OPINION

Thumbs Up or Down for AT&T + T-Mobile?

So you’ve heard that AT&T Mobility wants to merge with T-Mobile. There are two main questions on everyone’s mind: Is this deal good or bad, and will it happen or not?

Whether it’s good or bad, of course, depends on your perspective. It will be good for some and bad for others. I have heard many opposing opinions on this merger.

While I initially thought it was just another deal that would be approved, I began to realize that many questions needed to be considered.

I’ll consider the pros and cons of the AT&T-T-Mobile deal, and then in my Pick of the Week section, I’ll tell you about Lightsquared.

Transformational Event

As the next several months pass, there will be a lot of debating over AT&T and T-Mobile. This is just the beginning. An exploration of some of the arguments for and against this deal will hopefully make it easier for you to decide which side you are on.

At this early stage, I believe this merger can be approved. However, it will be a sticky mess before the companies get there.

The question is this: What price will AT&T ultimately pay? Based on what I’ve heard so far, I have a feeling it won’t be cheap. Approval will likely come with a hefty price tag that will affect investors, customers, competitors and suppliers.

This last week has been exciting, and we just started this game. I gave countless interviews with newspapers, magazines, television and radio stations. (You can read many of them on my website.) Like yours, perhaps, my opinion has already begun to mature over the last week — and it will likely change over the coming months as both sides talk.

This is a very large deal that will have long-lasting impact on the entire industry. This is not just about AT&T.

This is one of those industry-reshaping events, so I think it is important to ask the right questions and make sure we think of everything before regulators decide yes or no. Even with all that thinking, we will not get it all. We never do. The industry continues to change, and unexpected results often occur.

Many think this is a good deal, and many think this is not. The funny thing is, they are both right. AT&T and T-Mobile executives love it. Sprint Nextel does not. Verizon Wireless so far does not have much of an opinion but is not opposing it. AT&T investors seem to love the idea. Investors in many smaller competitors don’t.

Customers love and hate the idea. They love the idea of more spectrum and capacity improving their connection because they have had problems in the last few years. Some T-Mobile customers are happy because they see an improvement in their service.

On the other hand, T-Mobile customers are generally happy with their existing service, while AT&T customers are not as happy. Workers and executives at T-Mobile are generally not happy, because many of them will be cut.

Sprint Will Fall Behind

When we listen to AT&T or T-Mobile, all we hear are the good reasons for this deal to get done. That’s fair enough since they want it. However, it is just as important to listen to the many arguments against the deal. Then weigh them and compare them. Then put them in order, most important to least important.

We have seen this industry transform itself over the last decade. In the 1990s, we had dozens of smaller, regional industry competitors. Today, after waves of mergers, we see fewer, larger, national players.

If anything, it seemed Sprint and T-Mobile would get together. They have been talking off and on over the last several years. This deal with AT&T surprised everyone.

If Sprint had acquired T-Mobile, it would have produced a very different result. It would have increased the size of the No. 3 competitor, and the result would have been a more competitive three-way race. That would have been good — and easier to get done.

Instead, this current proposal would turn AT&T into a bigger giant, followed by Verizon, which is also a giant, and it would leave Sprint even further behind than it is now. That is not good and will make this deal tougher.

I originally thought there were plenty of competitors. There would still be a big three, plus a few smaller competitors. However after listening to the arguments against the idea, and after thinking this through over the last week, I am starting to realize that is not the case.

Instead it will be the big two — AT&T and Verizon — with their wireless and wireline businesses competing with each other. Sprint will be a very small player in comparison, even though it has been recovering.

That is another interesting part of this story. If Sprint were still struggling the way it was a few short years ago, this deal wouldn’t stand a chance. However, now that Sprint is recovering and looking better and stronger, AT&T and T-Mobile have the guts to try to get together.

Serious Scrutiny Required

This deal will save AT&T’s bacon. It was the first to go into smartphones full force — before competitors who are still trying to catch up. This flood of Apple iPhone traffic started a data bottleneck at Ma Bell that the company still hasn’t fixed.

Extra spectrum is just what AT&T needs — it’s not just about size. It’s also about good quality service. This will give the company the spectrum and the wiggle room it needs, for now. Until it overloads again anyway.

Customers often complain about AT&T quality and service, but the company is still growing rapidly, so this does not seem to be a real problem.

These are all long-term questions and they require long-term answers. Unfortunately, this merger is a short-term fix. One step at a time, however. This will turn AT&T into the largest competitor once again. The next step may be what my Pick of the Week is about at the end of this column.

I have been asked another interesting question. Will they stay in Atlanta? I have heard they may be moved to Dallas. Who knows? Much of the decision-making is already there. If so, that would be a big blow to Atlanta.

I am not saying AT&T’s merger ambitions should not be permitted. I am just saying there is so much more to be considered and debated this time around. Previous mergers were approved because there were still so many competitors. Now, however, the competitors are small in number. There are only AT&T and Verizon as the big two.

After Sprint Nextel, there is an assortment of smaller firms like Tracfone and MetroPCS, and regional players in each marketplace like Cellular South and U.S. Cellular. These are good players, and they are an important part of the mix, but they are not large enough to matter in this debate. And this merger would make them smaller than ever in comparison.

So, when AT&T and T-Mobile point to a very robust and rapidly growing wireless marketplace in order to be approved to merge, we should realize that this may be stretching the truth quite a bit. If this merger takes place, AT&T and Verizon will control what — 89 percent of the market?

At the end of the day, this deal may happen. If it does, there will be good and bad parts. We should just make sure we don’t just quickly and blindly approve it. This is an opportunity to shape the future of the wireless business going forward. It is not only an opportunity, but also an obligation. If this merger goes through, it will impact everyone — customers, investors, workers and competitors — for many years to come. Jeff Kagan's Pick of the Week

For my Pick of the Week topic, I’ll offer some thoughts about Lightsquared, which may play a role in giving wireless carriers more data capacity. It does not offer service yet, and it continues to send out mixed signals, but it continues to build.

Lightsquared CEO Sanjiv Ahuja gave a keynote at last week’s CTIA show and was on CNBC describing what it is trying to do, and it sounds impressive. It is facing some stiff technical problems that it needs to overcome, but it also has a great idea.

The industry players need more wireless data capacity, and Lightsquared would provide it.

Phil Falcone is a single man with a big dream, and he is working to make this a reality. He sees a growing wireless opportunity and wants to be a part of it.

Lightsquared is striking deals with industry players. For example, last week it announced deals with Best Buy and Leap Wireless, and this week, there have been reports of interest from cable television companies like Time Warner and CableVision.

Nothing is certain yet, but Lightsquared is inching its way closer to becoming a real competitor. We’ll have to keep our eyes on it and hope for the best.

Jeff Kagan is an E-Commerce Times columnist and industry analyst following wireless, telecom and healthcare technology. He is also an author, speaker and consultant. Email him at [email protected]. Read the first chapters of his new bookLife After Stroke now available at Amazon.com and Barnes & Noble.

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Why the Real Estate Industry Should Embrace the Cloud

The increased adoption of cloud computing over the past decade has enabled businesses across industries to meet their growing technology needs while efficiently gaining access to exciting new tools.

However, not every industry has kept up with the evolution of cloud technologies brought forth by digital transformation. A prime example is the real estate industry. Overall, the real estate sector has been slow to digitize operations and move to the cloud; leaving agents, brokers and their clients underserved.

Cloud computing can cover a lot of ground, with both infrastructure-as-a-service and software-as-a service availability. There is great potential for the real estate industry’s future in both areas.

When properly implemented, cloud computing accelerates the innovation and digitization of real estate services, bringing new apps and tools to the market more quickly. This also adds even more value to the buying and selling experience for agents, brokers and consumers alike.

While the cloud offers much potential for the real estate industry, it is important for companies to have an informed idea of what they want to accomplish before moving some or all their IT functions to the cloud. Don’t just jump on the cloud bandwagon; instead, determine what goals you want to achieve by moving to the cloud and develop a plan for an orderly transition.

If a company’s cloud infrastructure ends up looking exactly like its previous on-premises setup, it’s probably not taking advantage of all the benefits the cloud can offer. Real estate companies moving to the cloud need to think strategically about adding value through the transition.

With that caveat, there are tremendous benefits for real estate companies that move to the cloud.

More Data, More Power

A seemingly immense obstacle real estate companies face is the daunting task of implementing cloud-supportive infrastructure. But the truth is that real estate companies don’t have to plan, build, or operate their own data centers.

Instead, the cloud infrastructure providers can set up and maintain the infrastructure while real estate companies focus on what they do best: selling properties, serving customers, and equipping agents and brokers with the best tools to help them do their jobs.

Cloud infrastructure also offers real estate companies the computing power to run modern tools like data analytics and artificial intelligence. These technologies can help real estate companies find new customers, identify people likely to be interested in buying or selling their homes, and match customers to the best real estate agents to service their needs.

Real estate organizations often have access to huge amounts of market and customer data. However, the sheer volume of data makes it difficult to capitalize on. With cloud computing, real estate companies can gain access to the massive computing power needed to crunch the data, while paying only for the time they use that infrastructure.

Mobility and Disaster Recovery Solutions

Another benefit of storing data in the cloud is that it’s accessible from various devices, which is a boon for the growing mobile workforce. Agents, brokers, and home buyers and sellers are increasingly using smartphones and tablets to get work done remotely. The cloud is much more flexible, accessible, and secure than being tethered to a physical hard drive or on-premises server.

Furthermore, companies that transition to the cloud don’t have to build and maintain a remote disaster recovery site, which can be labor-intensive and time-consuming. Instead, critical data in the cloud automatically fails over to a secondary site in the event of a disaster. All that is required to access data in the cloud — anytime, from multiple devices, anywhere — is a solid internet connection.

Budget-Conscious Security

Major cloud infrastructure providers have a security track record that most real estate companies can’t compete with. They have huge teams of security professionals and the best available security technologies, policies, procedures, and controls to protect the information on their servers and data centers 24/7 with little or no human intervention.

Cloud security measures also support regulatory compliance and establish authentication rules for users and devices. This high level of data security is particularly important in the real estate industry, with customers sharing banking and other personal data during what’s often the largest financial transaction of their lives.

Customers want their real estate transactions to be as secure as possible, and cloud infrastructure providers offer that higher level of protection.

Creating an Open Ecosystem

On the software-as-a-service side, the cloud is the perfect way to host multiple apps and software tools that improve agents and broker productivity. One way to approach this is through the development of a real estate app store that includes a range of software, including CRM tools, lead generation software, open house apps and productivity tools, with everything hosted in the cloud.

In doing so, this creates an open ecosystem, where agents and brokers have a choice of software tools to use, including some apps developed in-house and others from third-party partners. The cloud enables an open ecosystem in which agents and brokers simply decide which apps they want to use from a menu of options available. This provides flexibility while also empowering personal choice and customized solutions for home buying and selling and beyond.

Convenience Is the New Normal

The Covid-19 pandemic has forced real estate companies to conduct more business remotely, with documents shared online. Some firms have been moving a greater number of transaction steps to the virtual realm, using cloud-based services to host and gather documents and collect signatures.

While some customers will continue to demand face-to-face contact with agents and brokers, a significant number will embrace the convenience of a mostly online, cloud-based approach.

The industry is already seeing great benefits from cloud computing. Expect many more advantages to reveal themselves as the industry continues to digitize its operations.

Too often, we see that the failure to innovate today equates to playing catch-up tomorrow. The benefits of cloud technologies for real estate services professionals are clear, and the obstacles of price and infrastructure are entirely surmountable.

Business and information technology leaders in this industry must look beyond outdated legacy systems and begin embracing the cloud — now.

Rizwan Akhtar is executive vice president, chief technology officer of business technology, at Realogy. Akhtar holds an M.S. in Computer Science from the University of South Asia and an MBA from the University of Phoenix.

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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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