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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.
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.
Alltel had about 800,000 customers.
T-Mobil has 33,000,000.
Not really on the same scale there.
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.
The FCC's input in this is important, since its approval is required by law.
The odds of the merger happening have dropped dramatically, though I think they were less than even before this.
You can never go home again... but I guess you can shop there.
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 merger would most certainly require FCC approval, and would not be able to be completed without it.
You're right that the FCC's input to the SEC is unimportant, because the FCC does not need to explain itself. It can simply say "no" and that would be that.
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!
you have to rent your home phone?
And the major cell carriers have continued that business model by getting most people to rent their cell phones. It's not like my cell phone bill is reduced after my 2 year contract term is up and my phone subsidy is supposedly paid off.
Except on T-Mobile where on their value plans, you actually do save money when the phone is paid off.
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.
Have you seen the current Republican field? I wouldn't hold your breath, though the major cell carriers certainly should.
Try not to take me more seriously than I take myself.
Alltel wasn't "regional". Rural would be more accurate. Can't really call something that was licensed in states from OR to CT "regional". While they only had 800,000 customers they also were the number one CDMA roaming partner for the carriers. I don't know for sure but I think they may have made more off their roaming agreements than their customer base. That was a major reason that VZW bought them.
Sprint buying T-Mobile would earn Sprint the title as dumbest company ever. Their networks aren't compatible. It would be Sprint Nextel all over again.
Ascii artist &
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.