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Why Feds Are Right to Block AT&T, T-Mobile Merger
By Ryan Singel / wired.com
Sep 4, 2011

 

  • Higher Prices – With market power comes the ability to raise prices and do so in unspoken collusion with the other big players. For an example of that, you need only look at AT&T’s recent elimination of its $10 for 1000 texts per month plan, which left users with the choice of paying 30 cents a text or paying $20 for unlimited texts – a crappy choice given that the average user sends about 700 texts a month.
  • Fewer cool handsets available on other carriers – Once AT&T got even bigger, the company would have even more power to strongarm device makers like HTC to not sell its best devices to other carriers.
  • More power over regional and small carriers – AT&T is already notorious for playing unfair with roaming agreements with smaller carriers, and for charging exorbitant rates for the backhaul lines that connect cell towers to the greater internet. With greater market share, the power to squeeze companies like Cincinatti Bell Wireless in quiet, behind-the-scenes ways will only get bigger.

Sadly, some of the nation’s biggest tech players rallied to AT&T’s defense. Facebook, Yahoo, and Microsoft, among others, filed a petition in support of the merger, buying into AT&T’s threat not to build out a nationwide 4G network unless it got to buy T-Mobile.

In their letter (.pdf), the tech giants wrote:

AT&T has indicated that it will migrate the T-Mobile network to LTE technology and offer LTE-based wireless broadband to 97.3 percent of the U.S. population. AT&T has stated that its LTE deployment will bring significant benefits to residents of rural areas and smaller communities, where the benefits of real-time video and similar capabilities are most urgently needed to fill gaps in physical infrastructure for healthcare,
education, and other social needs. [...]

The FCC must seriously weigh the benefits of this merger and approve it. Such action will help to meet the near term wireless broadband needs of consumers and ensure that we are globally competitive as the world increasingly embraces wireless broadband connectivity.

It’s nice of these companies to pay lip-service to the needs of education, but the real reason they sided with AT&T is simple near-term economics for those companies. The more people use 4G, the more their products will be used and the more money they will make, regardless of the cost to American’s monthly bank balances...

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Why Feds Are Right to Block AT&T, T-Mobile Merger