"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘AT&T’

UPSTREAM, They Know Much More About You Than You Think

In Uncategorized on August 1, 2013 at 8:18 pm
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The headquarters of the National Security Agency, Fort Meade, Maryland

Oldspeak: “Within days of Snowden’s documents appearing in The Guardian and The Washington Post, revealing several of the National Security Agency’s extensive domestic surveillance programs, bookstores reported a sudden spike in the sales of George Orwell’s classic dystopian novel 1984. On Amazon.com, the book made the “Movers & Shakers” list and skyrocketed 6,021 percent in a single day. Written sixty-five years ago, it described a fictitious totalitarian society where a shadowy leader known as “Big Brother” controls his population through invasive surveillance. “The telescreens,” Orwell wrote, “have hidden microphones and cameras. These devices, alongside informers, permit the Thought Police to spy upon everyone….” -James Bamford

“The most awesome and near omniscient surveillance network ever created by man has been revealed in much of its grotesquely invasive corptalitarian horror. And what was American’s response? CONSUME.  Sales of the script to the horror show we are currently living Orwell’s “1984″ exploded 6,000 PERCENT. No critical thoughts given to the personal telescreens/tracking device/listening device/thought recorder/microwave radiation emitter a.k.a. smart phones. Sheeple literally responded to news that all their actions on the internet are being watched, stored and analyzed, by buying a dystopian novel on the internet. All those people should consider themselves a “selector”. :-)  More and more I’m seeing all these hip sexy cool invitations to “share everything” via your telescreen. Incessant exhortations to use your telescreen to buy everything, check things, secure things, pay things, scan things, tweet things, like things, post things, photograph things, record things, ask things, watch things, play things, listen to things, control devices, read, get medical advice, report crime, inform on others, etc, etc, etc…. Never mind that your ever expanding constellation of ever more convenient and personalizable apps are watching youSoon, your televisions, dvr’s and video games will watch you too. Keep consuming, keep providing free content, that make it ever easier to target more marketing at you to buy more shit you don’t need. When will we wake from our hyperconsumptive soma coma?. I’ll tell you one thing though, somebody is making an ass ton of money collecting and analyzing this exponentially expanding flow of digital content. ” -OSJ

By James Bamford @ The New York Review Of Books:

In mid-May, Edward Snowden, an American in his late twenties, walked through the onyx entrance of the Mira Hotel on Nathan Road in Hong Kong and checked in. He was pulling a small black travel bag and had a number of laptop cases draped over his shoulders. Inside those cases were four computers packed with some of his country’s most closely held secrets.

Within days of Snowden’s documents appearing in The Guardian and The Washington Post, revealing several of the National Security Agency’s extensive domestic surveillance programs, bookstores reported a sudden spike in the sales of George Orwell’s classic dystopian novel 1984. On Amazon.com, the book made the “Movers & Shakers” list and skyrocketed 6,021 percent in a single day. Written sixty-five years ago, it described a fictitious totalitarian society where a shadowy leader known as “Big Brother” controls his population through invasive surveillance. “The telescreens,” Orwell wrote, “have hidden microphones and cameras. These devices, alongside informers, permit the Thought Police to spy upon everyone….”

Today, as the Snowden documents make clear, it is the NSA that keeps track of phone calls, monitors communications, and analyzes people’s thoughts through data mining of Google searches and other online activity. “Any sound that Winston made, above the level of a very low whisper, would be picked up by it,” Orwell wrote about his protagonist, Winston Smith.

There was of course no way of knowing whether you were being watched at any given moment. How often, or on what system, the Thought Police plugged in on any individual wire was guesswork. It was even conceivable that they watched everybody all the time. But at any rate they could plug in your wire whenever they wanted to. You had to live—did live, from habit that became instinct—in the assumption that every sound you made was overheard, and, except in darkness, every movement scrutinized.

Of course the US is not a totalitarian society, and no equivalent of Big Brother runs it, as the widespread reporting of Snowden’s information shows. We know little about what uses the NSA makes of most information available to it—it claims to have exposed a number of terrorist plots—and it has yet to be shown what effects its activities may have on the lives of most American citizens. Congressional committees and a special federal court are charged with overseeing its work, although they are committed to secrecy, and the court can hear appeals only from the government.

Still, the US intelligence agencies also seem to have adopted Orwell’s idea of doublethink—“to be conscious of complete truthfulness,” he wrote, “while telling carefully constructed lies.” For example, James Clapper, the director of national intelligence, was asked at a Senate hearing in March whether “the NSA collect[s] any type of data at all on millions or hundreds of millions of Americans.” Clapper’s answer: “No, sir…. Not wittingly.”

Three months later, following the revelations of the phone-log program in which the NSA collects telephone data—the numbers of both callers and the length of the calls—on hundreds of millions of Americans, Clapper switched to doublethink. He said that his previous answer was not a lie; he just chose to respond in the “least untruthful manner.” With such an Orwellian concept of the truth now being used, it is useful to take a look at what the government has been telling the public about its surveillance activities over the years, and compare it with what we know now as a result of the top secret documents and other information released by, among others, the former NSA contract employee Edward Snowden.

Looking back, the NSA and its predecessors have been gaining secret, illegal access to the communications of Americans for nearly a century. On July 1, 1920, a slim balding man in his early thirties moved into a four-story townhouse at 141 East 37th Street in Manhattan. This was the birth of the Black Chamber, the NSA’s earliest predecessor, and it would be hidden in the nondescript brownstone. But its chief, Herbert O. Yardley, had a problem. To gather intelligence for Woodrow Wilson’s government, he needed access to the telegrams entering, leaving, and passing through the country, but because of an early version of the Radio Communications Act, such access was illegal. With the shake of a hand, however, Yardley convinced Newcomb Carlton, the president of Western Union, to grant the Black Chamber secret access on a daily basis to the private messages passing over his wires—the Internet of the day.

For much of the next century, the solution would be the same: the NSA and its predecessors would enter into secret illegal agreements with the telecom companies to gain access to communications. Eventually codenamed Project Shamrock, the program finally came to a crashing halt in 1975 when a Senate committee that was investigating intelligence agency abuses discovered it. Senator Frank Church, the committee chairman, labeled the NSA program “probably the largest governmental interception program affecting Americans ever undertaken.”

As a result of the decades of illegal surveillance by the NSA, in 1978 the Foreign Intelligence Surveillance Act (FISA) was signed into law and the Foreign Intelligence Surveillance Court (FISC) came into existence. Its purpose was, for the first time, to require the NSA to get judicial approval for eavesdropping on Americans. Although the court seldom turned down a request for a warrant, or an order as it’s called, it nevertheless served as a reasonable safeguard, protecting the American public from an agency with a troubling past and a tendency to push the bounds of spying unless checked.

For a quarter of a century, the rules were followed and the NSA stayed out of trouble, but following the September 11 attacks, the Bush administration decided to illegally bypass the court and began its program of warrantless wiretapping. “Basically all rules were thrown out the window and they would use any excuse to justify a waiver to spy on Americans,” I was told by Adrienne J. Kinne, who in 2001 was a twenty-four-year-old voice intercept operator who conducted some of the eavesdropping. She or her superiors did not have to get a warrant for each interception. “It was incredibly uncomfortable to be listening to private personal conversations of Americans,” she said. “And it’s almost like going through and stumbling and finding somebody’s diary and reading it.”

All during this time, however, the Bush administration was telling the American public the opposite: that a warrant was obtained whenever an American was targeted. “Anytime you hear the United States government talking about a wiretap, it requires—a wiretap requires a court order,” President George W. Bush told a crowd in 2004. “Nothing has changed, by the way. When we’re talking about chasing down terrorists, we’re talking about getting a court order before we do so.” After exposure of the operation by The New York Times in 2005, however, rather than strengthen the controls governing the NSA’s spying, Congress instead voted to weaken them, largely by codifying into the amendment to FISA what had previously been illegal.

At the same time, rather than calling for prosecution of the telecom officials for their role in illegally cooperating in the eavesdropping program, or at least a clear public accounting, Congress simply granted them immunity not only from prosecution but also from civil suits. Thus, for nearly a century, telecom companies have been allowed to violate the privacy of millions of Americans with impunity.

With the arrival of the Obama administration, the NSA’s powers continued to expand at the same time that administration officials and the NSA continued to deceive the American public on the extent of the spying. In addition to the denial I have mentioned by James Clapper, General Keith Alexander, the NSA director, also blatantly denied that his agency was keeping records on millions of Americans. In March 2012, Wired magazine published a cover story I wrote on the new one-million-square-foot NSA data center being built in Bluffdale, Utah. In the article, I interviewed William Binney, a former high-ranking NSA official who was largely responsible for automating the agency’s worldwide eavesdropping network. He quit the agency in 2001 in protest after he saw the system designed mainly for intelligence about foreign threats turned inward on the American public. In the interview, he told how the agency was tapping into the country’s communications and Internet networks. He revealed that it also was secretly obtaining warrantless access to billions of phone records of Americans, including those of both AT&T and Verizon. “They’re storing everything they gather,” he said.

In the months afterward, General Alexander repeatedly denied Binney’s charges. “No…we don’t hold data on US citizens,” he told Fox News, and at an Aspen Institute conference he said, “To think we’re collecting on every US person…that would be against the law.” He added, “The fact is we’re a foreign intelligence agency.”

But the documents released by Edward Snowden show that the NSA does have a large-scale program to gather the telephone records of every Verizon customer, including local calls, and presumably a similar agreement with AT&T and other companies. These are records of who called whom and when, not of the content of the conversations, although the NSA has, by other methods, access to the content of conversations as well. But the NSA has, on a daily basis, access to virtually everyone’s phone records, whether cell or landline, and can store, data-mine, and keep them indefinitely. Snowden’s documents describing the PRISM program show that the agency is also accessing the Internet data of the nine major Internet companies in the US, including Google and Yahoo.

Snowden’s documents and statements add greatly to an understanding of just how the NSA goes about conducting its eavesdropping and data-mining programs, and just how deceptive the NSA and the Obama administration have been in describing the agency’s activities to the American public. In a video interview conducted in his room in the Mira Hotel, Snowden elaborated on the extent of the NSA’s capabilities. “Any analyst at any time can target anyone, any selector, anywhere,” he said.

Where those communications will be picked up depends on the range of the sensor networks and the authorities that that analyst is empowered with. Not all analysts have the ability to target everything. But I sitting at my desk certainly had the authorities to wiretap anyone, from you or your accountant to a federal judge to even the president, if I had a personal e-mail [address].

What Snowden was discussing was the way in which analysts at the NSA can place such things as names, phone numbers, and e-mail addresses on target lists, thus causing communications containing those “selectors” to be intercepted. He seemed to be indicating—although this remains to be officially confirmed—that while under FISA, a court order would be required to enter an American on a target list, analysts have the capability to unilaterally bypass the procedure by simply listing a name or e-mail address on the target list. To understand what Snowden is saying, it is necessary to elaborate a bit on the way the NSA conducts its eavesdropping.

Bamford_2-081513.jpgEdward Gorey Charitable Trust

Drawing by Edward Gorey

During the past decade, the NSA has secretly worked to gain access to virtually all communications entering, leaving, or going through the country. A key reason, according to the draft of a top secret NSA inspector general’s report leaked by Snowden, is that approximately one third of all international telephone calls in the world enter, leave, or transit the United States. “Most international telephone calls are routed through a small number of switches or ‘chokepoints’ in the international telephone switching system en route to their final destination,” says the report. “The United States is a major crossroads for international switched telephone traffic.” At the same time, according to the 2009 report, virtually all Internet communications in the world pass through the US. For example, the report notes that during 2002, less than one percent of worldwide Internet bandwidth—i.e., the international link between the Internet and computers—“was between two regions that did not include the United States.”

Accessing this data is possible through a combination of techniques. Through the most effective of them, the NSA can gain direct access to the fiber-optic cables that now carry most kinds of communications data. According to a slide released by Snowden, the cable-tapping operation is codenamed “UPSTREAM” and it is described as the “collection of communications on fiber cables and infrastructure as data flows past.” It also appears to be both far more secret and far more invasive than the PRISM program revealed by Snowden. Although PRISM gives the NSA access to data from the individual Internet companies, such as Yahoo, Google, and Microsoft, the companies claim that they don’t give the agency direct access to their servers. Through UPSTREAM, however, the agency does get direct access to fiber-optic cables and the supporting infrastructure that carries nearly all the Internet and telephone traffic in the country.

As part of its cable-tapping program, the NSA has secretly installed what amount to computerized filters on the telecommunications infrastructure throughout the country. According to the leaked inspector general’s report, the agency has secret cooperative agreements with the top three telephone companies in the country. Although the report disguises their names, they are likely AT&T, Verizon, and Sprint:

NSA determined that under the Authorization it could gain access to approximately 81% of the international calls into and out of the United States through three corporate partners: Company A had access to 39%, Company B 28%, and Company C 14%.

The filters are placed at key junction points known as switches. For example, much of the communications—telephone and Internet—to and from the northwestern United States pass through a nearly windowless nine-story building at 611 Folsom Street in San Francisco. This is AT&T’s regional switching center. In 2003, the NSA built a secret room in the facility and filled it with computers and software from a company called Narus. Established in Israel by Israelis, and now owned by Boeing, Narus specializes in spyware, equipment that examines both the metadata—the names and addresses of people communicating on the Internet—and the content of digital traffic such as e-mail as it zooms past at the speed of light.

The agency also has access to the telephone metadata—the numbers called and calling and other details—of all Americans. Phone calls from telephone numbers that have been selected as targets can be routed directly to the agency and recorded. According to William Binney, the former NSA senior official, the NSA has established between ten and twenty of these secret rooms at telecom company switches around the country.

It is this daily access to the telephone metadata of all Americans without FISA warrants that the NSA and the Office of National Intelligence tried to hide when they falsely denied that the agency had surveillance records on millions of Americans. For years, the agency also had a nationwide bulk e-mail and Internet metadata collection and storage program, although that was ended in 2011 for “operational and resource reasons,” according to the director of national intelligence.

But according to a joint statement issued on July 2 by senators Ron Wyden and Mark Udall, the real reason the program was shut down was that the NSA was “unable” to prove the usefulness of the operation. “We were very concerned about this program’s impact on Americans’ civil liberties and privacy rights,” they said, “and we spent a significant portion of 2011 pressing intelligence officials to provide evidence of its effectiveness. They were unable to do so, and the program was shut down that year.” The senators added, “It is also important to note that intelligence agencies made statements to both Congress and the [FISA court] that significantly exaggerated this program’s effectiveness. This experience demonstrates to us that intelligence agencies’ assessment of the usefulness of particular collection program—even significant ones—are not always accurate.”

Speaking on Meet the Press, Glenn Greenwald, a lawyer and journalist who wrote the story about the NSA’s collection of phone data for The Guardian, also mentioned a still-secret eighty-page FISA court opinion that, he said, criticized the NSA for violation of both the Fourth Amendment and the FISA statute. According to Greenwald, “it specifically said that they are collecting bulk transmissions, multiple conversations from millions of Americans…and that this is illegal.” The NSA, he said, “planned to try to accommodate that ruling.” On the same program, Representative Mike Rogers, Republican chairman of the House Intelligence Committee, confirmed that the FISA court had issued a critical opinion and said that the NSA had “figured out how to correct that.”

According to The Economist of June 29, “the NSA provided congressional intelligence committees with what it said were over 50 cases in which the programmes disclosed by Mr. Snowden had contributed to the ‘understanding and, in many cases, disruption’ of terrorist plots in America, and over 20 other countries.” In a recent New York Review blog post, Kenneth Roth, director of Human Rights Watch and a former federal prosecutor, commented that “upon scrutiny” many of the plots referred to by the NSA

appear in fact to have been uncovered not because of the mass collection of our metadata but through more traditional surveillance of particular phone numbers or e-mail addresses—the kinds of targeted inquiries that easily would have justified a judicial order allowing review of records kept by communications companies or even monitoring the content of those communications.

At the AT&T facility on Folsom Street and the other locations, fiber-optic cables containing millions of communications enter the building and go into what’s known as a beam-splitter. This is a prism-type device that produces a duplicate, mirror image of the original communications. The original beams, containing Internet data, continue on to wherever they were originally destined. The duplicate beam goes into Room 641A, the NSA’s secret room one floor below, a discovery made by another whistleblower, AT&T technician Mark Klein. There the Narus equipment scans all the Internet traffic for “selectors”—names, e-mail address, words, phrases, or other indicators that the NSA wants to know about. Any message containing a selector is then retransmitted in full to the NSA for further analysis, as are the contents of phone calls selected. With regard to targeted phone numbers, the agency supplies them to the company, which then gives the NSA access to monitor them.

The selectors are inserted by remote control into the Narus equipment by NSA analysts sitting at their desks at the agency’s headquarters at Fort Meade in Maryland or at dozens of locations around the world. What Snowden seemed to be saying in his interview is that as long as certain analysts have an e-mail address, for example, they can simply enter that information into the system and retrieve the content of the e-mails sent from and to that address. There are, by his account, no judicial checks and balances to assure that the targeting of an American has been approved by a FISA court order and not just by NSA employees. These claims by Snowden, and other revelations from the documents he released, should be investigated by either a select committee of Congress, such as the Church Committee, or an independent body, like the 9/11 Commission.

While UPSTREAM captures most of the telecommunications—about 80 percent according to Binney—there are still gaps in the coverage. That is where the PRISM program comes in. With PRISM, the NSA is able to go directly to the communications industry, including the major Internet companies, to get whatever they miss from UPSTREAM. According to the top secret inspector general’s report, the “NSA maintains relationships with over 100 US companies,” adding that the US has the “home field advantage as the primary hub for worldwide telecommunications.”

According to a recent slide released by Snowden, the NSA on April 5, 2013, had 117,675 active surveillance targets in the program and was able to access real-time data on live voice, text, e-mail, or Internet chat services, in addition to analyzing stored data.

In the end, both UPSTREAM and PRISM may be only the tips of a much larger system. Another new document released by Snowden says that on New Year’s Eve, 2012, SHELLTRUMPET, a metadata program targeting international communications, had just “processed its One Trillionth metadata record.” Started five years ago, it noted that half of that trillion was added in 2012. It also noted that two more new programs, MOONLIGHTPATH and SPINNERET, “are planned to be added by September 2013.”

One man who was prescient enough to see what was coming was Senator Frank Church, the first outsider to peer into the dark recesses of the NSA. In 1975, when the NSA posed merely a fraction of the threat to privacy it poses today with UPSTREAM, PRISM, and thousands of other collection and data-mining programs, Church issued a stark warning:

That capability at any time could be turned around on the American people and no American would have any privacy left, such [is] the capability to monitor everything: telephone conversations, telegrams, it doesn’t matter. There would be no place to hide. If this government ever became a tyranny, if a dictator ever took charge in this country, the technological capacity that the intelligence community has given the government could enable it to impose total tyranny, and there would be no way to fight back, because the most careful effort to combine together in resistance to the government, no matter how privately it was done, is within the reach of the government to know. Such is the capability of this technology…. I don’t want to see this country ever go across the bridge. I know the capacity that is there to make tyranny total in America, and we must see to it that this agency and all agencies that possess this technology operate within the law and under proper supervision, so that we never cross over that abyss. That is the abyss from which there is no return.

Church sounds as if he had absorbed the lessons of 1984. From the recent evidence, they are still to be learned.

—July 12, 2013

AT&T Chief Says DOJ Blocked Merger With T-Mobile Will Cost Its Consumers More

In Uncategorized on May 5, 2012 at 4:22 pm

Oldspeak: “Since that deal got killed, our data prices have gone up 30%,” he said. He also blamed the blocked T-Mobile USA deal, in part, for AT&T’s decision earlier this year to impose a limit on the amount of data available to a given customer. However, he said such a move probably would have been necessary regardless of the decision, and that he regretted not imposing the cap sooner.” Austerity measures, affect you in more ways than you think. How bout that. The merger doesn’t happen, so they jack up prices to increase their perceived lost potential profits. And the argument for corporate consolidation and less choice perfectly crystallizes some of the fundamental flaws with oligarchical capitalism.  In the minds of terminal ill Capitalists, More for me, less for you = More for me, more for you. Your basic 2+2-=5 logic. This insatiable lust for more, and the idea that it is good, unbridled greed;  it is unsustainable and certainly catastrophic for our planet, and our ‘civilization’. Every thing in nature grows, and then stops growing. We’ve created a civilization in which that basic physical rule does not apply and we are reaping the consequences: ever rapid resource depletion and contamination, mass extinctions, environmental destruction and contamination, drought, starvation, overcrowding, homelessness, poverty… All because a few hundred Oligarchs want ever ‘more’.  And have conditioned us to believe that we want ever ‘more’ even though the vast majority of us never will attain Oligarchical levels of it. That simple and insidious idea; ‘more’ has led us to the brink of collapse on multiple levels, yet we’re still being told that everything is ok. Why? We need Barefoot Economics. NOW.”

Related Story:

AT&T To Buy T-Mobile: Great For Them, Bad For You

What Does Proposed AT&T And T-Mobile Merger Mean?

By Ethan Smith @ The Wall Street Journal:

The government’s decision to block AT&T Inc.’s T -0.76% takeover of Deutsche Telekom AG’s DTEGY -0.18% T-Mobile USA unit will result in higher prices to consumers, AT&T Chairman and Chief Executive Randall Stephenson contended during a public interview Wednesday.

Speaking at the Milken Institute’s annual global conference, Mr. Stephenson said that the U.S. wireless-telecommunications market can’t sustain the current number of competitors because there isn’t enough wireless spectrum for all of them.

Based on current patterns, wireless data usage will increase 75% a year for at least five years, Mr. Stephenson said.

“We’re running out of the airwaves that this traffic rides on,” he added. “There is a shortage of this spectrum.”

With or without a deal like the one his company unsuccessfully pursued, he said, competitors will be forced to drop out if they can’t find enough wireless capacity to offer more modern data services to growing numbers of customers.

“The more competitors you have, the less efficient the allocation of spectrum will be,” he said. “It’s got to change. I don’t think the market’s going to accommodate the number of competitors there are in the landscape.”

Many countries in Asia, Europe and Latin America have many fewer companies offering wireless voice and data services, letting them allocate bandwidth more efficiently, Mr. Stephenson contended.

“Since that deal got killed, our data prices have gone up 30%,” he said. He also blamed the blocked T-Mobile USA deal, in part, for AT&T’s decision earlier this year to impose a limit on the amount of data available to a given customer. However, he said such a move probably would have been necessary regardless of the decision, and that he regretted not imposing the cap sooner.

“I wish we had moved quicker to change the pricing model to make sure the people who were using the bandwidth were paying for the bandwidth,” Mr. Stephenson said.

Carrier IQ Is Watching You – Secret App On Millions Of Phones Logs Key Taps, Geographic Locations & Received Messages Of Users

In Uncategorized on December 2, 2011 at 2:04 pm

Oldspeak:“So apparently it’s not just iPhones that keep a secret record of your movements. Surveillance companies can use your iPhone to take photos of you and your surroundings without your knowledge. If you use an Apple, Android, BlackBerry, or Nokia smartphone then you may be at risk of being illegally wire-tapped by Carrier IQ. Carrier IQ’s “mobile intelligence platform”, currently on at least 150 million devices surreptitiously records keystrokes, SMS messages, and internet search topics. Without your knowledge or consent. It can’t be turned off or opted out of. It’s always running even, when your phone’s screen is off. The ostensible reason given for this spyware on your phone is it is “a diagnostic tool designed to give network carriers and device manufacturers detailed information about the causes of dropped calls and other performance issues.” -Carrier IQ VP of Marketing Andrew Coward I’m not sure what your private information  has to do with dropped calls and performance. But if it’s simply a ‘diagnostic tool’ Why is its purpose not explicitly delineated? Why is it not accessible to users? Why is there no privacy policy as there is with every other app? These troubling questions remain unanswered by Carrier IQ? But more people are beginning to ask questions. “Without controls on this industry, the threat that surveillance poses to freedom on expression and human rights in general is only going to increase.” -Steven Murdoch of Cambridge Security Group “Ignorance Is Strength”

Related Video:

Related Stories:

Does your smartphone run Carrier IQ? Find out here

Secret app on millions of phones logs key taps

By James Mulroy @ PC World:

If you use an Android, BlackBerry, or Nokia smartphone then you may be at risk of being illegally wire-tapped by Carrier IQ–a provider of performance monitoring software for smartphones–according to reports.

Earlier this month, security researcher Trevor Eckhart announced that he found software made by Carrier IQ that may be logging your every move on your mobile phone. Trevor referred to it as a “rootkit“, a piece of software that hides itself while utilizing privileged access like watching your every move. Carrier IQ didn’t take too kindly to this accusation, and responded aggressively with acease-and-desist letter, and went on to deny this accusation. However, to further back his accusation, Eckhart released a video that he says shows the software in action.

In the video, Eckhart navigates to a list of running applications on his phone, and he found that the application IQRD–made by Carrier IQ–was not shown. However, when he searched all of the applications on the device, Eckhart discovered that IQRD showed up with the option to force stop it; therefore, he determined that the app must have been running. However, when he tried to stop the application, the force stop function did absolutely nothing. Additionally, this application always runs when the device is started, according to his research.

After connecting his HTC device to his computer, Trevor found that IQRD is secretly logging every single button that he taps on the phone–even on the touchscreen number pad. IQRD is also shown to be logging text messages.

In the video, Eckhart shows that Carrier IQ is also logging Web searches. While this doesn’t sound all that bad by itself, it suggests that Carrier IQ is logging what happens during an HTTPS connection which is supposed to be encrypted information. Additionally, it can do this over a Wi-Fi connection with no 3G, so even if your phone service is disconnected, IQRD still logs the information.

Wired goes on to say that the application “cannot be turned off without rooting the phone and replacing the operating system.”

While Eckhart tested his accusation on an HTC device it is likely that Carrier IQ is logging information on millions of more devices. According to Carrier IQ (pdf)”Carrier IQ’s Mobile Intelligence platform is currently deployed with more than 150 million devices worldwide.”

While Carrier IQ has since backed off and apologized for its aggressive legal action against Eckhart, this isn’t the end of the story for Carrier IQ. Paul Ohm, a former Justice Department prosecutor and professor at the University of Colorado Law School, told Forbes that this isn’t just creepy, but it’s also likely grounds for a class action lawsuit, citing a federal wiretapping law.

Make sure to check out the video below to see what Trevor discovered.

 

Update, Nov 30, 2011: iOS jailbreak developer Grant Paul (AKA chpwn) points out on Twitter that earlier versions of iOS appear to have included Carrier IQ. And Erica Sadum of The Unofficial Apple Weblog (TUAW) notes that iOS 5 makes references to Carrier IQ as well. In the TUAW post, Erica analyzes the Carrier IQ references and concludes that Carrier IQ in iOS 5 doesn’t appear to be collecting much data–if any at all (i.e. it may need to be explicitly turned on). Read her story for the full details.

Update 2: The Verge claims that neither the Nexus-branded Android phones nor the Motorola Xoom tablet include Carrier IQ, and suggests that the carriers insist on including the software. We haven’t been able to verify this, but if you have any more information, feel free to tip us off.

 

 

Apple’s iPhone Keeps A Secret Record Of Everywhere You Go, Your Permission Is Not Required

In Uncategorized on April 20, 2011 at 6:02 pm

20th Century Telescreen

Oldspeak: ” ‘Big Brother is watching you’ -George Orwell. As the surveillance state continues to expand under the guise of “convenience” and “personalization” your privacy is invaded and your rights are contracted. Contemplation complete, I’m officially trashing my iPhone. You should too. Your personal “Telescreen” is recording your movements 24-7, sans your permission. It’s not accidental, and it’s not being transmitted to Apple. And there’s nothing you can do about it. Except stop using it.  ‘Apple declined to comment on why the file is created or whether it can be disabled’. Why? Who is this information shared with? Where could it be transmitted? Why is this information not disclosed to users?!”

By Charles Arthur @ The U.K. Guardian:

21st. Century Telescreen. Apple’s iPhone saves every detail of your movements to a file on the device.

Security researchers have discovered that Apple‘s iPhone keeps track of where you go – and saves every detail of it to a secret file on the device which is then copied to the owner’s computer when the two are synchronised.

The file contains the latitude and longitude of the phone’s recorded coordinates along with a timestamp, meaning that anyone who stole the phone or the computer could discover details about the owner’s movements using a simple program.

For some phones, there could be almost a year’s worth of data stored, as the recording of data seems to have started with Apple’s iOS 4 update to the phone’s operating system, released in June 2010.

“Apple has made it possible for almost anybody – a jealous spouse, a private detective – with access to your phone or computer to get detailed information about where you’ve been,” said Pete Warden, one of the researchers.

Only the iPhone records the user’s location in this way, say Warden and Alasdair Allan, the data scientists who discovered the file and are presenting their findings at the Where 2.0 conference in San Francisco on Wednesday. “Alasdair has looked for similar tracking code in [Google's] Android phones and couldn’t find any,” said Warden. “We haven’t come across any instances of other phone manufacturers doing this.”

Simon Davies, director of the pressure group Privacy International, said: “This is a worrying discovery. Location is one of the most sensitive elements in anyone’s life – just think where people go in the evening. The existence of that data creates a real threat to privacy. The absence of notice to users or any control option can only stem from an ignorance about privacy at the design stage.”

Warden and Allan point out that the file is moved onto new devices when an old one is replaced: “Apple might have new features in mind that require a history of your location, but that’s our specualtion. The fact that [the file] is transferred across [to a new iPhone or iPad] when you migrate is evidence that the data-gathering isn’t accidental.” But they said it does not seem to be transmitted to Apple itself.

Map shows location data collected from an iPhone that had been used in the southwest of England

Although mobile networks already record phones’ locations, it is only available to the police and other recognised organisations following a court order under the Regulation of Investigatory Power Act. Standard phones do not record location data.

MPs in 2009 criticised the search engine giant Google for its “Latitude” system, which allowed people to enable their mobile to give out details of their location to trusted contacts. At the time MPs said that Latitude “could substantially endanger user privacy”, but Google pointed out that users had to specifically choose to make their data available.

The iPhone system, by contrast, appears to record the data whether or not the user agrees. Apple declined to comment on why the file is created or whether it can be disabled.

Warden and Allan have set up a web page which answers questions about the file, and created a simple downloadable application to let Apple users check for themselves what location data the phone is retaining. The Guardian has confirmed that 3G-enabled devices including the iPad also retain the data and copy it to the owner’s computer.

If someone were to steal an iPhone and “jailbreak” it, giving them direct access to the files it contains, they could extract the location database directly. Alternatively, anyone with direct access to a user’s computer could run the application and see a visualisation of their movements. Encrypting data on the computer is one way to protect against it, though that still leaves the file on the phone.

Graham Cluley, senior technology consultant at the security company Sophos, said: “If the data isn’t required for anything, then it shouldn’t store the location. And it doesn’t need to keep an archive on your machine of where you’ve been.” He suggested that Apple might be hoping that it would yield data for future mobile advertising targeted by location, although he added: “I tend to subscribe to cockup rather than conspiracy on things like this – I don’t think Apple is really trying to monitor where users are.”

The data inside the file containing the location and time information. This is used to plot the map above

The location file came to light when Warden and Allan were looking for a source of mobile data. “We’d been discussing doing a visualisation of mobile data, and while Alasdair was researching into what was available, he discovered this file. At first we weren’t sure how much data was there, but after we dug further and visualised the extracted data, it became clear that there was a scary amount of detail on our movements,” Warden said.

They have blogged about their discovery at O’Reilly’s Radar site, noting that “why this data is stored and how Apple intends to use it — or not — are important questions that need to be explored.”

The pair of data scientists have collaborated on a number of data visualisations, including a map of radiation levels in Japan for The Guardian. They are developing a Data Science Toolkit for dealing with location data.

Davies said that the discovery of the file indicated that Apple had failed to take users’ privacy seriously.

Apple can legitimately claim that it has permission to collect the data: near the end of the 15,200-word terms and conditions for its iTunes program, used to synchronise with iPhones, iPods and iPads, is an 86-word paragraph about “location-based services”.

It says that “Apple and our partners and licensees may collect, use, and share precise location data, including the real-time geographic location of your Apple computer or device. This location data is collected anonymously in a form that does not personally identify you and is used by Apple and our partners and licensees to provide and improve location-based products and services. For example, we may share geographic location with application providers when you opt in to their location services.”

Privacy invasions via technology

April 2011: iPhone location

British researchers on Wednesday revealed that iPhones (and 3G-enabled iPads) keep track of where you go, including timestamps, on a file that is backed up on your computer and shifted onto any new iPhone or iPad you get. Apple hasn’t said why the file is created or whether the tracking can be prevented.

October 2010: US Transportation Security Agency’s X-ray scanners

The “porno scanners” (as they quickly became known) offered a clothes-free vision of people passing through the backscatter machines (whose level of X-ray exposure was also questioned). People who objected to going through those were obliged to go through remarkably intimate examinations – none of which endeared the TSA to air travellers.

April 2010: Google captures Wi-Fi data

In a series of increasingly embarrassed blogposts over the course of April, May and June, Google admitted that while its cars were driving around to capture its (already slightly controversial) Street View pictures of locations around the world, it had also captured Wi-Fi network names – and data from the open ones, potentially including passwords and usernames. The dispute over whether Google should delete the data, and whether it had broken the law in various countries, rumbled on for months.

December 2009: Eric Schmidt

In a speech, Google’s then-chief executive Eric Schmidt suggested that: “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place. If you really need that kind of privacy, the reality is that search engines – including Google – do retain this information for some time and it’s important, for example, that we are all subject in the United States to the Patriot Act and it is possible that all that information could be made available to the authorities.”

His words provoked an outcry from privacy rights campaigners, who pointed out that privacy is a right, and that it protects every citizen from abuses by those in power.

What Does Proposed AT&T And T-Mobile Merger Mean?

In Uncategorized on March 23, 2011 at 1:21 pm

Oldspeak:“Corporate consolidation yields reduced choice, anti-democratic monopolistic practices, higher rates, worker elimination/job loss & price gouging. In an industry “regulated” by an agency (FCC)  it has captured, one has to wonder how closely this proposed deal will be scrutinized. If the recent ComcastNBC merger provides any indication, the answer appears to be not very closely atal. :-|”

By Eric K. Arnold @ The Media Consortium:

Welcome to the Wavelength, your bi-weekly field guide to the world of media policy. Over the next four months, we’ll be compiling great content, connecting the dots, building context, and reporting how media policy impacts the lives of everyday people. From the ongoing battle over Net Neutrality to the wild world of Internet regulation, from partisan crusades to media accountability, the Wavelength is here to keep you in the know.

This week, we’re focusing on major mergers, holding telecom giants accountable, and the revolving door at the Federal Communications Commission (FCC).

So, without further ado, let’s take a spin through the media zone.

AT&T to Absorb T-Mobile?

On Sunday, AT&T announced it had reached an agreement with T-Mobile to buy the mobile phone service provider for $39 billion. As reported in the New York Times,  the deal would “create the largest wireless carrier in the nation and promised to reshape the industry.”

The immediate upshot is that the number of nationwide wireless carriers would drop from four to three, with Sprint Nextel running a distant third behind AT&T/T-Mobile and Verizon. Another impact could be higher rates for current T-Mobile customers. Advocates of the deal suggest it could improve AT&T’s oft-criticized service, resulting in fewer dropped calls. However, critics note that the roughly $3 billion in projected annual cost savings will likely come at the expense of workers at the hundreds of retail outlets expected to close, if the deal goes through.

Both the Justice Department and the FCC have to sign off on the merger before it can be approved, a process that could take up to a year.

House adds insult to NPR’s injury

On St. Patrick’s Day, the Republican-controlled House voted 228-192 to end federal funding for NPR. The move came on the heels of a secretly recorded video from conservative activist James O’Keefe that purportedly showed NPR fundraiser Ronald Schiller expressing support for Islamic fundamentalism and disavowing the Tea Party as “racist” — leading Schiller and NPR CEO Vivian Schiller (no relation) to resign. The video was later revealed to be excerpted and heavily edited from a longer video which places Schiller’s remarks in context.

At TAPPED, Lindsay Beyerstein watched the entire two hour video, and notes that:

O’Keefe’s provocateurs didn’t get what they were looking for. They were ostensibly offering $5 million to NPR. Their goal is clearly to get Schiller and his colleague Betsy Liley to agree to slant coverage for cash. Again and again, they refuse, saying that NPR just wants to report the facts and be a nonpartisan voice of reason.

As reported in the Washington Times, the Democratic-controlled Senate is unlikely to pass the bill, making NPR’s federal funding safe—for now. However, the timing of the vote suggests that House Republicans are essentially endorsing O’Keefe’s questionable tactics, showing that their dislike of the so-called liberal media is of greater concern.

Telecoms add ramming to their list of illegal practices

A recent AlterNet story by David Rosen and Bruce Kushnick details sneaky, unethical, and possibly illegal telecom tactics, the most recent of which is “ramming.”

“Ramming” happens “when a phone company‘s customer is put on a service plan or package s/he did not need or want or cannot even use.” According to the article, “An estimated 80 percent of phone company customers have been overcharged or are on plans they did not need or even order. These and other scams can cost residential customers $20 or more a month extra and small business customers up to thousands of dollars a month.”

These practices are insidious because modern telephone bills are so cryptic that it’s not easy for even the most astute customer to figure out they’ve been duped.

Powell’s next move

Last Tuesday, former FCC chair Michael Powell announced that he has taken over as president of the National Cable and Telecommunications Association. Leading media advocacy organization Free Press snarkily congratulated Powell via a statement from Managing Director Craig Aaron:

If you wonder why common sense, public interest policies never see the light of day in Washington, look no further than the furiously spinning revolving door between industry and the FCC.

Former Chairman Michael Powell is the natural choice to lead the nation’s most powerful cable lobby, having looked out for the interests of companies like Comcast and Time Warner during his tenure at the Commission and having already served as a figurehead for the industry front group Broadband for America.

AT&T imposes monthly usage caps

Finally, we’ve got more bad news for those unlucky enough to have AT&T as their Internet and cable service provider. As Truthout’s Nadia Prupis recently reported, AT&T customers who use the company’s U-Verse cable TV service and DSL hi-speed Internet services in the United States can expect a bump in their monthly bills if they exceed a new usage cap – 50GB for DSL customers and 250 GB for U-Verse users. Those who exceed the storage fee will be charged $10 extra for every 50GB over the limit.

Surprisingly, the telecom behemoth continues to insist their price-gouging moves are in the consumer’s best interests. According to an AT&T press release: “Our new plan addresses another concern: customers strongly believe that only those who use the most bandwidth should pay more than those who don’t use as much.”

Personally, I don’t spend too much time thinking about how much bandwidth other people are using, as long as I’m getting the download speeds I’m paying for.

This post features links to the best independent, progressive reporting about media policy and media-related matters by members of The Media Consortium. It is free to reprint and repost. To read more of The Wavelength, click here. For the best progressive reporting on critical economy, environment, health care and immigration issues, check out The AuditThe MulchThe Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets, and is produced with the support of the Media Democracy Fund.

AT&T To Buy T-Mobile: Great For Them, Bad For You

In Uncategorized on March 20, 2011 at 10:34 pm

Oldspeak:“Corporate consolidation continues its march on a path of destruction of choice and flouting of anti-trust laws. “Less competition always results in higher prices” -Sascha Segan. Coming soon, from AT&T/T-Mobile, higher prices, poorer service…. I might have to switch to CREDO MOBILE.  B & L soon come:”

By Sascha Segan @ PC Magazine:

AT&T just announced it will buy T-Mobile USA for $39 billion. If the transaction gets approved by the government and closes in a year as planned, it will create the nation’s largest wireless carrier by far.

While this is great news for both companies, it’s an awful idea for consumers – and I desperately hope the US antitrust authorities rake this merger over the coals.

An AT&T/T-Mobile merger at least makes more sense than the silly T-Mobile/Sprint idea which was being bandied about. Both carriers use the same technologies: GSM, HSPA+ and LTE. While they’re on different frequency bands, radios which use all of the relevant bands are becoming easier to build.

The merger neatly solves T-Mobile’s long-term problem of not having enough spectrum for LTE, the 4G technology which will soon be a global standard. It gives T-Mobile’s struggling parent, Deutsche Telekom, a gigantic cash infusion. And it lets AT&T once again position itself as the number-one carrier against Verizon Wireless, which leapfrogged AT&T technologically this year with Verizon’s 4G LTE launch.

AT&T is ahead of T-Mobile on building LTE. T-Mobile is far ahead of AT&T on building HSPA+, a intermediate 4G technology that fits right between the carriers’ existing 3G networks and LTE. Together, they could have a smooth and powerful nationwide network.

AT&T’s press release for the merger backs this up. The combined carrier will be able to build out much more LTE Than AT&T could alone, by combining AT&T’s 700 Mhz spectrum with T-Mobile’s AWS spectrum.

For stockholders, this all sounds great. With reduced competition and the efficiencies of a combined network, the new company will probably be quite profitable.

For phone owners, tech lovers, and American consumers, this is a total disaster.

Rates Will Rise, Customer Service Will Drop

Let’s start with a basic fact: less competition always results in higher prices than you would have had otherwise. T-Mobile has always been a value leader, offering low prices and some innovative plans, such as its Even More Plus plans which gave monthly discounts in exchange for paying the full up-front price for phones. These plans will go away and the combined carrier will normalize at AT&T’s higher rates.

In AT&T’s press release for the merger, the company doesn’t bother to rebut this idea. Rather, the carrier says there’s already plenty of competition and implies that prices are so low that Americans shouldn’t be too concerned. AT&T also shows a disingenuous chart explaining that prices dropped when carriers merged over the past ten years. Of course, it doesn’t show what would have happened to prices if those carriers hadn’t merged.

This merger also means less phone choice for US consumers. Unlike in most other countries, the American phone market is dominated by the carriers; the carriers have to approve and sell most phones. The process of making it through approval labs, and the space on carrier store shelves, limit the number of phones each carrier can handle at once. I’m pretty sure that the number of phones carried by AT&T/T-Mobile will be less than the current number carried by the two carriers separately, because they will want to create efficiencies and unify their product lines.

This doesn’t mean T-Mobile’s phones will go away – I see the merged carrier cherry picking an iPhone here, a MyTouch 4G there. But it means that there will be fewer choices overall for American consumers, and fewer chances for new manufacturers or ideas to appear in the marketplace.

From a customer service perspective, make no mistake, AT&T will subsume T-Mobile. The merged carrier will not have T-Mobile’s friendliness, nimbleness, or level of customer service. Just like in the horrifying Sprint-Nextel mess or during the long, slow, grinding AT&T/Cingular merger, the merged carrier will sink to the minimum customer service level of its parts.

I’ve sung this song before. I don’t see how the biggest carriers getting bigger improves anything for consumers. We’ve seen many times around the world how duopolies or cozy tri-opolies can retard innovation and drag up prices (hello, Canadians!) and the US government should do everything in its power to prevent the US wireless market from becoming wholly owned by AT&T and Verizon Wireless.

Short of killing this merger entirely, I’m not sure what the government could do to maintain competition here. AT&T and T-Mobile are the only major GSM carriers; everybody else is CDMA. That means if the government forced the merged carrier to divest some markets to be picked up by someone else, the buyer of the divested markets won’t be able to integrate them easily into its existing network.

If this merger goes through, it only becomes more urgent for MetroPCS, Cricket and US Cellular to band together into a new, single low-cost force in the wireless market. Together, the three carriers would have around 20-21 million users. They all use the same CDMA technology, and their spectrum holdings largely don’t overlap. A new nationwide value leader could help reduce the negative effects of this merger for US consumers.

AT&T-T-Mobile USA deal may face regulatory hurdles

Oldspeak:”But it might not be a done deal just yet, maybe regulators will actually regulate this industry. ‘The biggest issue for the FCC and for the Department of Justice, which also needs to approve this merger, is whether a merger between these companies would concentrate too much power in the hands of a single company, which could affect pricing and services for consumers.’ -Marguerite Reardon’ Heres hoping the FCC and DOJ don’t roll over on this one too.”

By Marguerite Reardon @ CNET:

From a network and technology perspective, the $39 billion marriage between AT&T and T-Mobile USA is a no-brainer, but the companies may have to do some smooth talking to get the deal approved by regulators.

AT&T and T-Mobile USA, which is owned by German phone company Deutsche Telekom, each use the GSM technology and each company plans to deploy the 4G technology known as LTE in the future. AT&T plans to launch its LTE network this summer, and T-Mobile has said in the past that LTE is on its roadmap.

Currently, each company has been upgrading its network to the latest version of 3G wireless technology called HSPA+. (T-Mobile stirred up controversy last summer when it began marketing the HSPA+ network as 4G. AT&T, which initially criticized T-Mobile for this, began calling its own HSPA+ network 4G earlier this year.)

The technology synergies between T-Mobile and AT&T are stark contrast to how T-Mobile lined up with Sprint Nextel, which had been rumored to be eying T-Mobile for more than two years. Sprint uses a different network technology called CDMA, which is the same technology that Verizon Wireless uses. What’s more Sprint is using WiMax for its next generation wireless network.

While regulators would have been much more eager to see No. 3 Sprint Nextel merge with No. 4 T-Mobile so that they could take on No. 1 Verizon Wireless and No. 2 AT&T, the reality is that such a scenario would have been an integration nightmare for Sprint. Sprint is still struggling to make sense of its 2005 acquisition of Nextel, which also used a completely different technology.

“There’s no question that AT&T and T-Mobile are a very good fit from a technology standpoint,” said Charles Golvin, an analyst with Forrester Research. “A Sprint-T-Mobile deal would have given these companies scale, but it made sense from an integration standpoint.”

But even though the deal makes sense from a technology standpoint, it won’t necessarily be smooth sailing. For one, regulators are likely to scrutinize this deal closely. And secondly, even though AT&T and T-Mobile use the same technology, they use different wireless spectrum bands to deliver their services. This means that AT&T will have to move T-Mobile’s customers to different spectrum bands in order to integrate the networks.

Regulatory scrutiny
First let’s look at the regulatory picture. The biggest issue for the FCC and for the Department of Justice, which also needs to approve this merger, is whether a merger between these companies would concentrate too much power in the hands of a single company, which could affect pricing and services for consumers. T-Mobile has always been a price leader. It’s safe to say that AT&T will likely not adopt T-Mobile pricing, which means that consumers will be losing a more affordable player in the wireless market.

And the reason is simple. It won’t need to. AT&T and Verizon Wireless already control more than 40 percent of the existing wireless market. And T-Mobile, the smallest of the major wireless operators, would concentrate AT&T’s market power further. A combined AT&T and T-Mobile would have nearly 130 million subscribers, which is a third more than Verizon Wireless, the No. 1 nationwide player in the country. The new AT&T-T-Mobile would also have twice as many customers as No. 3. Sprint Nextel.

The FCC has already expressed concern over the competitive landscape in wireless. In May the FCC warned that the industry is getting too concentrated. In its report, the agency said that since 2003, market concentration in wireless has increased 32 percent. The report indicates that 60 percent of the nation’s subscribers and revenue come from the country’s two largest wireless providers: AT&T and Verizon Wireless. The FCC noted that these companies are continuing to gain customers as other national operators, Sprint Nextel and T-Mobile USA, have been losing subscribers.

So far the FCC hasn’t issued a statement regarding the proposed AT&T-T-Mobile merger. But insiders at the agency have said previously that they would be more concerned with an acquisition between AT&T and Verizon Wireless and either Sprint Nextel or T-Mobile USA than a merger involving Sprint Nextel and T-Mobile.

AT&T and Verizon Wireless have scoffed at the FCC’s assertion that the wireless industry is not competitive. And the companies have repeatedly pointed to the fact that there are often four to five players in almost every major market in the U.S. Smaller players such as MetroPCS and Leap Wireless have aggressively moved into new markets. And U.S. Cellular, a regional wireless carrier, has gotten high marks in terms of customer satisfaction in many national surveys.

But the fact remains that AT&T and Verizon Wireless have far more customers than any of these smaller players. Indeed, Golvin estimates that a combined AT&T and T-Mobile would mean that three out of four wireless subscribers in the U.S. would be a customer of either AT&T or Verizon Wireless.

What’s more, combining AT&T and T-Mobile, means that there would be only one national wireless carrier using the GSM technology. Verizon and Sprint Nextel use CDMA, as mentioned above. This would give consumers, who want to use their phones overseas in places such as Europe, only one choice in national U.S. carrier.

At least one congressional leader is already pushing the FCC and Department of Justice to take a hard look at this deal.

“With every passing day, wireless services are becoming more and more important to the way we communicate,” John D. Rockefeller IV (D-West Virginia), chairman of the Senate’s Commerce Science and Transportation committee, said in a statement. “So it is absolutely essential that both the Department of Justice and the FCC leave no stone unturned in determining what the impact of this combination is on the American people.”

While it is possible that the FCC and/or the Justice Department could simply stop the merger from happening, it’s unlikely they’d do that, Golvin said. Instead, it’s more likely that these agencies would put conditions on the merger and require AT&T to divest some of its wireless spectrum assets, he added.

“I don’t believe this will have a ‘yes’ or ‘no’ outcome,” Golvin said. “I think what the regulators do will be more about the extent of AT&T’s divestiture.”

In fact, the FCC took this approach when it approved Verizon’s $28.1 billion merger of regional carrier Alltel Wireless, which closed in January 2009. Instead of analyzing this merger on a national basis, the FCC analyzed each individual market where Verizon and Alltel operated. And in markets where there was too much concentration, the FCC required that the Verizon sell those wireless assets. All told, Verizon agreed to sell operations in 105 markets where Alltel also operated.

AT&T CEO Randall Stephenson spoke to the Wall Street Journal on Sunday and said that he is confident that the company will get regulatory approval. He said that the merger will help “conserve spectrum at a time when that resource is in tight supply.”

He also said that the wireless market is already very competitive.

“This is probably the most fiercely competitive wireless market in the world,” he was quoted as saying. “The majority of Americans have the option of five different wireless carriers.”

Spectrum issues
Regulatory issues may be only one hurdle the companies face as they look at integrating the two wireless networks. While it’s true that T-Mobile and AT&T each use GSM technology, the carriers also use different bands of spectrum to deliver their services. Specifically, T-Mobile uses the spectrum it bought in the AWS spectrum auction in 2006 to build its 3G wireless network.

AT&T also acquired spectrum in that auction. And it is using this AWS spectrum to build its LTE network. AT&T uses its 850MHz and 1900MHz spectrum to deliver its 3G service. Part of the reason that AT&T wanted T-Mobile in the first place was to get more of the AWS spectrum for its LTE network.

Meanwhile, T-Mobile has no additional spectrum to deploy LTE, since it’s been using the AWS spectrum for its 3G service. What this means is that once AT&T and T-Mobile merge, AT&T will have to move all of T-Mobile’s existing 3G customers (which includes the supposed 4G HSPA+ customers) to AT&T’s 850MHz and 1900MHz spectrum. This means T-Mobile customers will need new handsets, since the existing T-Mobile 3G HSPA and 4G HSPA+ handsets will no longer work on the AWS spectrum.

The migration of additional T-Mobile customers to AT&T’s already congested 3G network could also be painful for existing AT&T customers. But Golvin believes that in the long run, AT&T will actually benefit from the merger with T-Mobile because it will allow AT&T to use the newly upgraded backhaul systems that T-Mobile has put in place to link its radio network to the hard-wired Internet and telephone backbone.

“For some period of time, customers from either network may find that the quality is not what they would like,” Golvin said. “But AT&T won’t be able to just turn off the T-Mobile network. It will take time and it will be done in stages. I think what might be more painful for some T-Mobile customers is that they were T-Mobile customers because they didn’t want to be AT&T customers.”

The deal comes just days before the wireless industry meets in Orlando, Fla., for the CTIA’s spring trade show and conference. On Tuesday morning, CEOs from all four major U.S. wireless carriers–AT&T, Verizon Wireless, Sprint Nextel, and T-Mobile–will take the stage for a roundtable discussion. FCC Chairman Julius Genachowski is also expected to give a speech Tuesday morning from CTIA. It’s unclear how much if anything the players involved in the merger will say at CTIA. But CNET will be there, so stay tuned.

 

 


 

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