AT&T's deal to buy T-Mobile, once thought almost a sure thing, has been sidelined thanks to an antitrust suit from the Justice Department. Sprint, the smallest of four national US carriers, and regional carrier Cellular South have filed similar suits of their own.
AT&T argues it's actually competition, not a lack of it, the two companies are afraid of. Sprint claims that the loss of T-Mobile as an independent entity would eventually lead to their own demise, resulting in just two national carriers.
Cellular South is arguing the buyout would result in less competition for roaming deals which regional carriers rely on to extend their coverage.
In fact, like so many arguments AT&T has made so far, their claims of competition seem to be dishonest, if not completely false. They argue Sprint fears their ability to become a more formiddable competitor.
That's exactly what Sprint has said, and the reason they say they will be eiliminated from the market. The question isn't whether AT&T would become more competitive. It's whether that would lead to more competition in the long term instead of just long enough to get rid of some competition.
Given the history of broadband Internet providers in the US, we can safely say that a duopoly, such as the one which could be created if Sprint is absorbed by either Verizon or AT&T, ultimately leads to less infrastructure investment and higher prices.
AT&T criticized Cellular South for saying they wouldn't oppose the deal if AT&T promised not to engage in "facilities based competition" in its regional coverage area. That, they say is also about competition, not the lack of it.
A representative of Cellular South, recently renamed to C-Spire Wireless, accused AT&T of lying about their conversations, writing in an email:
In the days surrounding the announcement of AT&T?s takeover of T-Mobile, AT&T approached us in an effort to gain our support. Mr. Meena raised the same issues that we have articulated for years.
In typical fashion, AT&T declined to address those issues and we moved on. Meena never suggested that AT&T not compete in Mississippi or anywhere else.
Written by: Rich Fiscus @ 30 Sep 2011 19:16
