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Why the AT&T and T-Mobile Merger Is Bad For Consumers 367

Posted by Soulskill
from the abuse-of-the-letter-t dept.
adeelarshad82 writes "AT&T recently announced that it will buy T-Mobile for $39 billion. If the transaction gets approved by the government and closes in a year as planned, it will create the nation's largest wireless carrier by far. While this is great news for both companies, analysts believe that it's an awful idea for end consumers for a number of different reasons — from obvious ones, like a rise in rates due to lower competition, to subtler ones, like more selective phone choices for consumers."
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Why the AT&T and T-Mobile Merger Is Bad For Consumers

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  • The FCC has been approving way too many mergers lately. Sirius and XM (okay). Comcast and NBC (bad). ATT and T-mobile should be negated.

    • Re: (Score:3, Informative)

      by C_amiga_fan (1960858)

      P.S.

      "AT&T's 700 Mhz spectrum" came from the selloff of TV channels 52 through 69. ATT, Verizon, and the FCC are pushing to selloff channels 25 and up, too, effectively killing free television (there would be one-half as many stations).

      • Re:Reject (Score:5, Informative)

        by VGPowerlord (621254) on Monday March 21, 2011 @04:13PM (#35564870)

        "AT&T's 700 Mhz spectrum" came from the selloff of TV channels 52 through 69. ATT, Verizon, and the FCC are pushing to selloff channels 25 and up, too, effectively killing free television (there would be one-half as many stations).

        This would be one of the reasons why the DTV transition [wikipedia.org] is happening world-wide, so governments can reassign the spectrum for other uses.

        In the US [wikipedia.org], low power stations are still allowed to transmit, but they know they are on borrowed time, as the international date to end analog television signals is June 17, 2015.

    • Re:Reject (Score:5, Informative)

      by dgatwood (11270) on Monday March 21, 2011 @02:57PM (#35563686) Journal

      It's ultimately not the FCC, but rather, the DOJ that would have to step in and stop it. So write them [justice.gov].

    • Its a done deal (Score:5, Interesting)

      by Fujisawa Sensei (207127) on Monday March 21, 2011 @02:57PM (#35563694) Journal

      They haven't denied any of the other mergers that became the current AT&T.

      They didn't deny SBC when they wanted to offer long distance service either.

      They're not going to deny this either.

      I'm rather surprised they didn't buy Comcast.

      But of course, they might try it even before this deal completes.

      • I'm rather surprised they didn't buy Comcast.

        That'd be silly, considering AT&T Created the Comcast we know today [usatoday.com] by selling them AT&T Broadband in 2001. What kind of business would buy back a business they'd already spun off [pcworld.com]...

        oh.

  • Time for DISH and DIRECTV to join the fun?

    The one good thing that may come from that is the room for all HD channels with ALL THE EAST / WEST FEEDS.

    • by Obfuscant (592200)
      As I recall, Charlie Ergen has been hot for DirectTV for a very long time, and has already tried to buy them out. The FCC stopped it back in 2002.
  • $39 BILLION!? (Score:5, Insightful)

    by MrEricSir (398214) on Monday March 21, 2011 @02:51PM (#35563596) Homepage

    Where was that $39 billion when it came to putting up and maintaining signal towers? Where was that $39 billion when it came to customer service? Where was that $39 billion when it came to the outlandishly expensive service?

    All this money, and what does AT&T do with it? It's like a slap in the face for their own customers.

    • Where was that $39 billion when it came to putting up and maintaining signal towers? Where was that $39 billion when it came to customer service? Where was that $39 billion when it came to the outlandishly expensive service?

      All this money, and what does AT&T do with it? It's like a slap in the face for their own customers.

      Though I agree, I can't help but think about this one detail: Wouldn't they suddenly have all of TMobile's already-installed hardware?

      • Re:$39 BILLION!? (Score:4, Insightful)

        by dgatwood (11270) on Monday March 21, 2011 @03:00PM (#35563734) Journal

        They will suddenly have to maintain all of T-Mobile's hardware, but it won't do them that much good. AT&T's 3G and T-Mobile's 3G use different bands, and the vast majority of phones don't have the hardware to support both. At best, they could offload a little bit of 2G voice and EDGE traffic.

        • No, the phones have the hardware to support both. It's a radio chip running different firmware.
          • by Microlith (54737)

            If that were true then they could just issue a firmware update to support different frequencies in different regions and carriers, yet this never happens even on handsets not sold via a carrier.

            YAY FIVE MINUTE DELAY, GO SLASHDOT!

          • Re: (Score:3, Informative)

            by dgatwood (11270)

            Phones have antennas that are tuned to specific frequency ranges. It's not as easy as a firmware flash.

        • by pnutjam (523990)
          that's cute, you think they will support t-mobile's handsets...
      • Re:$39 BILLION!? (Score:4, Informative)

        by Andy Dodd (701) <atd7&cornell,edu> on Monday March 21, 2011 @03:24PM (#35564076) Homepage

        That's why a bunch of people think this merger happened. Supposedly it's about a 5-year process to get a new cell site approved by the FCC. (e.g. it's not about money, it's about paperwork delay).

        The problem is: T-Mobile's 3G sites are all in the 1700 MHz band. No AT&T handset supports UMTS1700 to my knowledge, so AT&T phones won't be able to use the new tower assets for 3G. A cell site approval from the FCC is not based just on siting - it's licensed for a specific frequency and power level. So the T-Mo tower assets can't just be switched over to a different band.

        There is a *slight* possibility it may be easier for AT&T to get an STA to change a tower to a new band than to build a new site though.

        As to the negative effect this will have on equipment manufacturers (handset and network infrastructure) - Anyone claiming this will have a significant negative impact on those people is forgetting that there are more countries on this planet than the United States.

        In terms of handsets - AT&T has already been in a situation of using bands not supported by any other carrier anywhere else in the world. Any phones for them had to be specially customized for them. Now, quad-band GSM has been common for a long time, but I have yet to see a UMTS handset that supported both the world frequencies and all of the US frequencies. T-Mobile was slightly fortunate in that unlike UMTS1900/UMTS850, some other countries did use UMTS1700. As a result, manufacturers could target more markets with a handset that supported UMTS1700/2100 than one that supported UMTS2100+the AT&T bands.

        For network equipment providers - nothing changes. Previously you had equipment for AT&T and equipment for the rest of the world, this doesn't change. AT&T is still at a disadvantage of lacking the economies of scale the rest of the world can take advantage of.

    • Re:$39 BILLION!? (Score:4, Insightful)

      by Dyinobal (1427207) on Monday March 21, 2011 @02:56PM (#35563676)
      Those wonderful 39 billion don't generate cash when put into more towers, customer service or anything that other wise improves the service they are providing. Where as spending 39 billions to take over a competitor and gain a mess load of new customers does. In short they don't care about anything besides the $$$$$ which shouldn't surprise you, considering they are a corporation and are by nature soulless evil things.
      • Re:$39 BILLION!? (Score:5, Interesting)

        by dgatwood (11270) on Monday March 21, 2011 @03:06PM (#35563830) Journal

        Corporations aren't evil. They're amoral. There's a subtle difference.

        • Re:$39 BILLION!? (Score:5, Insightful)

          by characterZer0 (138196) on Monday March 21, 2011 @03:12PM (#35563914)

          The company is amoral. The management are evil.

        • You are right, it is the evil actions of amoral corporations that need to be stopped.
        • Re:$39 BILLION!? (Score:4, Insightful)

          by dkleinsc (563838) on Monday March 21, 2011 @03:19PM (#35564018) Homepage

          Or as the wonderful Canadian documentary The Corporation [thecorporation.com] pointed out, if a corporation is legally a person, then it is a sociopathic person. It's not that they're actively trying to do bad things, it's just that they don't care if they do evil, so long as it benefits them.

          • If you couldn't go to prison for crimes, wouldn't you do things a wee bit differently? ;-)
            • Re:$39 BILLION!? (Score:4, Interesting)

              by spun (1352) <`moc.oohay' `ta' `yranoituloverevol'> on Monday March 21, 2011 @04:14PM (#35564880) Journal

              If you couldn't go to prison for crimes, wouldn't you do things a wee bit differently? ;-)

              No. I wouldn't. I'm not a sociopath. I don't refrain from doing evil because of a fear of punishment. I refrain from doing evil because I have empathy, and because of that, hurting others hurts me directly. It may also harm me indirectly, as people who have been hurt often lash out irrationally, and people whose choices have been constrained often make choices that harm others, potentially including me. Enlightened self interest looks a lot like selflessness .

              • Re:$39 BILLION!? (Score:4, Interesting)

                by Daetrin (576516) on Monday March 21, 2011 @07:51PM (#35567152)

                If you couldn't go to prison for crimes, wouldn't you do things a wee bit differently? ;-)

                No. I wouldn't. I'm not a sociopath. I don't refrain from doing evil because of a fear of punishment. I refrain from doing evil because I have empathy, and because of that, hurting others hurts me directly.

                I don't do evil things to people that i consider good because of empathy.
                I don't do evil things to people that i consider evil but who honestly think they're doing good because of morality.
                I don't do evil things to clearly evil people (people who do evil and don't give a fuck as long as it benefits them in some way) because of the law, ie fear of punishment.

                If that means i'm not as civilized as i ought to be, oh well. Not that it makes a big difference practically speaking, since barring the collapse of civilization i'll behave the same in all circumstances anyways.

      • by blair1q (305137)

        You don't think that there would have been more iPhones sold if the data coverage had been more than a Starbucks in Chelsea?

    • by Anonymous Coward on Monday March 21, 2011 @03:03PM (#35563800)

      A loan from JP Morgan

      http://www.reddit.com/r/AskReddit/comments/g7vzu/why_the_hell_does_att_have_25_billion_in_cash/

    • by LWATCDR (28044)

      Don't forget that the caps they just put on DSL and their higher speed service. If this gets approved then we know that without a doubt that the Telco now own the government.

    • Where was that $39 billion when it came to putting up and maintaining signal towers? Where was that $39 billion when it came to customer service? Where was that $39 billion when it came to the outlandishly expensive service?

      All this money, and what does AT&T do with it? It's like a slap in the face for their own customers.

      Even though a lot of people like to pretend they are forced to do business with AT&T, they aren't. I live in a dead spot on their network, so I don't use them. It wasn't difficult.

    • Silly boy. It's cheaper and more effective to spend $100 million on an ad campaign telling people how much better coverage is than spending $1 billion to make it actually better.

    • by fermion (181285)
      Well, they now have all of T-Mobile towers. Putting up towers is not just a matter of money. There are all these people who want cell signal, but do not want towers. So what can a mobile company do? Buy existing towers.

      I do not care about the t-mobile thing because I never considered T-Mobile as a viable competitor. For the most part there are two main level competitors, ATT and Verizon. The choice depends on the service level and use. This will not be effected. Below these two was basically Sprin

    • by pnutjam (523990)
      It was sitting in the bank while the dollars rolled in...
      (outlandishly expensive service) + (Apple worshipers) = $$$$$$$$$$
    • by jaymz666 (34050)

      Since MOST of that $39 billion is in shares, I don't think you can use shares to pay for towers

  • by Fujisawa Sensei (207127) on Monday March 21, 2011 @02:52PM (#35563610) Journal

    It is certainly bad for customers.

    But its good for Verizon and others, because there are a lot of T-Mobile who are: "Anybody but AT&T".

    • Not nearly enough of them to make a difference, in my opinion.

      • We can hope, altho it's damning Verizon with faint praise. It becomes a GSM monopoly, further pushing Verizon out on an EDGE (pun intended) with LTE.

        The duopoly that results (sorry, Sprint and Clearwire are dying) means that we'll have the fun of the Canadians, who deal with the Rogers- Bell Canada Conundrum. Tweedle-dee and Tweedle-dum.

        What we really need is a technology to become the successor to GSM, CDMA, and LTE. Call it, 5G. We could bribe the ITU to lower the speed floor, and use visible light modula

  • I have an unlocked phone so that I can actually change my provider if I want to. If AT&T merges with T-Mobile then my phone is locked to AT&T since it requires a sim card to function and I'm pretty sure Sprint and Verizon won't play nice with my phone.
    • Even though your phone is unlocked there's not really all that much you can do with it. AT&T use frequencies that are different from pretty much every other provider in the world so if you're with them you're still locked in, if you're not you can't switch to them (without a new phone). The only other large supplier are T-Mobile who use more sane frequencies. This allows you to switch to other providers around the world, but that's not much use unless you travel. An unlocked phone in the states only rea

    • Wow...just...wow. That first image is like a microcosm of our country's changed views on the market place. Reminds me of a matching graph from Discrete Math II.

    • by blair1q (305137)

      It's not at all surprising that the former monopolists are the new monopolists. The inability to act in accordance with the spirit of the law is a mental disease.

  • What competition? (Score:5, Insightful)

    by 0racle (667029) on Monday March 21, 2011 @02:54PM (#35563628)
    There is no real competition in the US mobile market, only the illusion of competition.
    • All the more reason to fight for everything we possibly can.

    • Re:What competition? (Score:5, Informative)

      by royallthefourth (1564389) <royallthefourth@gmail.com> on Monday March 21, 2011 @03:04PM (#35563806)

      This is the nature of all markets: the big ones buy up the smaller ones until there are only one or two big ones left. Occasionally they collapse and are replaced by others, but the diversity never really expands.
      Deregulation and competition just doesn't work in the real world.

      • by dkleinsc (563838) on Monday March 21, 2011 @03:27PM (#35564108) Homepage

        You're overstating your case a bit.

        Some markets do lend themselves to consolidation like this. If you were a hypothetical omnipotent and benevolent Grand Pooh-bah of the cell phone market right now, you could cut costs of cell service significantly by reducing things to a single carrier, and then sell the service at cost. But instead, we have profit-driven corporations, who want to cut the costs but keep the prices at their current higher (and thus inefficient) price.

        Other markets don't consolidate as easily, which is why, say, plumbers aren't all working for a handful of big conglomerates.

    • by geniusj (140174)

      I know that moderators have a soft spot for cynical comments, but I disagree. I think there IS competition in the US mobile market. This merger, however, will be another big blow to it, as T-Mobile has recently been an innovator in the space. T-Mobile brought European-style contract-free plans to the US, encouraging the use of unlocked phones. It also was the most vocal and earliest adopter of Android.

      What the US mobile competition has shown me over the years is that consumers are not solely concerned w

  • The only thing I am hyped about is a faster transition to 4G. AT&T's network is crippled in major cities, with 4G and 3G network speeds should increase over time with the load being split across both spectrum's given people move to 4G. There are good things and bad things, I don't think AT&T will hike rates because they are still competing with other carriers just not GSM carriers in the US.
  • Verizon will start looking to gobble up Sprint. Please somebody who knows more about this sort of thing tell me why this can't happen, because that would be f'n horrible. As far as why THIS merger is bad for consumers, well yea is there even one reason why it's GOOD for consumers?
    • by PickyH3D (680158)

      I would think that Verizon might at least wait to purchase Sprint because Sprint is trying to make a-go with WiMAX rather than LTE for their 4G technology. I also don't think Sprint has much to offer Verizon in terms of gained voice/data coverage with respect to 2G and 3G.

      At least with respect to T-Mobile and AT&T, T-Mobile will bring a lot of infrastructure that AT&T wants (towers) because of the inherent weaknesses with GSM in populated areas. This should increase voice quality as well as help to

  • by blair1q (305137) on Monday March 21, 2011 @02:55PM (#35563642) Journal

    AT&T shareholders just watched their management pay way too much for T-mobile. T-mobile and AT&T employees are both now extremely fearful for their jobs, as there is almost 100% overlap in most markets in everything but customer service call centers. This goes all the way up the management chains.

    This is less like "joining forces" than conquering your neighbor by buying his mortgage from the bank for double the house's value, then throwing him and his kids and your wife out on the street.

  • I had AT&T years ago; could never get a signal inside my house. I finally switched to T-Mobile; no problem getting a signal inside my house.

    If I want GSM (so that my phone will work in the rest of the world when I travel (right?)) then I either have to have AT&T, T-Mobile, or one of the MVNOs that operate on their networks. I fear if AT&T dismantles the T-Mobile infrastructure that I'll be back to not getting any signal inside my house. Is my fear justified?

    • I don't think they are going to reduce their infrastructure... however, I refuse to be an AT&T customer, my contract is up next month, so may be moving over to Verizon. T-Mobile's customer service has always been a lot better than my experiences with AT&T.
  • Misleading story (Score:2, Insightful)

    by Anonymous Coward

    Anyone reading this story might think that AT&T had bought T-Mobile, rather than just one of their operating companies in a foreign country a long, long way from their home market.

  • A company practicing what amounts to price fixing pays the government to ignore the fact it will become even more of a monopoly is our top story tonight. This story and more at 11.

    • A company practicing what amounts to price fixing pays the government to ignore the fact it will become even more of a monopoly is our top story tonight. This story and more at 11.

      Monopoly... I do not think that word means what you think it means.

      • If company A and company B (and Company C, etc) produce the same product with the same quality for the same price, and any changes are mirrored immediately, as if they planned it out beforehand, they are de facto a price fixing consortium, a type of monopoly.

        • You are claiming that there are no practical difference between the four major carriers, and that they are engaged in illegal price fixing?

  • by saihung (19097) on Monday March 21, 2011 @03:02PM (#35563772)

    The USA is already a backwater for GSM service. I pay too much for AT&T, there is no competition on price or features, and now what little pathetic choice I have will be taken away. I don't want crappy proprietary technology, I want to be able to use real mobile phones that I can take with me anywhere in the world. Barring Japan and Korea, for some reason.

    • by Microlith (54737)

      If your handset works on HSPA+ (AT&T and T-Mobile's "4G") using the European bands, you can get full 3.5G service on both Softbank and NTT Docomo in Japan. I bet you can in Korea as well.

      Suffice it to say, the US is virtually alone in being the fractured mobile backwater, as even in those Asian countries you can get good service.

  • Let's see. You have four healthy players in a huge market. One buys out another to become the biggest. Now we have only three choices. Less choice leads to less competition. Less competition means they don't have to work as hard for our filthy lucre.

    Thanks, captain obvious, for this insight. Stuff like this should be so obvious it could be used on a "voting permit application test" if we ever wanted to truly root out the potential voters so brain dead that they can't be trusted with the franchise...

    • by blair1q (305137)

      I used to pass 7 different supermarkets on the way home from work.

      Now I pass 5 stores with only 2 names on them. And they both carry the same crap off the same boat from Chile.

    • How about asking why there are only four major carriers and why the smaller ones never get big?

      Everyone's griping about AT&T (which I do as well) but no one wants to focus on what the real problem is. AT&T's problems are due to not being able to get enough bandwidth and towers to support their customers. People gripe about this even with the other carriers. (Honestly in my area AT&T is much better than Verizon). Simultaneously most people want not just local coverage but national coverage.

    • by faedle (114018)

      "Healthy" players?

      Both Sprint and T-Mobile have been losing subscribers by the bucketloads (only last quarter did Sprint finally turn the corner). The balance sheets of both companies bleed red ink. Sprint's story is especially tragic: they completely bungled the NEXTEL merger, which should have guaranteed them "second place" status. Sprint's heavy investment in WiMAX (via Clear) may only be a long-term win IF the equipment they purchased can be rolled into an LTE deployment as easily as it has been clai

  • I'm a Tracfone customer (it's the cheapest option by far for a basic phone with texting), and my current SIM card is locked into T Mobile, which has horrendous coverage in this area (Rochester, NY). My last Tracphone was locked into AT&T, which had very slightly better coverage in NY. Even Verizon has very poor coverage in a very large portion of NY. The only good thing I can see coming out of this acquisition is if AT&T combines T-Mobile's coverage with their own and my Tracphone can use both ne
  • As one of the nation's largest union employers, this bodes well for those who support unions [bizjournals.com].

    This also bodes well for those in the seciton of the Venn diagram who both hate unions [redstate.com] and think that AT&T sucks [facebook.com]. They have a brand new outlet to scream about how lazy union workers are responsible for AT&T's sucky network and poor customer service and are going to ruin the T Mobile experience.
  • Led Zepplin (Score:5, Informative)

    by MickyTheIdiot (1032226) on Monday March 21, 2011 @03:09PM (#35563874) Homepage Journal

    Go to the T-Mobile forum if you want to know how well this is flying with T-Mobile customers. [t-mobile.com]

    The subject should give you an indication.

    I explicitly chose NOT to have anything to do with AT&T and now I am forced into it. Does that sound like free capitalism to you??

    • Re:Led Zepplin (Score:4, Insightful)

      by royallthefourth (1564389) <royallthefourth@gmail.com> on Monday March 21, 2011 @03:32PM (#35564174)

      Does that sound like free capitalism to you??

      Yes. Capital is free; you are not.

      Social relations are replaced by market relations so instead of each person having equal freedom intrinsic in his existence, money itself becomes a measure of the decisions a person is able to make. They've got billions of dollars and you probably have only a few thousand.
      This is the meaning of freedom created by the marketplace.

  • How do these acquisitions typically work? At any point, is there a chance for the public to register the concerns with the regulatory bodies?

    I signed up with T-Mobile at the end of last year when I bought a Nexus S. T-Mobile has been great and I love that I can tether my laptop to my phone (or create a wifi hotspot) without having to pay an extra fee. AT&T is notorious for not allowing this and for having ridiculously low caps and I'm worried that once AT&T takes over, I'm going to lose this capabil

  • by Dracos (107777) on Monday March 21, 2011 @03:22PM (#35564046)

    Because apparently AT&T wants to repurpose T-Mobile's 3G spectrum for 4G. Source: AP via Y! news [yahoo.com].

  • Let's see. Everyone yells at AT&T because they can't provide the coverage and bandwidth iPhone users need. AT&T tries to install more towers but ridiculous levels of regulation and red tape either limit their ability or make it take such a long time it's the same thing. AT&T sees a competitor with towers who is losing money and wants to sell. AT&T buys said competitor as the only way to provide the support customers demand.

    Customers immediately become furious with AT&T rather than the

  • I've had both AT&T and T-Mobile in the Washington DC area. T-Mobile had less areal coverage, but when your phone had minimal signal, it typically kept it and didn't drop your call. AT&T has more bars in more places, but using those bars to make a phone call is always a crap shoot - you can have what looks like a strong signal and get kicked off anyway, or be unable to connect at all.

    Much of this experience was before the iPhone - AT&T just got worse after that.

  • Even back when iPhones were the only real smartphone in town, I held off because I didn't ever want to to business with AT&T again. The reason I resisted the Apple siren song was because AT&T service sucks, and they have no respect whatsoever for customers.

    I was glad I had when the Nexus One came along, because I think it's better than an iPhone anyway, of course. I've also been very happy with T-Mobile's service. Now I see the Death Star approaching, and I know my happy little world is probably doomed.

  • by vijayiyer (728590) on Monday March 21, 2011 @03:55PM (#35564580)

    With this merger, we should finally have quality GSM coverage in the United States. I will bemoan the superior T-mobile customer service, but I had to switch from T-Mobile to AT&T when I lived on the Pacific coast for coverage. The fact is that there isn't really room in the US for two GSM carriers.
    For those who think AT&T could have just expanded its coverage, go look into the issues every carrier is facing in San Francisco where new towers face "OMG - the Radiation!" from the residents. Buying T-mobile was the best realistic way to expand coverage.

  • by mykos (1627575) on Monday March 21, 2011 @04:04PM (#35564718)
    You freeze it, break it to pieces, and over a small amount of time it melts and re-forms itself to continue the assault.
    Where's a vat of molten steel when you need it?

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