updated 10:05 am EDT, Tue March 22, 2011
CTIA spring 2011 keynote with FCC, carriers
We're attending the opening keynote for CTIA, where FCC Chairman Julius Genachowski is expected speak along with the heads of AT&T, Sprint, and Verizon. The carrier round table promises to be unique with AT&T's buyout of T-Mobile adding a new tone. Check below for periodic updates from the event.
10:32AM: Verizon's Mead: no incentive to buy a company like Netflix. We don't need to own content. AT&T, would you buy Twitter? No. Is Microsoft a friend to Sprint? Yes. Good move to have a fourth choice (beyond Apple, Google, RIM). Verizon says Google is a friend. Created the Droid franchise around Android. Very cooperative partnership.
10:29AM: Will carriers "level the playing field" and start dictating what device makers have to do? Mead: it's about improving the network. No one element. Cramer: would Sprint be able to afford the iPhone? Hesse: "we can afford a lot of things," but says this isn't a sign of whether or not Sprint will get one [read: probably talking about it]. Subsidy is just one part of the equation. 69% of Sprint's fourth quarter sales were smartphones. Some cost advantages to scale (2 million a better deal than 1 million). 22nd 4G device at the show [Evo 4G].
Cramer: has AT&T lost any customers to Verizon for the iPhone? Not really into the first quarter, so can't comment on the facts. When the two companies [AT&T and T-Mobile] are brought together, they'll get access to the best device portfolio. AT&T asked to defend the T-Mobile merger: repeats the spectrum, the LTE spread to 95% of the population.
Hesse: we already have 4G! Agrees with the NYT on there being no reason to cheer for customers at AT&T/T-Mobile.
Worried about a return to the 1984 breakup market? Mead: Paper is making an overstatement. Will still remain competitive.
Are Facebook, Netflix friends or enemies? AT&T asked on Facebook: "friend," but if it partnered with LightSquared, a "frenemy." Sprint on Netflix: "friend," because anything that drives adoption helps.
10:20AM: Sprint's Hesse does believe this consolidation would stifle innovation. Would put 79% of postpaid (subs) in one company. Cramer asks Verizon's Mead if he has a "dog in this hunt." In Verizon's 11-year history, it's created a great breadth of spectrum. Not going to get distracted by it.
Who's at fault when my video freezes? Are they not spending enough on towers, Cisco, or Juniper? Something endemic? All about spectrum? De la Vega: it's a combination. Traffic management for events like this, where everyone brings their devices.
Hesse on 4G shift and possible TV hit: it's a generational shift. Tablets help. Pitches the Kyocera Echo as a device that you can pocket like a phone but expand into a tablet for media. Will very much change the way young viewers watch content. Cable companies will have to move into wireless.
Will they do what they do in Canada, where there's one bill for everything? Some of "these guys" (AT&T and Verizon too) are already moving that way. Refers to Comcast's wireless branding [of Sprint].
10:13AM: Cramer throws a softball pitch to Verizon to let it justify caps: says "why do I have to subsidize the data hogs?" Mead says it's still under consideration, so he won't accept it here. Sprint says Internet at home isn't metered; it's different, but we are looking at trends. Sprint says it keeps unlimited because it creates simplicity and value; maintaining unlimited position. Agrees with Mead it does need money.
De la Vega on T-Mobile buy: data use on AT&T has grown 8000% in four years. Could grow 8-10X in the next five years. The deal alleviates the "spectrum exhaust" [note: term copied from AT&T's press conference]. Hesse: "my opinion doesn't matter." The FCC and the DOJ do! Stunned when they expect more from him. "That's my answer!"
10:08AM: Steve Largent, CTIA head is up. Appreciates Genachowski's work to free up spectrum. Brings up how NTT DoCoMo was to have exhibited at CTIA, but the company has greater prioties. Calls out for donations through text message (REDCROSS to 90999).
Jim Cramer from CNBC's Mad Money up as the carrier round table host. Introduces AT&T's Ralph de la Vega, Sprint's Dan Hesse, and Verizon's Dan Mead. Did you ever imagine that cellular would be a government overthrower? Did it bring down Egypt?
Hesse agrees. People don't need to get together physically to overthrow it. Google executive never met many of those he helped. De la Vega: brings power to the people and to change countries.
Is it a myth that the US is behind? Mead says no [of course]. We're leading. LTE is the most robust network in the world. Hesse notes he was on the board of Nokia and gives credit to Apple for popularizing phones and apps. 75% of OS growth is North America. Half the revenue from the US. "The iPhone phenomenon really started it," he says. Google got into the act very quickly, within three years.
9:59AM: The investment in spectrum is estimated to be worth 10X its up-front cost. $300 billion by extension. Simply can't afford to delay on voluntary incentive auctions. Wraps up talking about unleashing the potential of mobile broadband.
9:56AM: Recapping executive order to free up 500MHz of spectrum. Also the voluntary incentive auctions to give up spectrum from TV, etc. for mobile data. Brings free market ideas to areas where it hasn't been before Says it has bipartisan support.
If apps run unreliably or slowly without enough spectrum, it'll curb wireless. Economy would be hurt broadly. Estimated value of the auctions could be worth $30 billion.
9:52AM: Talks the importance of an open Internet and the net neutrality. Now on voice roaming: people want the ability to roam anywhere. Want access to jobs, health information. Carriers need roaming arrangements to be competitive. Details still changing. But it's clear they want lower prices and better service.
Moving to next-gen 911 systems. People are frustrated that they can't send text messages to 911 or take a photo of a crime scene. Speeding up and lowering the costs of networks, too. Cutting the red tape. Removing it could lead to $11 billion in deployment.
9:42AM: Citing Mary Meeker study: if you treat the US as a company, infrastructure is vital to it. Genachowski recaps the National Broadband Plan. Focusing on the 100 million homes plan, more access, and switching funds away from landline phone service to broadband.
Wireless broadband is of course important; no sector holds more promise.
When he was here last year, the tablet market didn't exist; now worth billions. Talks about Qualcomm seeing an "Internet of things" where everything is online. Mobile health monitoring is an example. Ripe areas for US leadership. Went from 300 million apps in 2009 to 5 billion in 2010. First app store hadn't even opened until 2008 [not entirely true].
9:39AM: FCC's Genachowski up: CES might as well have been a mobile convention. Broadband is no longer a luxury. As demand increases, unleashing spectrum is a national priority.
Talking about the iPad: naysayers said it would just be a larger iPhone with no impact. Why would people need it? Demand is so high for the iPad 2 that there's a "6 week" [4-5 weeks] backorder.
Broadband adoption is 67% in the US. Singapore: 90%. Need to innovate in private and government. We need to act now. Competitors aren't standing still.
9:32AM: Sprint's Dan Hesse up. Making the hard sell for spectrum [note: carriers have been accused of hoarding it]. Applauds the FCC for making it a top priority, though.
Recapped the rise of smartphones and tablets. Noting that the US leads in deploying 4G where Japan and Europe led in 3G. Coming full circle from when the US started off cellphones. Touts Android and its 29 percent share in the US [Nielsen] and Sprint ID for app discovery.