This is definitely a surprise, but it looks like AT&T finally read all the writing on the wall, and realized it was unlikely to win its fight with the DOJ and FCC and has officially killed its plan to try to purchase T-Mobile... meaning that it now has to pay the $4 billion breakup fee. While the trend of where this was heading was becoming increasingly obvious over the past few months, it's still pretty shocking on the whole. Getting big mergers like this through had become pretty standard, and AT&T (especially) excelled at the political dealing to make such things work. However, the growing public outcry and concerns over the lack of competition that would result seemed to finally have had a real impact.

About a year ago, various wireless service providers found themselves under investigation by the FCC for sky-high overage fees. Of course, they protested this charge in the form of hilarious statements, expressing "concern" that their customers might be "confused" if they were warned about impending overage charges. Some even went so far as to claim that customers obviously wanted overage charges because (get this) customers racked up overage charges.

To wit:

"For accounts that repeatedly go into overage, it is reasonable to infer that it is a matter of consumer choice. These customers are either indifferent to overages or are making the deliberate decision to incur overages because it is the most cost-efficient solution for their usage patterns."

Or maybe, just maybe, customers wanted to be informed of these possible overage charges but no cell phone company was interested in telling them. While tools are available for consumers to track their own usage, this is not something that's promoted very heavily (or indeed, at all) by most phone companies.

Well, the FCC has finally stared down the wireless carriers, who have decided to voluntarily (through gritted teeth) implement many of the rules suggested by the FCC, rather than deal with being regulated by the government.

Customers will receive free text alerts in real-time when they're about to exceed their limits, CNET reports. The move is supposed to cut down on the "bill shock" people may feel when hit with sky-high rates for extra usage. Wireless carriers will also warn customers who travel overseas about the additional fees they may incur.

Of course, this being a government-related decision (and one performed under presumable duress), don't expect to be notified any time soon.

Under the volunteer measures, wireless carriers have 18 months to put their warning systems in place.

Not only that, but your months-away warnings may not be timely enough, especially for those of you with notorious text-fiends (read: teenage children) on your mobile plans.

Some providers, including AT&T and Verizon Wireless, already warn their customers as their data use approaches the limit. However, these warnings may be delayed. AT&T, for example, takes 24 hours.

24 hours?!? That's like 3 years of texting for normal users! The good news is that sometime within the next two years, your mobile carrier may have to speed up its notification system to something approaching "real time."

Until then, you may want to consider switching to an unlimited plan or putting your kids up for adoption, whichever is cheaper.

With the Justice Department believing that it can get all sorts of data from telcos without any oversight or without a warrant, it seems rather important to know what kind of info your mobile operator is keeping -- and for how long. The ACLU, via a Freedom of Information Act request, was able to get a "for law enforcement use only" document that shows how long the carriers hold on to what data (Wired also notes that the document could already be found online if you knew the title). The document itself is a pretty weak scan: Thankfully, however, now that the data is out there, we can show it friendlier formats. Michael Robertson was kind enough to take the data (minus the "for law enforcement use only" part, and put it into a Google docs spreadsheet: Additionally, the folks at Wired put together a nice infographic from the data: What it seems to show is that Verizon holds onto your texting data for the least amount of time, but also retains the actual text of your text messages -- something no one else, outside of Virgin Mobile, does. How long until we see a push for a mobile data retention law to "standardize" what these companies have to hang onto and for how long?

Wow! Well, this is a bit of a surprise. The US government, who had been rubber stamping various mergers for a while now, especially in the telco/broadband space, may finally have had enough. The Justice Department has officially moved to block the merger, technically filing a lawsuit against it on antitrust grounds. From the beginning, most people had assumed that no one would block the merger, though in the last few weeks there were definite rumblings suggesting that the tides were shifting. Even so, having the DOJ jump in with a lawsuit is a surprise. AT&T insists that the move was a surprise to it as well, which is also a bit odd. Typically, the DOJ tends to telegraph this kind of move, in order to either pre-emptively end the merger attempt or to get much greater concessions. It's not entirely clear what pushed the DOJ off the fence on this one, but AT&T accidentally revealing that it had lied about the key reasons for the merger couldn't have helped...

A few weeks ago, AT&T accidentally revealed that it had a plan to cover 97% of the population with its 4G/LTE service. That's a big deal, because a big part of the rationale for the T-Mobile merger was that it simply could not deliver that kind of coverage without the merger. AT&T has worked furiously since then to basically deny what the filing clearly stated. They've been doing so by trying to change around what basic words mean (which is kind of funny). However, it looks like they haven't convinced one rather important player. The FCC is now asking for evidence that AT&T actually needs T-Mobile as it keeps claiming. It's still pretty likely that this all gets approved, but it definitely has presented pretty clearly how the rationales being given for why this deal is "necessary" are hogwash. No one denies that it will be much easier for AT&T, but that's not the same thing as necessary.

One of the key talking points from AT&T in support of the T-Mobile merger is that it "needs" T-Mobile's spectrum in order to expand its planned 4G/LTE networks to cover 97% of the population. And, there's no doubt that having T-Mobile's spectrum will make it easier, but that's not the same as it being necessary. As Broadband Reports has been pointing out for a while, Verizon has less spectrum than AT&T but can cover the same 97% of the population with it. Apparently a lawyer for AT&T accidentally posted a document to the FCC's site that more or less admits that AT&T doesn't need T-Mobile's spectrum, and that it could invest $3.8 billion to catch up to Verizon in terms of LTE coverage. $3.8 billion is a fair bit of money, but it's a hell of a lot less than the $38 billion that it's spending for T-Mobile. Yes, AT&T also gets T-Mobile subscribers with that, but it certainly raises questions about AT&T's claims that it would be too "costly" to invest to get to 97% coverage with its existing spectrum. As BBR notes, the timing of the letter also suggests that AT&T knew it was planning to buy T-Mobile when it decided to claim that it would "not" build out its network, perhaps recognizing that this would help give it a talking point for why the merger should be allowed.

In the typical push to get big mergers approved, we often see particularly dumb arguments. Sometimes these involve astroturfing attempts or lobbyists signing arguments for others (or sometimes forging the letters entirely). And then, sometimes, the companies just get people to push crazy arguments on the off chance that someone might believe them. Take, for example, this absolutely bizarre claim from the executive director of the Texas Rural Education Association, Don Rogers, that allowing AT&T to buy T-Mobile would be good for Texas schools:

The proposed merger between AT&T and T-Mobile will be a giant stride toward providing ALL Texas children quality educational opportunities and experiences. Every Texas student, whether they attend school in inner-city Houston or in rural West Texas, should have access to modern technological advancements, including high-speed wireless Internet.

The resources made available by the merger would make high-speed wireless available to many Texans, both rural and urban. This is vitally important for schools in rural Texas that will finally have the ability to access a high-speed wireless broadband network and all it brings.

He doesn't explain much further. He does explain the importance of wireless broadband, which is great, and we agree that there should be more of it, especially for schools. But what does allowing AT&T and T-Mobile to merge have to do with that at all? The real answer is nothing whatsoever. Nothing in the merger will make it any more or less likely that Texas schools will get mobile broadband. But, Rogers is sure of it:

I know of what I speak when I say that Texas--in particular our rural schools--will benefit substantially from this merger. To deny the educational opportunities this merger would provide to students living in rural areas would do our children a disservice. This merger will ensure that every young Texan will be learning and performing to the best of their abilities.

I know of what I speak when I say the above is pure hogwash. Whether or not you think the merger makes sense, it has nothing whatsoever to do with broadband in schools. And it certainly would not "ensure" that "every young Texan will be learning and performing to the best of their abilities." It's incredibly disingenuous for someone supposedly heavily involved in children's education to suggest that some totally unrelated corporate merger will somehow "ensure" that kids are learning to the best of their abilities.

While there's been plenty of concern in the past couple weeks about Apple's iPhone/iPad location data, followed by Google's Android location data, plenty of people pointed out from the beginning that what both companies have done completely pales in comparison to the sort of data that mobile phone operators regularly collect on you. Even as lawsuits have been filed against both Apple and Google, few of the people who are really upset about those two companies seem to recognize that what the operators have is much, much more complete. The mobile operators, apparently fearing that people may start to realize this, have become a bit proactive and are trying to convince everyone that the real problems are elsewhere -- specifically with apps on phones, not with the service providers. You see, don't worry about all the data we collect. Just look at what those apps are doing:

AT&T noted it “plays no role” in what kind of information smartphone apps collect, while T-Mobile pointed out the ways in which that data can be used.

Sprint lamented “consumers no longer can look to their trusted carrier with whom they have a trusted relationship to answer all of their questions,” particularly on privacy.

And Verizon Wireless called out smartphone app makers directly on the issue, stressing “location-based applications and services (whether provided by us or third parties such as Google) should give customers clear and transparent notice” and control.

This was in response to questions from Congressional Reps. Ed Markey and Joe Barton, leading all of the operators to also admit that they collect such data as well, but really, apps. Apps are a bigger issue. Just focus on the apps. Really. Apps.

Back when I was in college, one of my favorite classes was a class on arbitration. It was really fascinating to dive deep into how arbitration works, and it's a process I've remained fascinated with for years. Conceptually, it sounds like such a good idea. Have an arbitrator help work out a dispute, rather than going through a fully adversarial court process. And, when it's done right, it can be very effective. And, yet, many people are realizing that the system today is broken. According to various reports (pdf), businesses prevail 96.8% of the time in business-initiated contract arbitration cases handled by the National Arbitration Forum (and business-initiated cases are the vast, vast, vast majority of the cases). If that number seems unnaturally high, you've spotted the problem. The main issues is that, usually, the business gets to choose the arbitrator (or at least gets approval). Unlike the court system, the arbitrator is being paid for by the parties, and if that arbitrator wants to get more business, he or she is going to view the party likely to hire him or her in the future more favorably. This isn't to say there's outright corruption. I'm sure many arbitrators believe they're being fair. But the results are pretty damning.

At the same time, an equally broken process is the class action system. We've seen over and over again that class action lawsuits are used more as a way to enrich lawyers, rather than to help any particular class. The lawyers get the bulk of any settlement, and anyone in the class gets a couple dollars over an issue they didn't really care about in the first place. Or, in some cases, it's even more ridiculous where the "settlement" actually pushes people in the class to buy products from the company being sued.

So, I have to admit that I was somewhat conflicted about the Supreme Court case concerning the legality of arbitration clauses in California and their ability to block consumer class action lawsuits. In the end, the Supreme Court has ruled that the lower court rulings (in both the district and appeals courts), which upheld the right to a class action lawsuit against AT&T, were wrong. The lower courts found that the arbitration clause was an "unconscionable contract," but the Supreme Court felt otherwise, with a ruling that seemed to buy into all of the myths of arbitration, rather than what the data actually says.

The background story on the case is that a couple, Vincent and Liza Concepcion, sued AT&T in a class action lawsuit, saying that there were advertisements for free mobile phones, but sales tax was still applied on the full retail price meaning the phones weren't really free. Frankly, this seems like a somewhat silly class action claim to make and it fits with my feelings towards class action lawsuits. But, that shouldn't get in the way of the larger question, of whether or not such class actions (legitimate or not) can be blocked entirely by an arbitration clause. AT&T, of course, claimed that the arbitration clause in its contract blocked the class action lawsuit and meant it had to go through arbitration (and not as a class, but on an individual basis). And from there, we got the lower courts' decisions rejecting the clause and the Supreme Court now accepting it.

As much as I'm troubled by bogus class action lawsuits, this ruling bothers me much more. I do think that both the class action process and the arbitration process are regularly abused, but that the class action process is both more likely to be fixed and less likely to result in completely unfair results. If this involved a situation where two parties had a full and fair negotiation and then agreed to an arbitration clause, I wouldn't have much of a problem with it. But when it's a "click through" sort of agreement, where the consumer has no way to bargain or negotiate the contract -- and, in fact, isn't really expected to have read the contract -- I have serious problems with the idea that people can be forced to give up their basic rights to go to court over something that is designed for them not to read.

On top of that, this certainly opens the door to companies putting arbitration clauses everywhere to keep them out of court on all sorts of potential misdeeds. The unintended consequences of this sort of thing are certainly troubling. The proper response, at this point, would be for Congress to fix the law and to make it clear that you can't give up the right to go to court through such a non-negotiated contract... but the chances of that actually happening seem slim at best.

A few years back, we discussed an article by Declan McCullagh, which laid out some of the sneakier tactics of lobbyist groups to pressure the government to support some position using letterhead from various special interest groups:

"You go down the Latino people, the deaf people, the farmers, and choose them.... You say, 'I can't use this one--I already used them last time...' We had their letterhead. We'd just write the letter. We'd fax it to them and tell them, 'You're in favor of this.'"

It looks like AT&T's lobbyists went through the list and they're back around to the top with the "Latino people." Suddenly, and for no clear reason, The Hispanic Institute and the Latino Coaltion have decided that supporting the merger of AT&T with T-Mobile is of utmost importance to them. They've put out statements with such nonsensical claims like:

The proposed merger of AT&T and T-Mobile holds great promise for all Americans, and especially those of Hispanic heritage.

What's in it for these groups? Money, mainly:

One DC insider informs us that rumblings on K Street suggest AT&T had called every civil rights group in the United States for support within fifteen minutes of the deal being announced. Fearful of losing AT&T donations -- most of these groups quickly got to parroting prepared AT&T statements, unconcerned about the actual impact of a T-Mobile deal. Getting funding for a new events center apparently dulls any ethical pangs felt using your organization as a hired stage prop.

It's really difficult not to be cynical when you see this kind of thing playing out. What's really depressing is that no matter how many times this rather obvious practice is exposed, it just keeps on happening.