Truthdig Radio: The Great Recession, Jobs and the Royal Spectacle

Posted on Apr 28, 2011

Photo illustration from an image by Colin Grey

(Page 4)

Josh Scheer: And did she bring that up in the book, about the creative versus the …. I mean, or that, that’s also from you being the culture critic that you are?

Sheerly Avni: No, that’s me.

Josh Scheer: OK.

Sheerly Avni: She mentions several times that as a show runner, she’s responsible for the lives of 200 people.

Josh Scheer: Yeah. So just making it work.

Sheerly Avni: Mm-hmm.

Josh Scheer: Whatever it takes.

Sheerly Avni: Yeah. But when you look at—the first two seasons of “30 Rock.” … I’m sure there’s some wonderful, overpriced women’s college in New England running a course on it right now called “Ungendering Power: The First Two Seasons of ‘30 Rock.’ ”  The first two seasons of it were a show in which Fey’s character—Liz Lemon was discovering what it’s like to be in power, and discovering how much power: a) gets you laid; b) makes it hard to get laid; c) makes you friends; d) makes it hard to keep your friends. And she was learning all sorts of things about what it means to be a person in power. That made the show interesting because every show is better when its characters are discovering something. Afterwards, it becomes what it’s been for the past couple seasons: lots of really funny jokes.

Josh Scheer: Which is not bad for a show. [Laughs]

  Sheerly Avni: No, again: I only criticize you because I love you, honey. [Laughter]

Peter Scheer: Well, we’ll have to leave it there. Sheerly, thanks for talking with us.

Sheerly Avni: Sure thing. Thanks for having me.

Peter Scheer: Sheerly Avni is a culture critic whose work has appeared in Mother Jones, Salon.com and, of course, Truthdig.

* * *

Peter Scheer: This is Truthdig Radio. I’m Peter Scheer in studio with Robert Scheer, and we are speaking with Chris Ziegler, the former mobile editor of Engadget, who can be read on ThisIsMyNext.com while we wait for his next venture to launch. Thanks for joining us.

Chris Ziegler: Thanks for having me.

Peter Scheer: So, Chris, the reason we have you on is because—some people may not even realize, but AT&T is buying, or trying to buy T-Mobile, which would make it the No. 1 carrier in the country, would leapfrog it ahead of Verizon and make it this—this juggernaut. And you argued recently on ThiIsMyNext.com that that’s bad for consumers. Can you explain that?

Chris Ziegler: Yeah. Well, basically this would create just a massive, overwhelming duopoly in the market. You look right now, you have pretty, a pretty even distribution of subscribers among Verizon, AT&T, Sprint and T-Mobile, and when you combine T-Mobile and AT&T, that effectively takes Sprint out of the running. They become a second-tier carrier, instead of creating this pretty well distributed four-way tie. Granted, AT&T and Verizon have quite a few more subscribers than either T-Mobile or Sprint, but they’re still able to compete. And this is going to create a very different landscape.

Peter Scheer: How would the numbers shift after this merger?

Chris Ziegler: Well, I—off the top of my head, I think that AT&T and T-Mobile combined would have something over 130 million subscribers, which compares to about 95 million to Verizon. Which sounds like a big difference, until you realize that Sprint is down below 50 million. So that’s a huge, huge jump. And then below that, you have a bunch of regional players like US Cellular; you have Cricket; you have Metro PCS. And those guys just have a few million each, so it really isn’t in the same ballgame. But Sprint, obviously, as a national carrier, it’s going to have a very difficult time competing with two carriers that are basically twice the size or larger, each.

Robert Scheer: Can I just jump in here—this is Robert Scheer—what does this do for freedom, for control of content, for the power …? I mean, as long as these people were just delivering water or electricity or the old AT&T, the trunk lines, and they were heavily regulated, you didn’t worry. But these guys can now control the ballgame, can’t they?

Chris Ziegler: Absolutely. And I think that—you know, technically, the FCC—part of their job, a big part of their job, is regulating these players. But there’s been a lot of unanswered questions, regulatory questions over the past several years, and I point some of those out in my piece. The fact that we’ve gone several years without answers on policies on SIM locking, which is the fact that you can’t put any SIM you want and use the device on any carrier; those questions are unanswered. There’s questions about device exclusivity, which is where carriers can effectively lock out other, smaller regional carriers from carrying the same devices within a certain amount of time. And you have this—which I think, you know, this merger is really going to be a witness test for the FCC’s ability to show its regulatory hand. And I’m just hoping that they do that here.

Robert Scheer: Why would you expect them to do that when these lobbyists are so powerful? I mean, I’ve covered the FCC when I was working for the L.A. Times, and it was a joke. I mean, you had a few well-intentioned people trying to raise concerns, but in the main, the lobbyists get to write the rules, don’t they?

Chris Ziegler: Yeah, I totally agree, and that was sort of the conclusion I drew in my piece, which is that I think that despite all the obvious reasons why this merger should be … under heavy scrutiny, and have a really big spotlight cast on it, and—ultimately I think that the logical conclusion is that you don’t want these two guys to merge. I think that the immense amount of lobbying power that AT&T has—and Deutsche Telekom, through T-Mobile USA—I think that they’re going to be able to jam this through. I’m not particularly happy about it, and I’m really concerned about the competitive landscape once this goes through. But to be very honest with you, I would be shocked if it didn’t go through. The only hope that I have is that the FCC is going to undoubtedly require some level of divestiture on AT&T’s part post-merger, just as they did with Verizon after they acquired Alltel. And I’m guessing that Sprint will be looking to pick up a lot of those divestitures so they can sort of bone up, but we’ll see how that plays out.

Peter Scheer: Well, beyond just the choices presented to consumers, they’ve also had diverging philosophies, to at least some degree, right? I mean, isn’t T-Mobile—isn’t their approach to what their subscribers are allowed to do with their devices, for instance, or how they treat … I mean, I think of the Bush wiretapping scandal, where some of the telecoms just immediately handed over their users’ data to the NSA. Are there differing political philosophies of the corporate heads of these companies that maybe now we lose because we lose T-Mobile?

Chris Ziegler: There are, and I think that if you look at—I published a chart that shows the monthly price for the same level of service on all four of the major carriers, and T-Mobile and Sprint are significantly cheaper. And I think that that’s because they have to be. They’re struggling to compete already, as it is, more than Verizon and AT&T are. So that they’re—they end up being more aggressive on pricing; they are more lax, more lenient on their policies; they have lower early termination fees. They’re just generally more consumer-friendly carriers. And I think that’s—like I just said, I think that’s a function of the fact that they have to be. That’s the position they play in the market. And you’re absolutely right, when T-Mobile comes under AT&T’s stewardship, that impetus to be consumer-friendly goes away. And I don’t see any reason why AT&T would continue the lion’s share of T-Mobile’s consumer-friendly policies. As they say in their filing, in their public-interest filing with the FCC, regarding this merger, they say that they’re going to [Laughs] learn from T-Mobile’s superior customer service policies, but obviously I’m very skeptical that that’s going to happen.

Robert Scheer: Well, you know, my view is that we should just keep them broke apart. You know, I mean, God …

Peter Scheer: Yeah, but that won’t happen, he said.

Robert Scheer:… Well, but we should be pressuring it. And that was my next question: Are there any groups out there that we can rally around, or look to for clarity or support, that represent the public interest? Is there any kind of Nader group, or anything else that listeners should be checking out, any websites they should be going to, other than Truthdig, to get some information about this? Who speaks for us?

Chris Ziegler: Yes, absolutely. Absolutely. The Rural Cellular Association is the industry association that mostly comprises the nation’s rural carriers. And a lot of people don’t realize it, but there are literally dozens of smaller network operators around the country that have anywhere from a few million to a few thousand customers. And they all belong to this RCA. They are trying their darndest to get this thing stopped. AT&T is also looking to acquire a large block of some of their neighborhood spectrum from Qualcomm that it used to use for a mobile television service. So that just adds more to AT&T’s spectrum holdings than they would already have by way of this merger, so the RCA is trying to get that stopped as well. Sprint is also, obviously, very much opposed to this. They have actually joined the RCA as an affiliate member—even though they’re a very, very large carrier, and aren’t rural by any stretch of the imagination—they’ve joined to sort of, like, gang up and try and fight this thing together. And Sprint is actually—I mean, they’re being, I think, very—very, very open, very candid about the fact that they don’t see a clear way for them to compete should this merger go through. Their CEO, Dan Hesse, is a very outspoken guy, and I think that folks should pay attention to what he has to say over the next few months, and pay attention to the RCA, because they’re going to be fighting this very hard in Washington.

Peter Scheer: Just to be fair, there is an alternative view here, which your colleague Nilay Patel argues, which is that this is good for consumers, right?

Chris Ziegler: That’s right. And his viewpoint is that by harmonizing the spectrum that AT&T is using for its … deployments with Verizon’s, and creating this duopoly, he thinks that these two guys can keep each other in check, in combination with sufficient FCC regulations. And I do agree with the principle of his viewpoint, which is that given sufficient FCC regulation this could actually work out very well for consumers. My fundamental viewpoint, however, is that you can’t trust the FCC to apply appropriate regulation to these guys, particularly in light of the lobbying they do. And even if they did appropriately regulate them, that varies from administration to administration to administration. And you can’t rely on it to be consistent. So I just don’t think that that’s possible.

Peter Scheer: So—so, given that we’re sort of disheartened by how much we can actually do to overcome these very big conglomerates and their lobbying power, what—can you project this out for us? What do you think the cellular world looks like in this country five, 10 years from now?

Chris Ziegler: I think—I think what’s going to end up happening is this is going to go through. I think that Sprint does still have a fighting chance to create sort of a three-way wireless picture here in the U.S., but what they’re going to need to do is aggressively acquire smaller companies like those I mentioned before—U.S. Cellular, Leap, Metro PCS; Leap, which owns Cricket—and pick up some of these divestitures that AT&T will undoubtedly be required to spin off. And that won’t get them to the same level of subscriber base, but it will get them within spitting distance, and I think that that is the best hope we have, is to get sort of a three-way balancing act going on. And there’s also a very closely related concern that doesn’t have to do directly with this merger, which is the fact that this country is running out of spectrum. You know, consumers are getting very, very data-hungry, as everybody starts to buy smartphones and realize everything what they can do. And control of that spectrum is kind of almost the No. 1 economic issue facing this country right now, and it’s only going to grow. And that’s …

 

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