

In addition, under some circumstances, the law trebles damages. The Mini-TCPA provides for triple the damages and attorney’s fees if the violation was intentional. Since marketing and informational calls are both generally the result of a pre-planned marketing campaign, every call is going to be asserted to be intentional.

Moreover, general Florida consumer law allows recovery of attorney’s fees and, potentially, statutory additional punitive damages.

The ATDS Rabbit Trail

All the noise generated by litigation around the federal TCPA about automated telephone dialing systems may have given businesses the impression that if you avoid using particular kinds of ATDS, you can be sure of avoiding liability. But here again, Florida’s new law changes the game.

Instead of diving into the controversy over what constitutes a covered ATDS machine, Florida simplifies the issue — and expands the danger zone. The new statute focuses its attention simply on “automated systems.” The definition of “automated system” under the Mini-TCPA is much broader than the federal TCPA’s.

As defined by the Mini-TCPA, it encompasses any system that does any one of three things: it either selects the persons to be called, or it dials calls, or it plays recorded messages. It’s hard to imagine a telephonic machine (including the one in your pocket) that isn’t potentially covered by this definition.

Mini-TCPA Goes Beyond Classic Telemarketing

Many businesses’ response to warnings about the applicability of the TCPA to their operations was “we don’t do telemarketing.” That’s because a distinction between telemarketing calls and informational calls has been enshrined in telemarketing regulation since the enactment of the TCPA law. Telemarketing calls were the bad ones; informational calls were the good ones. Later generations of FCC regulations, rules, and orders focus on this difference.

Again, Florida’s Mini-TCPA breaks new ground. While the new Florida statute regulates “telephonic sales calls” made for the traditional TCPA and telemarketing purposes, it appears that the new statute goes further. It now seems to include calls marketing products and services that were in the grey area of TCPA coverage. For example, extensions of credit.

“Non-commercial” calls are going to be exempt from coverage by the Mini-TCPA, but only if the caller has some level of licensure or certification e.g., IRS Section 501(c) and Florida state registration.

However, some authorities say that the statute also covers calls made for ultimate purpose of obtaining information for later use in sales. If this is the case, any calls used to harvest consumers’ personal information for later use in sales will require the called party’s prior express written consent under this statue.

Much of this sits squarely in a grey area. Litigation and additional legislation will certainly affect what the law will actually say. The true application to your individual marketing strategy is going to be hard to predict. Seeking legal counsel is going to be crucial to making wise decisions in this area.

Establishig Consent

If the TCPA taught us any clear lesson, it was that to make (almost) any call “legal” all you needed to do was get the called party’s consent.

What constitutes the appropriate level of consent under TCPA depends on various factors: kinds of calls, call technologies, kind of phone called, who was making the call, etc. For that reason, determining what level of consent is required for any given call under TCPA can require a complicated and troublesome analysis.

The new Florida law simplifies all of this: it mandates that the only acceptable consent for all covered calls is prior express written consent. It then carefully defines what prior express written consent must look like, with several required qualifying elements:

The consent must be in writing, bear the signature of the called party, “clearly authorize” a call using an automated system, include the authorization to call a particular number specified by the calling party, and inform the called party of certain enumerated rights.

In addition, the call must provide to consumers identifying information about the calling party. The new statute also requires that the calling party must maintain records of calls made and the consent obtained.

Sleeper Provisions

The Mini-TCPA, like the federal TCPA, is long and convoluted. There’s too much in the law to cover all the provisions in this short article. So here are some other provisions that may be worth a look:

  • Limitations on call frequency and timing;
  • the way information mining calls will be treated;
  • the liability of a company for the violations of its third-party contractors;
  • the requirements for callers to transmit identifying information; and
  • potential criminal penalties for certain activity.

There is good news, nonetheless: the Mini-TCPA law provides a long list of types of calls which are exempt from coverage by the new statute. However, the exemptions are many and complicated. Many provisions provide an exemption from liability under the statute, then take the exemption away with exceptions to the exemptions.

Competent legal counsel is a must before deciding that a company’s telemarketing is exempt from the statute.

A Final Thought

It’s easy to think that the real threat of this statute is actual litigation. It’s not. It’s the Hobson’s choice presented when your company receives a claim from either government or a private party.

When you receive a claim under the statute, if you weigh the costs of fighting it or settling it, you will quickly come to an ugly realization. Every claim can cost you upwards of $1500, plus attorney’s fees for the claimant, on top of paying your own attorney, plus trebled damages, and other possible damages.

It will almost always turn out that the potential out-of-pocket cost to fight even a bogus claim is going to be much larger than the settlement demands from a plaintiff. Given the possible downsides of litigation, good counsel may well urge you to settle any claim as quickly and as cheaply as possible. If you consider the economics when determining how to respond to a claim, this makes sense.

All of that puts a higher premium on prevention. Talk to your lawyer about how this statute might apply to you, what your exposure is, and how you might bullet-proof your marketing strategy.

The only sure way to win at these claims it to prevent them from being filed.

This article is provided for informational purposes and does not constitute legal advice. The purpose is merely to make the reader aware of some issues that must be addressed by legal counsel. This article cannot substitute for the advice of competent legal counsel addressing the reader’s specific situation.

Brad Elbein is a partner in the Atlanta office of Culhane Meadows, PLLC and is co-chair of the Government, Regulatory and Compliance Practice Group. Brad guides clients through matters involving telemarketing, electronic marketing, advertising, consumer laws (FTC Act, FDCPA, FRCA, TILA, and more), and defense of consumer law claims by government and by consumers.

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