It is hard to avoid becoming cynical when watching the federal government interact with big corporations like AT&T. So when AT&T announced it would merge with T-Mobile, giving AT&T and Verizon a combined 3 out of 4 cellular subscribers, I thought two things:

1) What a terrible idea. Higher prices, fewer jobs, less choices, etc.

2) The Federal Government will likely not prevent it - instead opting for some minor concessions that no one will bother to enforce.

Sometimes, it is very good to be wrong.

Cecilia Kang of the Washington Post, decodes the language from Wall Street to explain the biggest winner from the federal government blocking the merger: consumers.

“Without the combination, we think the wireless industry will be further weakened by continued hypercompetitive activity, particularly regarding subscriber acquisition costs,” said Nomura Securities analyst Mike McCormack.

That means customers can still get lower rates as the industry competes for their dollars. T-Mobile, for example, will continue to be a low-cost competitor, according to consumer advocacy group Consumers Union. A survey showed that data plans from T-Mobile were $15 to $50 less per month than those offered by AT&T.

An excellent reminder that what is best for Wall Street is not what is best for the 99%. Big companies like AT&T find competing for customers a hassle that lowers their profits -- they consider a market with four sellers to be hypercompetitive. In wireline, they have acquiesced to the "competition" of two competitors -- cable and DSL.

This is one reason communities build their own networks -- the private sector is not truly competitive when it comes to ISPs and most communities have no prospect real of improvement absent a public investment.

But we should rejoice in this victory -- because we earned it. Without the hard work of many grassroots groups, it is hard to imagine the Department of Justice or FCC standing up to such a powerful corporation.

Some quotes from some of the many organizations responsible for protecting the 99% of us who don't benefit from higher prices and fewer choices.

Andrea Quijada of the Media Literacy Project:

“The end of AT&T’s campaign to eliminate mobile competition and jobs is a gift to working class New Mexican families this holiday season. However, we know that this decision was not the result of AT&T putting people before profit. This result was won by media justice advocates and our allies in New Mexico and nationwide. Though we are certain this is not the last we’ve heard from AT&T/T-Mobile, we want to take a moment to acknowledge this victory for consumers.

The National Hispanic Media Coalition spoke out against the merger and celebrated its demise:

"AT&T has finally accepted that its bid for T-Mobile has run its course. NHMC is very pleased that the FCC and the DOJ have so justly put the little guys ahead of giant corporations in their review of this merger. Latinos pay more for cell phone service than any other ethnic or racial group, paying the most on AT&T and the least on T-Mobile. In addition, because T-Mobile's workforce is nearly 50% people of color, and an estimated 20,000 T-Mobile employees would have lost their jobs as a result of this merger, Latinos and other people of color would have been disproportionately harmed. For these reasons, NHMC has worked hard over the past seven months to educate people about the harms of merger. We are ecstatic to have defeated it," comments Jessica González, NHMC's Vice President of Legal and Policy Affairs.

The Center for Media Justice issued these comments:

amalia deloney, Media Policy Field Director of Center for Media Justice stated, “Since AT&T first announced its intent to takeover T-Mobile, the Center for Media Justice has continuously raised concerns about what role a duopoly would mean for historically marginalized communities— particularly communities of color and America’s poor who disproportionately rely on access to mobile broadband to find employment, access healthcare, advance their education and organize for social and economic justice.”

This holiday season, millions of folks across the country will not be blind-sided by high phone bills, and T-Mobile employees – many of whom are people of color and all of whom are nonunion- will get to keep their jobs. Today marks an important victory for rural and poor communities, people of color, and the hard workers of America who simply can’t afford to pad the pockets of the corporate CEOs.

And finally, the Media Acess Project:

Today’s announcement proves that law trumps politics. This anti-competitive transaction clearly exceeded permissible standards. AT&T and T-Mobile thought they could push it through by using lobbyists and political pressure, but the FCC and Department of Justice held firm.

Two hours northwest of the nation’s capital lies rural Allegany County, in western Maryland on the border with Pennsylvania.  In the mid-1990s, before cable internet was even widely available, the county launched a successful wireless carrier network that would expand into an envied public model.  In 1996, the State of Maryland offered financial assistance to wire public schools.  They used a wireless solution due to the high costs of fiber-optic cables then. To raise funds and pool grant dollars from the Appalachian Regional Commission (ARC), the school partnered with fellow agencies Allegany County, Allegany County Library System, and the City of Cumberland.  The new Allegany County Network (AllCoNet) placed its first wireless antenna atop the courthouse, the county’s highest point, and launched the network at a cost of $4.3 million.  

The network that evolved into AllCoNet began with far more modest goals than restoring prosperity to the county. In 1996, the State of Maryland offered financial incentives to help wire public school buildings for fast Internet access. But connecting the public schools with fiber-optic cable would have been prohibitively expensive. As an alternative, Jeff Blank, the microcomputing and networking supervisor for Allegany County Public Schools, suggested a wireless network in which signals would be transmitted via microwave relays, traveling from one high point to another. Mounting the first antenna at the top of the Allegany County courthouse, one of Cumberland's high points, seemed only logical, and so began a common-sense venture in interagency cooperation. (ARC Magazine)

The early justification for such a network was rooted in the private sector avoidance of building in rural areas but also the pressing demand for economic growth and good broadband technology being just outside the nation’s major eastern cities.  To eliminate the Digital Divide, AllCoNet looked to provide carrier class, affordable service to public entities like government and schools while upholding an open access model to let private companies serve the public at reasonable costs -- avoiding massive infrastructure debt.  

With the information economy building into the 2000s and private sector interest increasing, the partnership decided to expand the wireless network to residents. Where AllCoNet1 is an intranet connecting public facilities and schools, AllCoNet2 would serve to provide connections to residential and business customers, capable of delivering business level speeds across a large area.   Verizon meanwhile continued to refuse to upgrade its own services. 

To fund some of the expansion costs and oversee the implementation, the partnership selected a “technology transfer partner,” Utah-based Conxx.  The expanded wireless network using Alvarion was completed in 2005 at a cost of around $4.5 million, funded primarily by state and local sources.  The network maintains an open access model for private retailers. (See SkyPacket FAQ)

AllCoNet2 was created to provide that "refused" new telecommunications infrastructure for Allegany County, and it has been very successful. AllCoNet2 satisfies both new (Internet) and legacy (T-1, T-3) telecommunications requirements of businesses and is providing innovative new services such as Open Access Broadband Internet Access, Public Safety Mobile Broadband, as well as being an extremely cost-effective telecommunication backbone for public agencies such as the local library system, school system, and county government. (via Conxx) 

AllCoNet2 is beginning to have a positive economic impact. Private telecommunications carriers, looking at the prospect of losing a potentially valuable market to a public-private hybrid service, are talking about offering competitive rates. Shankle, the AllCoNet chair and county/public school system IT chief, hopes that some of the big names in the telecommunications industry will choose to become ISPs via the AllCoNet2 network. County commissioner Stakem doesn't conceal his pleasure at being invited to dinner by executives who once brushed off pleas for cheaper service. "I think a lot of those big companies didn't think we could do it," he says. "Guess what? Now some of them are saying, 'We think maybe we can do something for you down there.' (ARC Magazine)

Today the network consists of 14 towers providing coverage to 85% of residents and 95% of businesses centered around Cumberland.  Over 40 government entities and non-profit organizations benefit from internet services.  Two retail providers, SkyPacket and TWR, serve about 75,000 residents. The PharmaCare Network connects residents directly to its local pharmacies. AllCoNet is scalable to other remote services, such as public safety and wireless metering.  The partnership hired a consultant to study how much users would pay in the private market for the same level of service and found that users are saving around $840,000 annually with AllCoNet.  The network has proven so effective that nearby Frostburg State University is connected with its 6,000 students.

In the place where “Texas history lives,” the City of Granbury followed a fellow Texas city in delivering a Tropos wifi system that covers all 10 square miles of the city.  Less than a decade ago, Granbury had no functional IT department and after hurdles with a private public partnership, established a functional and successful publicly-owned wireless network.  Initially created to support city functions and mobile police, the network is available to the public, elevating the rural town outside of Fort Worth to the mobile age.

When Granbury hired IT Director Tony Tull in 2003, the technology capabilities of the city were dire: no staff, a budget of $6,000, and only two buildings with access.   Tull quickly brought city and council officials on-board to his ambitious technology plan to deploy wireless WAN to all city buildings in partnership with their existing ISP, Texas-based Frontier Broadband (now acquired by KeyOn).  The initial needs were to equip city personnel with mobile access which focused on police officers, firefighters, and city inspectors.

Other goals included general public and tourist broadband access, reading utility meters, perform live web casts, and connect to nearby governmental networks.   After the City received a Homeland Security grant, $70,000 was earmarked to outfit over 10 police vehicles with wireless laptops.  In 2004 Tull attended the Public Technology Institute’s National Summit for Local Governments in Corpus Christi where he reviewed the city’s 147 square mile wireless network by Tropos.  Convinced the technology was right, Granbury deployed a test run of 40 routers across half the city and eventually 100 more to cover the roughly 10 square miles.

The initial returns on investment came eight months after launch when the police department returned $78,000 in budgeted police salary overtime.  The department later reduced its 2005 budget by $100,000.  The City has also saved time and money with the network reading digital meters, assisting building inspectors and providing cheaper connections to municipal buildings.  The total start-up costs were $325,000 which included acquisition costs, infrastructure, and the Tropos price of $68,000 for each square mile of the network.  City departments continue to streamline with the system and since 2007 public users have been accessing the network for $5.95 daily or $19.95 monthly.  Signal repeaters are available to boost signals in homes.

Though the project began as a public private partnership, Granbury found it’s private partner, Frontier Broadband, not living up to their bargain.  

Unfortunately, Granbury’s private partner did not respond to network performance problems as quickly as the city would have liked. In March 2007, the city bought the 10-square-mile network for $225,000 to maintain more control over its performance. The Granbury wireless network is now live with the city managing it and selling service to the public. “Be careful how you pick your partners,” Tull said. “Things that are a problem for you may not be a problem for the provider.”

Like officials of many cities who invest in infrastructure, Tull sees the network additionally for its important impact on every citizen and the social or indirect benefits that come back to the city and to the citizens.

“Is subscription sales the only way our municipality is going to see a return on our $500,000? Not really. We see other benefits. Police on the street longer because they can do their reports from the cars rather than the squad room. More information to our firefighters before they make scene on a possible structure fire. AMR project. Tourist access to city wide internet. These are all hard dollar and soft dollar returns that are real.”