Son ‘Setting’ on the Facts in Broadband Pitch to US Chamber of Commerce

Tuesday, Masayoshi Son (CEO of SoftBank, and Chairman of Sprint), spoke before an audience at the United States Chamber of Commerce to discuss the state of wireless broadband quality in the United States. His pitch was simple, let me make it faster. Mr. Son’s appearance was aimed at arguing for a T-Mobile-Sprint merger in the hopes of creating more competition, and thus lower prices for consumers. Full disclosure, I was in the audience yesterday and listened to the entire presentation from start to finish and though the style of Mr. Son’s delivery certainly struck the right tone, the problems came through when the substance of what he said was put to the simple test of what could hold up as credible.

Much of Mr. Son’s grand vision for faster Internet speeds came prepackaged with data that suggested that the U.S. was “falling behind” when it came to Internet speeds around the world. However, when looking at the “State of the Internet,” a report released by Akamai late last year, shows that the U.S. isn’t falling behind.  In fact, when you look at individual states, Internet speeds are averaging higher than most countries around the world:

The third quarter of 2013 saw strong quarter-over-quarter increases across the top 10 states, as shown in Figure 18, with all of the states seeing average connection speeds grow by more than 10% from the second quarter.

Quarterly changes among the top 10 states ranged from 3.7% in Washington to 14% in Delaware. Looking across the whole country, a total of 44 states experienced quarterly increases.

The question then would seem to be, why would Mr. Son focus so much of his presentation on a pitch that seemed to ignore some of the glaring evidence that clearly contradicted his premise that the U.S. was falling behind in terms of broadband speed and innovation? in a piece on Gigaom.com, Kevin Fitchard gives some insight into exactly what may be at play with Son’s full-court press to the US Chamber of Commerce:

Son’s argument is that Verizon and AT&T, as the country’s two mega-carriers, have such scale they effectively face no competition. Basically Son is making the case that even though AT&T’s acquisition of T-Mobile was stillborn, the duopoly Sprint always feared still emerged. Only by creating a third mega-carrier can regulators break that duopoly hold, forcing down prices for consumers, Son claimed.

That’s a powerful argument if it falls on the right ears, but anyone that looks at what’s actually going on in the U.S. mobile market right now wouldn’t be so convinced. There’s already a price war raging, and it wasn’t started by Sprint.

Tiny T-Mobile launched that offensive on its own, and it’s having its intended effect. In the last nine months, all of the major carriers have lowered pricing to a greater or lesser degree. They’ve started offering more flexible plans for customers who buy their handsets outright. And they’ve all emulated T-Mobile’s new upgrade program Jump. Even the country’s most expensive carrier Verizon hasn’t been immune, though it’s been more insulated than AT&T and Sprint.

The real issue here seems to be that Mr. Son is trying to fast track a merger that would serve his interests and he’s using flawed data and omitting major evidence that cuts against the credibility of his main arguments. The United States is NOT falling behind, and the competition that he says doesn’t exist is actually happening as we speak with T-Mobile already making moves within the industry. The “price wars” that Mr. Son promised during his presentation to the Chamber have already begun. The Taxpayers Protection Alliance (TPA) is always looking for free-market solutions that benefit taxpayers and consumers but those solutions must be based in fact, not mired in murky statistics that are cherry-picked to aide one entity’s own interests. There will be more discussion in the public square as Mr. Son continues to push his agenda, and TPA will be paying close attention to what is being said, and done.