Wireless Positioned Well

AT&T Inc. and Verizon Communications Inc. have much at stake from the standpoint of their wireless or wired networks. As large wireless carriers, both companies are poised to be winners because the government is acknowledging the role of mobile devices for accessing the Web, says Michael Shinnick, portfolio manager for the Wasatch-1st Source Long/Short fund in South Bend, Indiana. Shinnick holds technology shares in his $250 million fund.

While AT&T is happy about potentially getting more spectra, CEO Randall Stephenson reminded regulators in a blog post this week how much his company has invested in a national broadband network.

"As the plan rightly recognizes, we cannot realize its ambitious goal of major new broadband deployments without continued, massive private sector investment. Even in the midst of this painful recession, AT&T invested $17 billion in 2009—and we intend to increase our investments this year by as much as $2 billion. Investments at this high level are rare for any company and should not be taken for granted," Stephenson wrote in his post.

Broadcasters Worried

The government is so intent on giving wireless companies more spectrum, broadcasters are worried that they're going to be forced to give it up whether they want to or not.

Broadcasters, the major networks, and TV station owners like Tribune Co. are prickly because they think they're going to be forced to sell off those airwaves, or spectra, that they're not currently using. The National Association of Broadcasters says it's concerned "many aspects of the plan may in fact not be as voluntary as originally promised."

The problem with any major piece of legislation affecting the technology and telecom industries is that the law is unlikely to keep pace with advances, says Jeff Kagan, an independent telecom analyst in suburban Atlanta.

"New technologies are not really addressed" in the FCC proposal, Kagan says. He finds similarities between the government's approach today to the 1996 telecom law, which he says didn't address the then-emerging broadband or wireless communications that are dominant technologies today.

Kagan agrees that the U.S. is falling behind other countries in terms of access and quality of Internet (speeds are much higher in other countries), he also says government intervention may slow innovation. "The approach to this is admirable, but I don't think it will work."