SIDLEY AUSTIN LLP BEIJING LOS ANGELES 1501 K STREET, N.W. BRUSSELS NEW YORK WASHINGTON, D.C. 20005 CHICAGO SAN FRANCISCO (202) 736 8000 DALLAS SHANGHAI (202) 736 8711 FAX FRANKFURT SINGAPORE GENEVA SYDNEY HONG KONG TOKYO LONDON WASHINGTON, D.C. [email protected] (202) 736 8088 FOUNDED 1866 September 30, 2009 Marlene H. Dortch Secretary Federal Communications Commission 445 12th Street SW Washington, DC 20554 Re: Notice of Inquiry, Fostering Innovation and Investment in the Wireless Communications Market; A National Broadband Plan for Our Future, GN Docket Nos. 09-157, 09-51 (rel. Aug. 27, 2009). Dear Ms. Dortch: Pleased find the enclosed Comments of AT&T Inc. responding to the above-referenced Notice of Inquiry (“Notice”). These Comments were filed electronically today via the Commission’s Electronic Comments Filing System (“ECFS”). Also enclosed, as attachments to the Comments of AT&T Inc., are responses to the Notice by the following leaders in the fields of economics and technology as they relate to wireless innovation, investment, competition and sound public policy: David J. Farber: Dr. Farber is the Distinguished Career Professor of Computer Science and Public Policy at Carnegie Mellon University. He previously served as Chief Technologist at the Federal Communications Commission and as a member of the Commission’s Technological Advisory Council. Hailed by Wired magazine as the “Paul Revere of the digital revolution” and widely recognized as the “Grandfather of the Internet,” Dr. Farber has also been a member of the U.S. Presidential Advisory Board on Information Technology, the Advisory Council of the CISE Directorate of the National Science Foundation, the Board of Trustees of the Internet Society, and National Research Council’s Computer Science and Telecommunications Board. Dr. Farber received the prestigious John Scott Award for Contributions to Humanity (1997), was named by Network World as one of the 25 most powerful people in Networking (1999), and was listed by Business Week among the top 25 leaders in E-Commerce (2002). Sidley Austin LLP is a limited liability partnership practicing in affiliation with other Sidley Austin partnerships Marlene H. Dortch September 30, 2009 Page 2 Gerald R. Faulhaber: Dr. Faulhaber is Professor Emeritus of Business and Public Policy at the Wharton School of the University of Pennsylvania. He has researched and written widely in spectrum policy for wireless telecommunications, network neutrality for the Internet, and telecommunications policy and regulation. Dr. Faulhaber previously served as Chief Economist of the Federal Communications Commission (2000-2001), and currently serves on the Editorial Board, Information and Economic Policy and the Advisory Board, Research Program on Telecommunications and Information, Columbia University. Thomas W. Hazlett: Dr. Hazlett is Professor of Law & Economics and Director, Information Economy Project, at George Mason University. From 1991 to 1992, he served as Chief Economist of the Federal Communications Commission. Dr. Hazlett is published widely in academic and popular journals on the economics of telecommunications markets and, in particular, radio spectrum allocation. He is a columnist for the Financial Times and has provided expert testimony to federal and state courts, regulatory agencies, committees of Congress, foreign governments, and international organizations. Michael L. Katz: Dr. Katz is the Director of the Institute for Business Innovation at the University of California, Berkeley, where he has joint faculty appointments in the Haas School of Business Administration and the Department of Economics. Dr. Katz served as Chief Economist at the Federal Communications Commission during the Clinton Administration and as the chief economist (Deputy Assistant Attorney General) in the Antitrust Division of the Department of Justice during the George W. Bush Administration, and he has also served as a consultant to both agencies. Dr. Katz is widely recognized as a leading expert in telecommunications policy and the economics of network industries. Please call me or email me with any questions. Sincerely, /s/ David L. Lawson David L. Lawson cc (via email): Peter Trachtenberg Jamison Prime Before The FEDERAL COMMUNICATIONS COMMISSION Washington, DC 20554 ) In the Matter of ) ) Fostering Innovation and Investment in the ) GN Docket No. 09-157 Wireless Communications Market ) ) A National Broadband Plan For Our Future ) GN Docket No. 09-51 ) COMMENTS OF AT&T INC. David L. Lawson Michael P. Goggin James P. Young Jack S. Zinman Christopher T. Shenk Gary L. Phillips SIDLEY AUSTIN LLP Paul K. Mancini 1501 K Street, N.W. D. Wayne Watts Washington, D.C. 20005 AT&T Inc. 202-736-8088 1120 20th Street, N.W. Washington, D.C. 20036 202-457-2055 Its Attorneys September 30, 2009 TABLE OF CONTENTS INTRODUCTION AND SUMMARY ........................................................................................... 1 I. THE U.S. WIRELESS INDUSTRY IS EXTRAORDINARILY INNOVATIVE, AND AT&T AND OTHER CARRIERS PLAY A LARGE AND ESSENTIAL ROLE IN THAT INNOVATION. .................................................................................... 12 A. “Edge” Innovation. ............................................................................................... 13 B. The Essential Role of Carriers in Innovation at all Layers of the Ecosystem. ............................................................................................................ 18 1. AT&T: An Innovation Leader. ................................................................ 19 2. Carrier Investment Enables The Platforms Needed for the Entire Wireless Ecosystem. ................................................................................. 25 3. Carrier Innovation Within the Network. ................................................... 29 4. Carrier Innovation That Drives Equipment, Device and Application Innovation. ............................................................................ 35 C. Collaboration, Vertical Arrangements and Experimentation. ............................... 40 D. Machine-to-Machine: The Next Innovation Frontier. ......................................... 46 II. THE WIRELESS INDUSTRY’S EXTRAORDINARY RATE OF INNOVATION IS A DIRECT RESULT OF THE COMMISSION’S POLICIES CONCERNING SPECTRUM AND COMPETITIVE FLEXIBILITY. .......................... 53 A. The Four Foundational Commission Policies That Have Fostered Innovation. ............................................................................................................ 54 B. These Foundational Policies Are Especially Well-Adapted To the Realities of The Modern Wireless Marketplace. ................................................................. 60 C. The Commission Should Retain and Strengthen These Policies. ......................... 67 III. SPECTRUM ISSUES. ...................................................................................................... 68 A. Making More Licensed Spectrum Available, Secondary Uses And Auctions. ............................................................................................................... 68 B. Forced Spectrum Sharing. ..................................................................................... 75 C. Enforcing Interference Rules. ............................................................................... 87 IV. NETWORK INFRASTRUCTURE EQUIPMENT, DEVICES AND APPLICATIONS. ............................................................................................................. 92 A. Network Infrastructure And Systems. ................................................................... 92 B. Devices, Smart Phones, And Machine To Machine Applications. ..................... 104 C. Applications, “Openness,” and Technical Standards. ......................................... 106 CONCLUSION ........................................................................................................................... 122 3 Before The FEDERAL COMMUNICATIONS COMMISSION 445 12th Street, S.W., Washington, DC 20554 ) In the Matter of ) ) Fostering Innovation and Investment in the ) GN Docket No. 09-157 Wireless Communications Market ) ) A National Broadband Plan For Our Future ) GN Docket No. 09-51 ) COMMENTS OF AT&T INC. Pursuant to the Notice of Inquiry (“Notice”) released by the Commission on August 27, 2009,1 AT&T Inc. (“AT&T”) submits the following comments. INTRODUCTION AND SUMMARY AT&T welcomes this opportunity to further the Commission’s “understanding of where and how innovations are happening” in the wireless industry.2 Innovation has always been front and center at AT&T. Scientists in AT&T’s “Labs” division invented cellular telephony (and the transistor, the laser, fiber optic cable, the solar cell, the Unix operating system, key HDTV algorithms and much else).3 We developed core features of what became the 3G wireless standards and the carrier-grade quality-of-service standards that have turned Wi-Fi into a robust and widely used service, and we continue to pursue fundamental advances that guide the entire industry. Today, AT&T scientists and engineers are working on, among other things, 5G standards that will support gigabit wireless speeds using largely untapped terahertz spectrum, 1 Notice of Inquiry, Fostering Innovation and Investment in the Wireless Communications Market; A National Broadband Plan For Our Future, FCC 09-66, GN Docket Nos. 09-157, 09- 66 (rel. Aug. 27, 2009) (“Notice” or “Inquiry”). 2 Notice ¶ 4. 3 AT&T Website,