T-Mobile Filing Means Fewer Choices, Higher Prices

Wayne Rash
The license transfer filing by AT&T and Deutsche Telekom that would allow the purchase of T-Mobile USA was filed with the Federal Communications Commission (FCC) immediately before official Washington went home for the Easter holiday. This is a fairly typical process here in Washington. You'll remember that the FCC announced its net neutrality rules right before New Year's, when everyone would be gone.

The idea here is that if you announce things right before everyone leaves town, it'll miss the news cycle. And as you probably know, things that miss the news cycle in Washington never actually happen. It's a great game they play here.

Unfortunately, it doesn't always work. Some of us, me included, are kept chained to our computers by heartless editors, and thus are never allowed to actually have holidays. The result of this is that we get those stories that companies like AT&T hope we'll miss. So when I heard about the news, I wrote about it here and spoiled AT&T's little surprise.

The cynical content of AT&T's filing is hardly a surprise, though. The telecom giant promises that T-Mobile customers will get to keep their low rates and their existing phones. What they don't promise is that those customers will keep their ultra-fast 4G network access (AT&T has already announced that it's decommissioning the T-Mobile 4G network to build its own, incompatible, 4G network). In other words, AT&T is hoping that T-Mobile customers and the FCC don't notice how bad this deal is for T-Mobile customers.

The reason AT&T doesn't want T-Mobile customers to know about this is because it wants smooth sailing through the license hearings. Unfortunately, it's not going to get that, since Sprint Nextel has already announced its strong opposition. You can bet that Sprint will be shouting from every rooftop, and will be doing what it can to stir up other opposition.

The fact is that this proposed buyout is bad for everyone who uses mobile devices because it reduces choices. Despite AT&T's claims that dividing up the mobile world into two companies doesn't create a duopoly, the fact is that AT&T's history shows just the opposite. Until the company was forced to break up, it kept prices high, stifled innovation and kept other companies out of the market.

Even if your business isn't an AT&T customer, and even if you're not using T-Mobile, the same will happen to you. The bottom line is that less competition means fewer choices and that means less innovation and higher prices. While there will still be three major wireless companies left after the merger happens, how long do you think Sprint will last before it gets trampled into oblivion?

In a few years you'll have a choice of two players with high prices and little competition. If this is allowed to happen, you can say goodbye to the innovation in wireless communication that your business needs.

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Apr 25, 2011 8:04 PM Bill Bill  says:
As a T-Mobile customer I am very shaken by this merger . I have a non contract , unlimited everything rate . AT&T doesn't offer anything like that . I want to buy a new phone but am in a position to where I feel held hostage by AT&T . Funny I just read that T-Mobile is getting the iPhone . Isn't it iPhone usage that is causing AT&T's network problems ? So when AT&T/TMO 's combined network is still slow and dropping calls what next ? Does at that point AT&T just buy Sprint ? Does the FCC even show teeth even at that point ? I'm stunned that this merger would go through yet from what I read it seems a given . Reply

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