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FCC Head Julius Genachowski Blasts AT&T

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ATT JULIUS GENACHOWSKI
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By Sinead Carew and Jasmin Melvin

NEW ORLEANS/WASHINGTON (Reuters) - The top U.S. communications regulator on Tuesday defended his opposition to AT&T Inc's failed bid for T-Mobile USA last year and fired back at claims that the decision caused price increases for the wireless carrier's customers and more inefficient use of wireless spectrum.

Federal Communications Commission Chairman Julius Genachowski blasted AT&T for suggesting that U.S. regulators worsened the spectrum crunch or prompted higher prices, during a keynote speech at the CTIA annual wireless industry conference in New Orleans.

The U.S. Justice Department and FCC both challenged late last year AT&T's attempt to add capacity to its network through a $39 billion plan to buy smaller rival T-Mobile USA from Deutsche Telekom.

The government said the deal would reduce competition and lead to higher wireless prices for consumers and businesses.

AT&T gave up its bid in December, but its chief executive, Randall Stephenson, has repeatedly sharply criticized the FCC after the decision.

"Some have recently argued that the government's review of transactions in the wireless space - or, let's be frank, review of one specific transaction - is somehow causing a shortage of spectrum and leading that company to raise prices for consumers," Genachowski said. "The overall amount of spectrum has not changed."

He also lashed out at the notion that the country's spectrum could be used more efficiently if the market had fewer bigger competitors who could invest more in their networks.

"The notion that competition drives spectrum inefficiency is at odds with our history of mobile," Genachowski said.

Instead Genachowski said that operators should look for ways to manage their networks more efficiently to get more out of the spectrum they own while the FCC works on making more spectrum available.

AT&T countered by referencing Genachowski's statements at last year's CTIA conference, where he said consumers would face higher prices if the market were forced to respond to supply and demand.

"The FCC was within its rights to withhold its approval. But it is incorrect when it denies the impact such decisions have on the price of wireless services," Jim Cicconi, AT&T's chief lobbyist, said in a statement on Tuesday.

NETWORK CAPACITY

Genachowski also said on Tuesday that the telecoms regulator will move ahead with tests for sharing spectrum between the government and commercial wireless operators.

The move is one element in a bigger FCC plan to increase capacity for rapidly expanding consumer demand for mobile data services, Genachowski said.

In 2010, the administration said it would make 500 megahertz of spectrum available in the next 10 years.

The growing use of wireless devices like Apple Inc's iPad tablet and Google Inc's suite of Android-powered smartphones has added to the urgency to find more airwaves.

Spectrum is expected to be a major topic at the show among wireless operators.

Genachowski said the FCC is ready to work with the National Telecommunications and Information Administration (NTIA), which manages government spectrum, on the tests aimed at discovering whether it is feasible for government users to share the same spectrum with commercial wireless operators.

NTIA proposed in March giving wireless companies access to another 95 megahertz of spectrum - almost 20 percent of the target set by the Obama administration - by relocating some federal systems and allowing others to share spectrum with commercial operators.

The agency said sharing would be necessary as the proceeds from an auction of that spectrum band might not exceed the cost of relocating government operations and could take more than a decade.

NTIA said it will begin convening discussions between industry and federal agencies at the end of the month to sort out concerns over their spectrum sharing proposal.

(Editing by Leslie Gevirtz and M.D. Golan)

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