Obama Steps In And Blocks The AT&T/T-Mobile Merger

Just as predicted by many, the Obama administration has filed a block against the AT&T and T-Mobile merger due to anti-competitive concerns. Sprint and Verizon (although Sprint has been more vocal) are concerned with the possibility that the merger could squeeze them out and allow AT&T to charge higher prices without any repercussions. While this may not make a huge difference with Verizon, it would sure impact Sprint.

The purpose of the merger was to help AT&T increase its network capacity while meeting the higher demands for high-speed Internet services. All of the wireless providers have been faced with heavy demands in data in the last few years due in part to new smartphones that were essentially started by Apple—at least in the sense of productivity through the advent of the App store. After the iPhone came out, AT&T once claimed that network activity increased over 300% and later admitted that their network was not entirely ready to support such increases.

This new era in smartphones prompted every carrier to increase their cell capacity and push toward new 4G networks. Verizon and Sprint led the forefront on this while AT&T keeps saying their 4G network is just around the corner. All the while, smartphone usage had been increasing and AT&T has a bad wrap to shake.

Even though the block has been filed, the FCC has not commented on the case and no decisions have been made. With that said, the merger might still be a possibility, but there will not doubt be some heavy restrictions and monitoring to ensure safe and fair business practices are being conducted.

My two cents

Personally, I’ve been with AT&T for so many years (and name changes), I don’t even know where to begin explaining just how I feel about this. On one hand, it might be nice to increase network capacity and possibly even better our service quality. It would also be nice to have a real 4G network so Apple can start making 4G phones. However, if getting these things means that AT&T could slap more and more restrictions on our services while also raising prices, then I’m not for it.

If this merger happened, it might be harder to switch to another company such as Sprint because at some point, the could potentially go out of business or be absorbed by AT&T too! AT&T has a long history of being a monopoly and the government has stepped in to break them apart at least once before. In fact, Verizon (formally GTE) is actually part of the original AT&T breakup.

All I can say at this point is that as long as service gets better and prices don’t go up, then I’m all for a merger. If not, then forget it.

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.