A Quick Crash Course: AT&T, T-Mobile, and Google – There WILL be a Test.

Danielle Roy

Some of you my have noticed that AT&T has been in the news quite a bit lately.  The AT&T/T-Mobile merger debates have been getting quite heated, and many laypeople are coming out of the woodwork, claiming economic and technological impact will be awesome or adverse, depending on their camp.  Now, I’m no business expert in any conceivable interpretation of the word, but I did focus on communications systems in college, especially wireless and personal communication systems.  So, I figured I would take a few minutes to talk about what to expect if the deal goes through and a few side-issues from a legal and IP perspective that could affect what is going on.

Full disclosure: my family does get wireless through AT&T.  I’m neither a huge fan nor a critic, and, while at least flowers would be nice (just kidding), no, I don’t have any particularly special interest (except from pure nerdy curiosity) in any mobile provider.

First, a crash course in wireless network planning and service: NO wireless company wants to be the “absolute best” provider, and no wireless service is as good as the company can possibly make it.  Surprised?  Well, it makes sense when you hear the actual goal: to be “just a little bit better than your competitors.”  Economically, it makes sense.  A completely optimized wireless network isn’t completely optimized.  A 0% drop rate for calls would cause a PHENOMENAL price increase from the standard 2% drop rate that all wireless companies shoot for.  Plus, consumers have been trained to accept the 2% as normal, rare, and random (almost 100% of dropped calls happen during rush hour, it’s effectively planned service loss).  Winning business model.  Knowing this little tidbit, that, from a service perspective, wireless companies ARE created equal, is essential to understanding anything else about wireless networks.  It also sets straight some facts: acquiring another company is generally not a move to improve quality of service, but rather to improve coverage.

Second, the difference between “service” and “coverage”: This one is pretty easy.  “Coverage” is the concept of a wireless provider’s service being available in a given area.  Service is being able to actually make a call.  Just because a wireless network has coverage in an area does not mean that the quality of service is going to be particularly good, or that you will even have service.  Most phones are now equipped to tell you your coverage and service quality, but not many people know how to read it.  If you see E/Edge, G, 3G, or 4G next to the bars on your phone somewhere, that denotes the kind of service you are getting.  The bars define how GOOD that particular service is.  Some of you may remember the AT&T/Cingular merger, which was a definitive coverage move.  This new deal with T-Mobile is actually a service AND coverage move.

This is NOTHING like dating.

All this “bandwidth” talk: Anything wireless communicates with waves, including humans.  The best analogy for understanding bandwidth is your radio.  Radios tune in to specific frequencies… roughly 88-110MHz for FM (pronounce MHz as mega hurts).  So, whatever station you tune in to is the frequency that your station of choice has been allotted.  Wireless companies work the same way… only they are allotted a lot more frequency.  “Bandwidth” refers to the block of frequencies that a particular company has acquired a license for.  More bandwidth equals better and faster service.  Because AT&T is seeking to acquire T-mobile’s bandwidth allocation as well, you can see how this is a service and coverage move: AT&T already has one of the largest bandwidth allocations in the US, adding T-mobile’s allocation would make it easily THE largest bandwidth allocation.

As for duopolies/monopolies/what-have-you that is causing a bit of hoopla at the FCC, I sincerely doubt a monopoly.  Again, I’m not a business person, but AT&T and Verizon would have to merge for that to happen, and I’m pretty sure it would be almost impossible for those two companies to be approved for such a deal in the near future.  For duopolies?  AT&T and Verizon would STILL be the biggest 2 providers, but a lot of small, no-contract companies are succeeding, too.  Aside from a temporary price drop for the two bigwigs trying to get more customers (emphasis on temporary), I can’t really predict anything that will happen pricewise.

As far as technology is concerned, however, expect the speed of network evolution to increase.  Networks have already been racing to get better and converge to a single superior technology, but the merger would likely kick everyone into high gear.  Very few things could possibly slow this down.  Except maybe this.

It’s been a few years, but AT&T and Nortel have worked together before.  AT&T worked with Nortel to bring its 3G service to customers using the W-CDMA technology mentioned in the article.  I HIGHLY suspect that some patents related to that technology are in the Nortel portfolio currently on auction.  I suppose my suspicion is strengthened by the fact that Google, the current bidding opener for the Nortel patents, has been oddly silent about the impending merger.  Both AT&T and T-Mobile use the same W-CDMA technology (which made the merger possible in the first place), and, should Google (or anyone else) leverage those patents, AT&T could be out some serious money that could go to network evolution.

Bottom line: the future is completely up in the air, but I REALLY want some shiny new technology.