I listened to a 52 minute interview of AT&T CEO Randall Stephenson while at the gym yesterday. He predicted that they would be offering data only plans for multiple devices within 24 months and "reverse billing," in which data from a content provider who pays AT&T a fee will not count against the user's data cap within 12 months. He also talked about spectrum ownership. He forsees industry consolidation believes the "most efficient" use of spectrum occurs when it is owned by the operator.
Here are a few notes I jotted down while listening. (Some with snarky comments in parenthesis).
- He said that any student of basic economics would have understood that scarce bandwidth would have been used more efficiently if AT&T and T-Mobile had been allowed to merge. (I don't know where he took his basic economics class, but he must have been absent the day they talked about the efficiency of competitive markets).
- Within 12 months, we will see "reverse billing," in which the content provider would pay a fee to AT&T so their data would not count against the user's cap -- like toll free 800 numbers. (As long as the market is an oligopoly or less, he and his competitors will be able to raise the rates and tighten the caps on those data-only plans, favoring large, established content providers that can afford reverse billing).
- AT&T has done a "good job" of getting people used to usage-based pricing, i. e., getting rid of unlimited data plans and moving to caps, tiered service and throttling. (Now they can raise rates -- the reverse billing folks will love that).
- Full ownership and control of spectrum has "proven over time to be the best model" for efficiency and call connection quality. (What else has been tried "over time?" All I can think of off hand is WiFi and that has worked out pretty well).
- Full ownership of spectrum drives innovation and investment.
- There will be data-only accounts within 24 months. (He can Google "MVNO" if he wants to see data-only accounts today).
- LTE will improve spectrum efficiencey by 30-40%. (I've heard higher estimates, but he has a vested interest in convincing us that spectrum is scarce).
- With LTE and HTML5, content and applications will move to the cloud and phone features and operating systems will be less important.
- AT&T will make up for falling voice revenue with new data applications in connected homes, cars and enterprises as well as financial transactions. (And higher prices for data)?
- The charge for text messages is now nominal because most people have unlimited accounts. (Unlimited messaging is $20 per month, which will buy you a gigabyte at Ting.com -- a lot of messages).
- "Breakage" -- the unused capacity due to people not reaching their tier limits each month -- is "evaporating pretty quickly." (It's already totally evaporated at Ting.com).
- Regulators are like "sand in the gears." They are stopping things like the T-Mobile merger, being able to sell off the land line business in small chuncks and the forced sale of unused spectrum ("use it or lose it") to companies like AT&T. (Beneficial for who)?
- Federal spectrum sharing is OK, but non-governmental spectrum sharing is a bad idea.
- The economy and employment outlook for 2012 is poor. (I guess we could fix that and curb those gritty regulators by voting for Romney).
Can anything stop this juggernaut and create competition? Regulation? MVNOs? Success of the spectrum sharing trials recently urged by PCAST? All three?