Republican senators push AT&T, T-Mobile merger

Two senators write letter pushing regulators to approve the buyout.

Republican senators Mike Lee (Utah) and John Cornyn (Texas) have written a letter to the Federal Communications Commission (FCC) and the Department of Justice (DoJ) urging them to approve AT&T's proposed buyout of T-Mobile. The proposed deal would be worth about $39 billion, and would consolidate 80 percent of all U.S. mobile users under just two carriers; the new combined AT&T/T-Mobile and Verizon Wireless.

Lawmakers and consumer groups alike have lashed out at the proposed merger, saying the decrease in competition will result in higher prices for customers. Proponents of the merger say it will enable AT&T to roll-out a next generation 4G network faster.

Both Senators Mike Lee and John Cornyn are two of three Republicans on the United States Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights.

Democratic Senator Herb Kohl (Wisconsin) acts as chairman of the subcommittee, and has previously urged the authorities to block the deal on the ground that it would be bad for consumers and would harm competition. Lee and Cornyn's letter urges the FCC and DoJ to focus on the possible benefits too before making a decision.

"The testimony and materials presented to the Antitrust Subcommittee highlight potential benefits to consumers that deserve meaningful attention," they said in their letter. Lawmakers can only serve to sway public opinion on the merger, whereas the FCC and DoJ have the power to approve it to block it outright.

Written by: James Delahunty @ 5 Aug 2011 13:24

ccwdude

"The proposed deal would be worth about $39 billion, and would consolidate 80 percent of all U.S. mobile users under just two carriers; the new combined AT&T/T-Mobile and Verizon Wireless"

What about Sprint? Why weren't they included as a carrier? Shouldn't it be 3 carriers, not 2?

5.8.2011 13:52 #1

plutonash

There talking about 4/5 of the mobile consumer population under the umbrella that is AT&T and Verizon. People don't think sprint brings more options to this possible duopoly than they should.

Hmmm, even if this doesn't get approved wont AT&T just pay so T-mobile no longer functions as a carrier? If so, they may as well take all their towers and spectrum. At least it'll all be put to good use.

"Cable thief is a victimless crime."

5.8.2011 14:20 #2

Morreale

I'm sure these two idiots have already been payed enough, but just think of how much more they'll get if the takeover is allowed... Considering how dumb the American government is, that's probably what the letters were about -_-

5.8.2011 16:18 #3

Dela

Originally posted by ccwdude: "The proposed deal would be worth about $39 billion, and would consolidate 80 percent of all U.S. mobile users under just two carriers; the new combined AT&T/T-Mobile and Verizon Wireless"

What about Sprint? Why weren't they included as a carrier? Shouldn't it be 3 carriers, not 2? Of course Sprint is a carrier, but the point is that just two carriers would have 80 percent of the market.

5.8.2011 18:31 #4

ROMaster2

Just let them go, the government shouldn't be tangled in the economy at all. The owners, the stockholders, of the companies have agreed to the merger and think it's a good business move. They know a whole lot more about business than you or the government, just let them.

If you complain about monopolies and higher prices, then change carriers. No one is FORCING you to use their service, so change or stop using it, but don't cry and whine because you want to force everyone else not to do what they want. And the prices are according to market demand. If you think the price is unfair then don't subscribe, that'll lower the prices (if enough people do it). However, if other people are WILLING to pay the price for the service, then the market value of their is worth more than you're willing to pay for, so they'll take the highest payers.

Stop f*cking with the economy already, we're going to hell as it is, and this isn't helping.

5.8.2011 18:44 #5

Dela

Originally posted by ROMaster2: Just let them go, the government shouldn't be tangled in the economy at all. The owners, the stockholders, of the companies have agreed to the merger and think it's a good business move. They know a whole lot more about business than you or the government, just let them.

If you complain about monopolies and higher prices, then change carriers. No one is FORCING you to use their service, so change or stop using it, but don't cry and whine because you want to force everyone else not to do what they want. And the prices are according to market demand. If you think the price is unfair then don't subscribe, that'll lower the prices (if enough people do it). However, if other people are WILLING to pay the price for the service, then the market value of their is worth more than you're willing to pay for, so they'll take the highest payers.

Stop f*cking with the economy already, we're going to hell as it is, and this isn't helping. Sorry man but things are just not that black and white at all. The reason Federal authorities are looking into the proposal is to protect competition in the market. If they find that the merger is of benefit to the market then they will give it the green light, but most analysts I've read think that's doubtful.

Some of the major concerns affect both consumers and corporate entities. For example, T-Mobile and AT&T use different 3G frequencies, and eventually, T-Mobile customers will have to buy a new phone _if_ the merger goes through. And the merged company will only honour the cellular plan they signed up to with T-Mobile if they buy a "similar phone," so that's another questionable requirement.

Also, think of all the companies that have to interact with the carriers. Cell phone makers, tech giants etc. are all opposed to the merger because it cuts their options for business in the U.S. market down from 4 to 3 (and realistically.. down to 2, because the merged company would have over 130 million subscribers, so its that or Verizon Wireless). Yes there are rural and local wireless companies, but on a federal level there are only four main players.

If you have three carriers with the majority of U.S. customers, then all three have to fight it out for customers. That means competition in pricing, phone subsidies and coverage. Now if you reduce that number from 3 to 2, that's less competition. That's why everywhere there is a free market, there are regulators looking for anti-competitive behaviour, because competition is the real driver of innovation and it gives the best deal for the average citizen. A monopoly does exactly the opposite.

During a hearing with the antitrust subcommittee, AT&T and T-Mobile actually tried to deny that they were competitors... imagine that... two large U.S. carriers saying their businesses don't compete with each other.

There are arguments to be made against the intervention of Government in a free market economy, but in this case its hard to argue that this merger shouldn't be probed before its approved. AT&T has even admitted that it might have to sell off assets in order to comply with existing regulation to get the deal to go through. They already know they are imposing on communications regulations, so now they have to make their case.

That's why the U.S. Congress is examining it, to bring it to the public square, the FCC and DoJ are only examining its legal and competitive implications. Lawmakers don't have the ability to block it, so their letters of support or opposition are opinions they are presenting on behalf of their constituents.

5.8.2011 19:11 #6

ZeusAV

As soon as I hear that the DOJ has approved this deal then I'm leaving T-Mobile.

5.8.2011 19:31 #7

DDR4life

Lawmakers don't have the ability to block it, so their letters of support are opinions they are presenting on behalf of their pockets.

Fixed.

@ZeusAV
I might just join you in that boat. Here's praying that merger is denied.

6.8.2011 00:44 #8

KillerBug

AT&T is only buying T-mobile to get rid of them as competition; they claim that having the towers will help them roll out 4G faster, but for the money they are offering, they could have already built the towers themselves and had cash left over (not that they have any plans of rolling out true 4G anyway...but that is another story).

The reason that the government should be involved is because once AT&T-Verizon have an effective monopoly between them, the government WILL NOT bring suits for price fixing (if they were going to do that, they would have done it by now...these two networks are effectively a monopoly in many states). It is actually very hypocritical for someone from one of these companies to complain about the government getting in the way after all the support that the government has given these companies over the years...if it were not for the FCC's draconian rules, the little guys would eat up AT&T and Verizon like fire ants eating a man covered in honey. Since we know they will not enforce the law later, and we know they will create new laws just to hurt future competitors, we just have to hope they will enforce the law now...and it seems doubtful.

6.8.2011 02:12 #9

dp70

Reason enough to oppose this merger. With AT&T we are screwed and not kissed first.

6.8.2011 06:40 #10

bandabiapela (unverified)

Originally posted by ccwdude: "The proposed deal would be worth about $39 billion, and would consolidate 80 percent of all U.S. mobile users under just two carriers; the new combined AT&T/T-Mobile and Verizon Wireless"

What about Sprint? Why werent they included as a carrier? Shouldnt it be 3 carriers, not 2? sprint and Verizon are CDMA..at&t and t-mobile are GSM

6.8.2011 23:06 #11

dealmein (unverified)

Originally posted by Dela: Originally posted by ROMaster2: Just let them go, the government shouldnt be tangled in the economy at all. The owners, the stockholders, of the companies have agreed to the merger and think its a good business move. They know a whole lot more about business than you or the government, just let them.

If you complain about monopolies and higher prices, then change carriers. No one is FORCING you to use their service, so change or stop using it, but dont cry and whine because you want to force everyone else not to do what they want. And the prices are according to market demand. If you think the price is unfair then dont subscribe, thatll lower the prices (if enough people do it). However, if other people are WILLING to pay the price for the service, then the market value of their is worth more than youre willing to pay for, so theyll take the highest payers.

Stop f*cking with the economy already, were going to hell as it is, and this isnt helping. Sorry man but things are just not that black and white at all. The reason Federal authorities are looking into the proposal is to protect competition in the market. If they find that the merger is of benefit to the market then they will give it the green light, but most analysts Ive read think thats doubtful.

Some of the major concerns affect both consumers and corporate entities. For example, T-Mobile and AT&T use different 3G frequencies, and eventually, T-Mobile customers will have to buy a new phone _if_ the merger goes through. And the merged company will only honour the cellular plan they signed up to with T-Mobile if they buy a "similar phone," so thats another questionable requirement.

Also, think of all the companies that have to interact with the carriers. Cell phone makers, tech giants etc. are all opposed to the merger because it cuts their options for business in the U.S. market down from 4 to 3 (and realistically.. down to 2, because the merged company would have over 130 million subscribers, so its that or Verizon Wireless). Yes there are rural and local wireless companies, but on a federal level there are only four main players.

If you have three carriers with the majority of U.S. customers, then all three have to fight it out for customers. That means competition in pricing, phone subsidies and coverage. Now if you reduce that number from 3 to 2, thats less competition. Thats why everywhere there is a free market, there are regulators looking for anti-competitive behaviour, because competition is the real driver of innovation and it gives the best deal for the average citizen. A monopoly does exactly the opposite.

During a hearing with the antitrust subcommittee, AT&T and T-Mobile actually tried to deny that they were competitors... imagine that... two large U.S. carriers saying their businesses dont compete with each other.

There are arguments to be made against the intervention of Government in a free market economy, but in this case its hard to argue that this merger shouldnt be probed before its approved. AT&T has even admitted that it might have to sell off assets in order to comply with existing regulation to get the deal to go through. They already know they are imposing on communications regulations, so now they have to make their case.

Thats why the U.S. Congress is examining it, to bring it to the public square, the FCC and DoJ are only examining its legal and competitive implications. Lawmakers dont have the ability to block it, so their letters of support or opposition are opinions they are presenting on behalf of their constituents. Eventually, T-mobile customers will need to buy a new phone. T-mobile phones will operate on AT&Ts technology and on their spectrum. They could even operate now on AT&Ts system if both carriers allowed it. Eventually all customers on all networks will need to replace their phones as the technology evolves. Even T-mobile could require their customers to modify the terms of their existing plan. Read the fine print of your contract. If the carrier believes the terms of your contract can no longer be supported, they can make you adjust your plan once it expires. Gone are the days when a phone lasts for 10 years. You may get more than 2 years out of it, but eventually youll need to replace it as the carriers no longer support the outdated technology.
One of the merits of the case is that T-mobile does not believe it can successfully compete any longer. They do not have the spectrum or the capital to deploy 4G-LTE. Even if they did try to deploy it, the costs could run them into bankruptcy and they could erode their existing customer base during the deployment. T-mobile has never returned a profit and either direction it goes with the next technology could spell disaster.

11.8.2011 11:01 #12

Royalflush85 (unverified)

TOriginally posted by ccwdude: "The proposed deal would be worth about $39 billion, and would consolidate 80 percent of all U.S. mobile users under just two carriers; the new combined AT&T/T-Mobile and Verizon Wireless"

What about Sprint? Why weren't they included as a carrier? Shouldn't it be 3 carriers, not 2?[/quote
The other 20% is made up of sprint and other carriers sprint is to small to be included in the 80%

12.8.2011 07:47 #13

pmshah

Originally posted by Morreale: I'm sure these two idiots have already been payed enough, but just think of how much more they'll get if the takeover is allowed... Considering how dumb the American government is, that's probably what the letters were about -_- So who gives a s**t if they take longer to rollout 4G? They are not too hot on GSM services in any case. AT&T talks as if T-Mobile already has the 4G service in operation in the US.

Don't say the American government is dumb. It is the electorate that is dumb electing these avaricious a******s. But than what do you expect when lobbying (read bribing) is official and legal.

The fact that AT&T has agreed to pay T-Mobile something like $ 6 Billion in the event that the merger is not approved just reeks of under the table "fait accompli".

12.8.2011 08:30 #14

bdaleypsu

Originally posted by ccwdude: "The proposed deal would be worth about $39 billion, and would consolidate 80 percent of all U.S. mobile users under just two carriers; the new combined AT&T/T-Mobile and Verizon Wireless"

What about Sprint? Why weren't they included as a carrier? Shouldn't it be 3 carriers, not 2?
Obviously, reading comprehension is not your strong suit.

12.8.2011 23:52 #15

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