Rubber Stamp Unlikely for AT&T-Mobile

March 24, 2011 at 7:17 am PT

The Federal Communications Commission hasn’t yet begun to evaluate AT&T’s proposed acquisition of T-Mobile USA, but according to officials, regulatory approval of the $39 billion deal is anything but a sure thing. “There’s no way the chairman’s office rubber-stamps this transaction,” an FCC official told The Wall Street Journal. “It will be a steep climb to say the least.”

Obviously. Though it’s interesting to hear an FCC official say that on the record. During an appearance at CTIA earlier this week, FCC Chair Julius Genachowski declined comment on the deal, which is burdened by all sorts of competitive concerns.

AT&T, which has been spinning the acquisition as a boon for Americans and their country, says it’s confident it will win approval. “We understand that Congress, the DOJ, the FCC, as well as wireless consumers will have questions about the transaction. We look forward to answering and addressing those questions,” said a company spokesman. “We are confident that the facts will demonstrate that the deal is in the public interest and that competition will continue to flourish.”

I hope so. AT&T stands to lose $3 billion if the deal falls through.

Tagged with: American Antitrust Institute, antitrust, AT&T-T-Mobile, CTIA 2011, digital, Digital Daily, financial, John Paczkowski, merger, Public Knowledge, T-Mobile, T-Mobile USA, T-Mobile-AT&T, Terminator, wireless

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https://me.yahoo.com/a/.xP1KpA00euM4B3FhNerE0th3GZP5t4-#0a5b3 Flash Sheridan

Wouldn’t AT&T giving T-Mobile $3G be a lot better for competition in the GSM market?
http://profiles.google.com/pangasamaneesh Maneesh Pangasa

Hope this deal fails we need more competition and more consumer choices in wireless market not less.
Anonymous

What does that even mean? Deutsche Telekom is going to sell T-Mobile, if not to AT&T then probably to Sprint (which will be messier), so there is going to be consolidation no matter what.

Want more competition? Get the FCC and Congress to pass regulation that decouple handset sales from wireless contracts, de-emphasizing two-year agreements and eliminating early termination fees so that consumers have much lower churn friction. Mandate cellular tower sharing. Simplify billing, perhaps eliminating USF, and reduce the number of miscellaneous fees that wireless vendors are allowed to charge.

The real problems in the US wireless service market are structural.
KenG

That’s $3B AND spectrum. and yes, it would be much better for competition, as in much, much better. Just don’t count on it happening. ATT will spend hundreds of millions of dollars on lobbying for this is they have to, because it will still be cheaper than paying off DT.
KenG

On your first point, combining Sprint with T-Mo will make the two lowest cost providers stronger. If ATT gets T-Mo, they will have eliminated the least expensive and most innovative competitior.

Bing on your second point. The landline industry had to unbundle service and equipment in the 1980s, and the wireless industry should be forced to also. Since they don’t charge any less for service when you provide your own phone, they are effectively forcing you into a higher priced service.
KenG

That should have been “Bingo”, not “Bing”. No plugs for MS here.
Anonymous

«On your first point, combining Sprint with T-Mo will make the two lowest cost providers stronger. If ATT gets T-Mo, they will have eliminated the least expensive and most innovative competitior.»

Combining Sprint with T-Mobile would have been a mess. They use incompatible technologies, and would therefore not have been able to see synergies for several years – possibly in some 4G timeframe, except that T-Mobile was committed to LTE while Sprint picked WiMax, so it might have to wait until FIFTH generation wireless tech, or involve numerous handset replacements, either at a loss or at a cost of customer dissatisfaction.

I also don’t get this sudden internet refrain of T-Mobile being an “innovative competitor.” I’ve had T-Mobile for the past eight years; they’re not innovative, they’re CHEAP and have good customer service. Period. They were the last of the big four wireless networks to roll out 3G, and when they did they picked a frequency pairing unused by pretty much any other GSM operator in the world, creating challenges using world phones to access 3G data on their network and vice versa.

Sure, they rolled out AWS/@Home, but that was an attempt to decongest their network (thanks to a slow build out) by offloading voice calls onto YOUR cable/DSL connection, which YOU pay for. That is, you’re paying them for access at that moment, but rather than furnishing it they push it off onto another network you pay for and give you a $35 router to connect your home network to your phone. And charge you $10 a month for the privilege.

What is this great cellular innovation that T-Mobile has been doing? Please share.
KenG

Yes, I think combining Sprint and T-Mo would be a mistake, but it would be
better for consumers than the ATT deal.

T-Mobile is the only carrier offering service with unsubsidized phones,
which means you don’t have to keep paying for the phone after you have
covered the subsidy. T-Mobile was the first carrier to take a chance on
Android. T-Mobile lets customers use any phone that is compatible with
their network. T-Mobile sells phones without carrier crapware on it. They
delivered HSPA+ first, which will probably prove to be as fast as the other
carriers 4G. They have the most flexible plans, and have reasonable data
usage policies. ATT would eliminate all of that, and those reasons, plus
the fact T-Mo is far cheaper than ATT (My 5 phones, 3 of which were smart
phones, on T-Mo had about the same monthly bill as my wife’s single iphone
on ATT).

Yes, T-Mo picked the wrong frequency, but it’s ironic that ATT allegedly
wants to buy them for that spectrum.

Their customer service is far superior to ATT.

They are nowhere near perfect, but without them, ATT will have even less
reason to treat customers fairly, especially those who need GSM phones.
Anonymous

None of these benefits of T-Mobile would have survived in a merger with Sprint. Further, none of these benefits of T-Mobile were helping it add subscribers as fast as the market was growing. Yes, it was still a profitable concern, but not enough to keep its corporate parent from deciding to withdraw from the US market entirely.

I suppose all of those do add up to a significant amount of innovation; perhaps my frequent travels to other GSM markets blinded me to their comparative paucity in the local market (and I’ve never looked at AT&T’s practices, as I found Cingular to be an unpalatable option before the acquisition and carried the notion over).

There’s no way out of it: everything we like about T-Mobile was under threat from the moment DT put it up for sale. It was virtually guaranteed that any buyer, no matter which of the other providers it was, would cull these features. Can’t have a subsidiary looking better than the parent, after all!

Ultimately, we agree. We need better competition in the market, and I think the best way to do that is via regulatory reform. It’s not enough to ensure an oligopoly that is dominated by Ma Bell spawn.

Rubber Stamp Unlikely for AT&T-Mobile

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