AT&T / T-Mobile Merger: Why I Think It’s Bad

Here’s the start of the ATT&T / T-Mobile merger hearings in the Senate Judiciary Committee

Here’s a (slightly biased, but accurate) summary of some of the points brought out today.

Here’s the webpage you can go tell the FCC what you think of the merger.  Please tell them, even if you disagree with me.  It’s one of the few ways we have of communicating with our government.

Now, why is this merger bad?

In spite of what many believe, there are only three carriers in the US.  AT&T and Verizon are the big dogs with T-mobile a looooong way behind them.  All of the other carriers lease important things from these guys (like bandwidth, roaming stations, etc.).  So, the reason the bills are so much higher on the small fry is because they are paying the big dogs to use big dog equipment for you.

Yep, if you are a Spring, Cellular South or one of the others customer, you are also an AT&T or Verizon or T-Mobile Customer.

If AT&T buys T-Mobile (and AT&T loses 6 billion in cash, even if the deal doesn’t go through), then we effectively have a duopoly.  Two companies that control the entire cellular phone industry in the US; AT&T and Verizon.

Why isn’t Verizon complaining about this?

Verizon doesn’t care because they are already in collusion with AT&T in the first place.  I mean, look at their service plans.  Some of them differ by less than $0.02 for the same service.  Also, if the merger happens, then Verizon doesn’t have to offer unlimited data anymore to attract AT&T customers.  You’ll have two choices with exactly the same plans and exactly the same prices (that will slowly increase).

All the small fry are freaking out.  They have to pay big money to an actual phone company or they don’t have service at all.  Talk about anti-competition.  All AT&T has to do is raise the rates of those leases and the small fry all disappear.

Some say that AT&T will still have to be competitive with Verizon. Of course AT&T doesn’t have to be competitive.  Until just recently, they had a monopoly on what is probably the most popular consumer device ever made (iPhone).  But without other companies doing other things (and Verizon doesn’t count), then we’ll be stuck with whatever AT&T decides to do… forever.  (See #1).

Look at the reviews for AT&T.  It already has the single worst record of customer service in the industry (according to Consumer Reports).  If you don’t have an iPhone, then your service probably sucks.  There are rumors that AT&T is reducing the data speeds for non-iPhone equipment in order to make sure the Apple people have the best possible experience.  Does anyone think that a merger with any company will improve AT&T in a meaningful way?

According to the information in the hearings, the merger will increase AT&Ts network coverage by 1%.  It will not increase rural coverage.  It will not improve the number of frequencies available to AT&T.

Think about this a second.  What do companies want to do… make money.  Innovation costs money that may not be paid back (anyone remember Sony PDAs?).  If you don’t have to innovate and you can raise prices without increasing service… what do you get?  More money.

Stockholders are happy.  CEOs are happy.  Bought politicians are happy.  Consumers get it sideways and manufacturers become pawns of the companies, reduced to little more than factories.

I predict that if AT&T is allowed to merge with T-Mobile that cellular service in the US will remain essentially as it is now until a major shift in technology happens that leaves all cell phones in the dust.

I predict that costs of service on all carriers will increase, fees on all carriers will multiply and increase in cost, quality of service on all carriers will decrease.

This entry was posted in Culture, Government, Prediction, Skepticism, Society, Technology and tagged , , , , , . Bookmark the permalink.

One Response to AT&T / T-Mobile Merger: Why I Think It’s Bad

  1. Pingback: AT&T “donated” to merger supporters « TealScientific

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