AT&T and T-Mobile Merger Comes With Conditions – More Regulation

Although the merger has practically been approved, AT&T might be facing more regulation and monitoring by the FCC in order to maintain a competitive cell phone market. As it stands now, if AT&T and T-Mobile merge, there will effectively be two cellular powerhouses (AT&T and Verizon) and one underdog (Sprint) left on the playing field. The FCC is concerned that this merger will reduce competition that could cause AT&T and Verizon to have no repercussions should they wish to increase their prices.

Although Sprint may be a worthy competitor now, what would happen when T-Mobile is absorbed by AT&T? It’s clear that AT&T’s only true competition is Verizon and by taking over all of T-Mobile’s customers, they are likely to get larger than Verizon. The two of them together could create an unstoppable duopoly forcing the majority of cell phone users to have less choice in their carrier as well as subjecting them to potentially higher prices.

The FCC aims to prevent this from happening. They have warned AT&T that close monitoring will be in effect after the merger and that regulations may follow. At this time, AT&T has already been actively selling off certain assets to reduce their market power in anticipation of a merger. One aspect of the merger might force AT&T to sell some of its cellular spectrum to Sprint to help maintain it’s competitive advantage.

Years ago when Verizon was merging with MCI, the FCC stepped in and forced them to lease fiber optic lines to business customers in major metropolitan areas such as New York, Chicago and Los Angeles. However, due to the size and nature of the AT&T/T-Mobile merger, more regulations are expected to be put in place and it may take much longer for AT&T to abide by the new rules.

My two cents

I never liked T-Mobile personally. I don’t know what it is, but it always seemed like the red-headed step-child in the Cellular world. Maybe it’s because you expect great phone service from companies that have been around for a hundred years or more and T-Mobile ended up looking like a higher-class Boost Mobile. I don’t even know what any of this has to do with anything, but the point it, I don’t mind that AT&T will soon take them over. My concern is with the power struggle that will come from it.

AT&T has been broken up many times before due to becoming too large of a company and maintaining various monopolies over customers. In fact, that’s how Verizon even exists today. I just don’t want to see something like this causing prices to rise while service quality and customer support falls.

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