AT&T –T-mobile Merger

Last week the Department of justice filed a lawsuit against theAT&T and T-mobile merger.  The government’sposition is that if this merger goes through, it will be terrible for consumers, worse for competition and will eventually lead to a duopoly –when two companies dominate a single industry.   Incontradiction, AT&T argues the polar opposite.  In their regard, T-mobile is not a legitimatecompetitor; therefore gobbling up the financially burdened company wholesale can’t hurt competition or consumer choice. The merger will make AT&T stronger as a company and revolutionize the wireless industry of the United States. Their slogan for this ambitious campaign is 1+1=3—somehow magically reducing nationwide wireless companies will make everything better.


AT&T representatives claim that the T-mobile merger must go through because the wireless industry is going to face a “bandwidth tsunami”.  They say the only way for AT&T to developnext generation 4G network would be to combine, T-mobiles wireless spectrumtogether with theirs.  They claim thiswould give them huge improvement in coverage and give them 97% of America.  The go so far as saying that without thisvaluable spectrum, they will not be able to accomplish this greatchallenge.  The problem with this argumentis AT&T’s own documents, which they accidently submitted to thegovernment.  These papers show thatAT&T has plans to roll out a new 4G network without the T-mobile spectrum,and even hints to the fact that the T-mobile merger will not give bettercoverage to AT&T customers. 

In all of AT&T’s presentations, they do gloss over howmuch it will cost AT&T if th $39 billion merge does not go through.  Both companies have a multi-year roamingagreement, which will conclude next year and will cost AT&T $3 billion to  sign a new one. 
One of the biggest critics of the plan is Sprint.  Their problem with the merger is access.  Sprint and T-mobile are the only two nationalwireless carriers that do not operate physical wired network.  This means they must purchase fiber opticbackhauls from their two biggest competitors Verizon and AT&T.  Sprint’s fear is without T-mobile, AT&Tand Verizon can essentially jack up the price for these lines, putting them ata huge disadvantage.  This combined withthe fact that Sprint will be the smallest of the national carrier’s means thatthey can be easily muscled out of the market.

I hope that the merger is stopped at all costs.  Over the years I have been a customer at onepoint to: AT&T, T-mobile, Sprint and Verizon.  The worst cell phone company by far has been AT&T.  They have the worst coverage, atrociouscustomer service—that makes dealing with the DMV seem pleasant and relaxing,and the most confusing billing process I have ever seen.  I pray that the government does not allow AT&T to consolidate their power.  Keep in mindthis is the company that thought that the internet would never work, fax wasuseless and tried to sue to stop the car phone.