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AT&T/T-Mobile Merger 'Not In the Public Interest'
jfruhlinger writes "AT&T's plan to merge with T-Mobile just hit a pretty big snag. The FCC declared the merger would be anti-competitive and not in the public interest."
According to the NY Times, the FCC seeks to hold a hearing before an administrative law judge in which the burden would be upon AT&T to prove the deal isn't anti-competitive.
you have to rent your home phone?
Why was the Verizon/Alltel deal OK, but AT&T and T-mo not? I don't see the difference... Sprint is (and would be) a distant 3rd option. sheesh.
Unfortunately, the FCC can shout all they want, but they have no say in the merger at this point. It is the SEC who is going to rubber stamp the merger. After last year, the FCC pretty much can go after pirate radio stations, but essentially that is it in their enforcing abilities. Stopping a merger? Not their bailiwick.
T-Mobile has a banging-hot chick in their advertisements. AT&T does not have a banging-hot chick in their advertisements. Banging-hot chicks are clearly in the public interest.
Do you even lift?
These aren't the 'roids you're looking for.
This is not in the public interest but allowing fragmentation of cellular standards between GSM/HSPA and CDMA was in the public interest by allowing the major carriers to offer incompatible services so that they did not have to directly compete with each other was? Was it in the public interest to allow a a further fragmentation of GSM/HSPA between standard HSPA with AT&T and AWS for T-Mobile? Was it in the public interest to allow further fragmentation of CDMA with Sprint going early with CDMA + WiMax?
The major carriers could have all agreed to use HSPA years ago and shared the standard frequencies used in Canada just like how Canada has Telus, Bell, Rogers and smaller virtual carriers all operating HSPA frequency networks compatible with the iPhone and other popular handsets.
Jesus was a compassionate social conservative who called individuals to sin no more.
Larry Solomon, senior vice president of corporate communications at AT&T, called the F.C.C.’s action “disappointing.”
“It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the U.S. economy desperately needs both,”
Just because AT&T continues to say that the deal would result in investment does make it true. If they were interested in investing in infrastructure and jobs, they would do it. Instead they want to buy T-Mobile, loot whatever is left in their coffers and lay off all of their workers.
When an organization as corrupt as the United States government is coming out against a deal, you can be certain that something is rotten in Denmark.
and get paid for lying through my teeth!
Hey! We're buying T-Mobile to keep it out of the hands of our rivals. We don't care about the customers or the service, in fact we just want T-Mobile gone. But we'll tell you that the merger will create tens of thousands of jobs! And fewer companies in the marketplace means more competition! Yeah, baby!
I'm glad someone in the FCC has the cojones to stand up to this sort of nonsense.
...that way, Google can talk (read boast) of true vertical integration. How about that?
By the way, the insider trading is allowed to the government officials it seems, never mind that I believe it's above government's authority to regulate business activity in any way, including this nonsense, but how about checking who from the government set which bets on the stock market, given that they have voted themselves an exclusion from insider trading laws and have all the necessary information to set their bets to come out on top of any trade like this, where government is involved in making decisions.
When FDA makes a decision about allowing a drug on a market, the officials there don't have to guess, they know what the market effect will be (will the stock price go up or down dramatically, as it happens with drug companies based on FDA decision).
All of this just shows how really incompetent the government officials are, that with all this information and all this power and all this exclusion from the rules they themselves set up for the rest of the people in the country, they are still not multi billionaires, every one of them, completely cornering the market with every decision they make.
Or maybe they are, and they just have loopholes that allow them to hide this information from the eyes of the public?
You can't handle the truth.
Assuming AT&T can't by T-Mobile,who else is going to buy / merge with T-Mobile?
The whole deal was based around AT&T hugely over paying for the benefit of reducing competition,
other companies may well want to buy T-Mobile, it just doesn't make sense at the rate AT&T was paying.
AT&T could even buy parts of T-Mobile, either network or spectrum, but if they can't get anything that reduces competition,
then they have no reason to pay more than anybody else, and have an existing network that they can invest in without competing over bid price.
T-Mobile really does need to grow by being acquired or a merger, in order to present real competition to AT&T. I think it will happen.
While TMobile service languishes in some areas, as a subscriber of ~7 years (flipped in years ago after AT&T Cellular last went tits up), while their domestic service presence isn't quite as dominant as Verizon, I enjoy international travel with my cell and a respectable domestic rate versus the competitors that I continue to pray they don't get sucked into the vortex of Verizon, AT&T, and increasingly Sprint of all companies. I have no contract, pay $100 a month for two phones between my wife & I, unlimited text, plenty of voice, and unlimited data on one phone where this seems like a "bargain" (the rest of the developed world laughs at what I consider a good rate).
.. watch Sprint disappear (as their coverage contract with Verizon "mysteriously" disappears and their coverage would suck worse than TMobile again) and rates suck ass across the board. The ability to enter the wireless market would continue to entertain higher barriers, so this would be difficult to overcome.
What I enjoy for "landline" service (Ooma VOIP "free" $5 a year to cover taxes), the rest of the world enjoys a similar experience for wireless. TMobile seems like the black horse right now, and I rather see them follow through on a merger with Sprint than AT&T, mainly to bring back the third competitor in the pack similar to what was enjoyed in the late 80's/early 90's between MCI, AT&T, and Sprint. That set the bar for me personally where 3 competitors in telecom was a minimum number necessary for what I considered a truly competitive balance where they made their money and I felt I got value for my money. This is necessarily in the telecom space in my humble opinion with how things are looking. If a Verizon and AT&T duopoply were to happen
Once the business friendly Republicans win more elections, all of this will be reversed. AT&T needs to start bribing / donating some big bucks in that direction to make it happen.
And it took them how long to figure this out? Most of us knew it in the first 5 minutes.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
T-mobile is probably going to file for bakruptcy in the next year.
And so the T-Mobile girl lives to strut another day.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
The reason why allowing att to buy tmobile is "epically, boneheadedly bad for the public interest" is as follows:
The FCC licensed both tmobiles and atts GSM spectrum as exclusive licenses.
This means that if you want to use a gsm technology device on internaltionally standardized frequencies in the us, you either use att, or tmobile. (Or one of their downstream sublicensed local carriers.)
Allowing tmobile and att to merge (given the lopsided nature of such a process though, "buyout" seems more applicable..) would create a single, exclusively licensed "super carrier" that owns the whole standard gsm band, creating a natural monopoly. Historically, natural monopolies have never been in the public's best interest. (See standard oil, bell telephone, etc.)
Add to that the leaked inside documents showing that the cost of aquisition of tmobile exceeds by a large sum the estimated costs of builing out comparable capacity on att's existing network infrastructure, and also the fact that once att owns tmobile's spectrum license, it can choose to revoke any downstream sublicensing agreements with local gsm carriers that are currently contracted with tmobile.
The potential for upheval in the already low-diversity market for gsm carriers, the potential for massive job destruction from having licenses pulled, and the omnipresent risk of abusive monopoly pricing with no free market alternative (CDMA is not a valid alternative if you require international operation) is simply and demonstrably unacceptable.
The same FCC chair that wants to relax media consolidation rules yet again? With the chairman being the very person that profited by the "Rupert Murdoch" fiasco that led to Fox and Vivendi?
"He was Chief of Business Operations and a member of Barry Diller's Office of the Chairperson at IAC/InterActiveCorp and executive responsible for the creation of Fox Broadcasting Company and USA Broadcasting. He earned at least $USD2.5 million when Vivendi acquired Universal assets in 2003.[10]"
http://en.wikipedia.org/wiki/Julius_Genachowski
I wonder which way this will go *smirk*
"If any question why we died, Tell them because our fathers lied."
When I joined the GSM provider they couldn't afford hot chicks and this Parrot was their spokesman - some number of acquisitions before everything turned Magenta. For as long as I can remember, they've been 'the last' phone company - nth of n players, 6th of 6 major players, 4th of 4 major players, etc. but the exact same reason AT+T wants to buy them is the reason I don't want them to be bought. T-Mo has spectrum - which with fewer customers means bandwidth. Sure, AT+T could build it out for a fraction of the price of buying T-Mo, but buying T-Mo is 'expedient' and then all their bandwidth hungry devices get to use T-Mo's spectrum - sucks for the T-Mo customer. And as long as they're T-Mo, they have to work to get and keep customers, being the LAST phone company and all. When is the last time you heard about winning AT+T Customer Service? not since started a credit card.
This CDMA vs GSM debate is totally off topic. WRT the merger question, the FCC is totally right. Like AT&T want to do, Rogers did acquire FIDO because this pesky little competitor in the GSM space (Bell and Telus have CDMA networks) dared come out with a very competitive "unlimited" plan (CityFido for those that remember). Friends of mine that were lawyers in this field were shocked that the CRTC allowed this merger to happen. At very least, they thought the CRTC would have used their regulatory authority to impose some undertakings, for example, you must grandfather not only CityFido subscribers, but continue to offer this plan for X number of years. They didn't and the first thing that Rogers did was essentially eliminate the CityFido plans as they had existed.
Now Canada has among the lowest rates of smartphone/cellphone usage and subcriber base in the world and surprise, among the highest smartphone/cellphone pricing in the world. Just google it and you will see. A survey I saw not long ago put Canada around Peru for cellphone subscription rates. What an embarassment.
It was a huge battle to bring in a competitor (Wind Mobile) because of the narrow interpretation of the legislation the CRTC used to the benefit of the incumbents. The Canadian market desperately needed new competitors to shake up the market because the incumbents were clearly operating as oligopolists and the regulator was letting it happen unabashed. It took an act of Cabinet to overrule the regulator and though rates have dropped 30% overnight, Wind is not having an easy go at it. The Egyptian financial backer actually regrets jumping into the market. Just google Wind Mobile in the news and you can see for yourself.
In this case, Canada is not living up to that mythical socialist ideal that so many Americans think we are. In the wireless space we are where the US incumbents want to be if they could buy off the politicians and the regulators. Less competition, more profits!!!! The Canadian wireless market is a textbook example of how certain industries NEED regulators to keep anticompetitive behaviour under control in order to encourage growth and advancement.
As a Canadian, I used to look longingly at the rapid pace of innovation and the menu of options you have in the US. Mega-mergers like this will take you along the path to where we are in Canada.
Good luck to you!
The FCC should have mandated GSM for the entire U.S. at the outset, as Europe and many other countries did. That would have ensured interoperability, and provided the opportunity for customers to have an actual competitive marketplace. Denial of this merger is going to continue to hobble the U.S. mobile marketplace, and simply leave two strong and one three so-so operators out of four. If the merger goes through, and Verizon subsequently picks off Sprint, then we would have two extremely strong competitors duking it out. Admittedly, Sprint needs T-Mobile more than AT&T does, but it really doesn't matter who wins T-Mo, as magenta will be going away regardless. Everyone has their own opinion on which carrier sucks balls the most, but in the end, the real measure is the technology they use. Sprint and later Verizon Wireless started out with a really innovative technology, then stripped out all that was good and innovative out of it. PCS had a chance to give GSM a run for its' money, but the fractured U.S. marketplace left behind after the breakup of Ma Bell, along with the lack of a unified national communications policy, disincentivized companies from investing in PCS, all while Europe continued to cement their centralized market together and develop multi-national unified policies on many fronts, including telecommunications, resulting in GSM. This is one specific example of why the AT&T consent agreement was ill-timed and poorly thought out.
Nothing to see here but us trolls...move along...
...the T-Mobile store is right next to a sex shop.
The giant posters of the T-Mobile girl (her name is Carly Foulkes, btw) make me want to go to the sex shop more than they make me want to buy a phone.
There's no -1 for "I don't get it."
I heard that T-Mobile wants to rid themselves of their US division. If it isn't making enough revenue to be kept on the books, it probably isn't doing well enough to stand on its own either. Which likely means it will just fold up completely.
Hence either T-Mobile is bought out by AT&T and we have one fewer carrier, or T-Mobile goes under and we have one fewer carrier. It seems like we might at least preserve a few jobs with option number one that would otherwise be lost with option number two. The other main carriers don't want to buy a GSM provider, it doesn't make technological sense. They just want a shot at picking off some T-Mobile customers that they might not otherwise get if AT&T buys them out.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
anti-competitive and not in the public interest
It's a fundamental nature of a merger to be anti-competitive, and it's very rarely can be in public interest. If those were sufficient conditions to prevent a merger, there would be no mergers in anything other than manufacturing and natural resources extraction, and few in those two areas.
Contrary to the popular belief, there indeed is no God.
My wife has a factory unlocked iPhone on T-Mobile. They are the only discount carrier with coverage nationwide, especially outside of metro areas (getting away from Verizon's dropped calls at our home was very welcome).
AT&T and Verizon either outright block, or charge not so discount rates, for iPhones on their prepaid branches. T-Mobile actively encourages them on prepaid talk / text / data plans that start at $50.
If this merger goes through, she might have to switch to a windows phone 7 device. At least she is free to sell it and switch at any time.
So you are too stupid to understand that free market economics cannot function without some government regulation?
Right there you pretty much lost the whole argument.
As long as companies are licensing public property or resources then the government has a right to regulate that sector
I like how you just automatically assume the government "owns" the whole radio spectrum to start with.
Companies can self-regulate within a spectrum too you know... After all, where is the governing worldwide body that dictated all countries use GSM? And yet that is what most countries ended up supporting.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Did you just suggest that T-Mobile, AT&T, Sprint or Verizon has a full national network?
.... P.S. - I know the U.S. is big... but when I drove from Oslo, through rural Sweden, through Rural Denmark, Rural Germany, Rural Luxembourg, Rural Belgium, and Rural France to Disney Paris 7 years ago, there wasn't a single point on that trip I didn't have good Internet access. I have also visited cabins in central Norway where the population density is approximately 1 person per 10km sq. and had no problem getting 3G and that was 3-4 years ago.
I just drove from New York City to Tampa Florida and back this summer. This is by far the most densely populated part of the country... straight down I95... I had a GSM phone with a T-Mobile card, another GSM phone with my Norwegian card (which bounces from network to network) and I had a Sprint phone which I bought a while back... between the three of them, I managed to have slightly better than despicable coverage while driving. Oh... I also had a T-Mobile 4G wireless modem.
For nearly 50% of the trip, I had no Internet access. For about 80% of the trip, I couldn't get anything better than edge. For about 20% of the trip, voice was not available. For another 20% of the trip, the call quality was so shitty that there wasn't even any point of calling. In the many of the gigantic malls we stopped in (for food and air conditioning... it was July and my family is Norwegian... HOT!!!) we'd run around begging for wifi access from stores because 2G, 3G and 4G wouldn't work in the malls. Hell, I thought it was hilarious that the Best Buy where I bought the 4G modem didn't even have 4G access... or 3G... or 2G... or even respectable voice. Then later at a different mall, I stopped into a Radio Shack to get a T-Mobile refill card and I couldn't even use it until I drove 20 miles because I couldn't get internet access anywhere near there. Can you say Microcell?!?!?!
Anyway, if the FCC gave a shit, they would not only let this happen, but they would also require that the PCS network was gradually replaced with a GSM network and that AT&T and Sprint should have to share access to their networks with each other so that the consumer would benefit. The FCC would then on top of that start providing funding to either of those companies or to smaller startups to build out the GSM network so that maybe one day, the U.S. might have better mobile phone service than most third world countries.
The regulators knew that even faster than you did. (Like immediately?) The problem is that is going to be challenged in court so that they have to maintain the pretext of thinking this through. Imagine if you were on the jury and the ATT lawyer states that the FCC came out with the challenge without thinking it through. Also, the FCC had to spend some time gathering supporting evidence for their claim. Evidence that will stand up to scrutiny in court.
I certainly make more than enough money through hard work and study to be a republican. I however live in a country with a far higher standard of living than the U.S. and the government is a socialist one.
As for idiots who got a Ph.D. in "classical literature" and are pissed that they can never pay the loans off, I'm right there with you. Same goes for law school grads who became lawyers for the money and find themselves asking paper or plastic.
I am certainly not a liberal... I am definitely not a conservative. I see problems that need to be solved on a government scale and I either say so while complaining or offer solutions. I believe the biggest problem with America are people who blame others for the fuck ups. Since when did being American mean "screw everyone else, as long as I don't have to pay for it, it's not my problem!". A true capitalist would realize that paying to increase the quality of life for those in worse shape with the money in their left pocket, their right pocket would get a hell of a lot heavier with gold. Instead, you'd rather be nickel and dimed to death by sticking band aids everywhere instead of just fixing the problem. Why not, instead of bitching "get a job" try to teach someone how? And yes... I have done that... At least three times in 2011 alone. I have also helped people get on their feet so they can better contribute to society.... And so far it has worked. That is true capitalism.
So what is next for T-mobile.
I can think on one outcome that is worse.
That is the loss of T-mobile...
The loss of T-mobile would be just as "anti-competitive" but
the stock holders of T-mobile would get nothing.
Truth is stranger than fiction, but it is because Fiction is obliged to stick to possibilities; Truth isn't. Mark Twain.