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Verizon Chief Defends AT&T-T-Mobile Merger 128

Posted by timothy from the there-is-some-very-faint-praise-in-there dept.
The proposed merger of AT&T with T-Mobile doesn't impress everyone as a good idea; in particular, Sprint has filed suit to stop the merger, and while hardly a disinterested party, they're not alone in claiming that the resulting megacompany would harm customers. Verizon is taking a different tack; tekgoblin passes along this excerpt: "Verizon Communications chief executive Lowell McAdam has announced that he is supporting the AT&T T-Mobile merger. He warned that the Government has no choice but to let the deal go though unless they want to fix the current spectrum problems. He went on to say 'We need to be very thoughtful on what the impacts would be to the overall industry if this is a way to regulate the industry without actually passing regulation.' The current telcos need more wireless spectrum to continue expanding and operating efficiently so they have resorted to acquiring other companies."
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Verizon Chief Defends AT&T-T-Mobile Merger More

Verizon Chief Defends AT&T-T-Mobile Merger

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  • I read a while ago that Deutsche Telekom is looking to get rid of its American T-Mobile. I haven't heard anyone else jumping up with an offer to buy it - and it makes sense that only another GSM provider would want to - so it seems there may be a chance of the T-Mobile (as we know it in the US) going away completely if nobody buys it.

    So for us poor bastards on T-Mobile it seems that our fate is either
    • Become AT&T customers
    • Watch T-Mobile go away and become someone else's (possibly AT&T) customer o
    • Rumor had it before the AT&T deal was announced that Sprint was negotiating with T-Mobile [cnn.com].

      It could easily be one of the reasons why Sprint is so vocal about their opposition to the AT&T deal.

      • Good link. That pretty much sums it all up. Logic would dictate that Sprint has something to gain or lose from the deal; this points to what it is. So was it a lack of gain they're concerned about or is it a little clue that Sprint is losing momentum and about to go belly-up? *rubs hands together*

        • These are all chess moves by monopolies that can't deal with competition. The game is so small that they're scared to death at what might happen.

          First, Sprint has NO MONEY and won't be able to raise enough debt to acquire T-Mobile, even if Deutsche Telekom GAVE IT TO THEM. Sprint has no GSM experience, and they'r desperately wound up in trying to deliver 4G/LTE.

          Second, Verizon wants this to happen so they can justify their acquisition of SPRINT, who is the only other CDMA carrier of note in the world.

          This i

      • And they didn't step up to the plate in the end. AT&T did with a great offer. Sprint just got outplayed.

      • Re:Doesn't the consumer lose regardless? (Score:4, Informative)

        by arth1 ( 260657 ) on Thursday September 22, 2011 @12:16PM (#37481906) Homepage Journal

        The funny thing is that T-Mobile used to be affiliated with Sprint.
        Global One Communications was a conglomerate of Sprint, Deutsche Telekom and France Telecom, and T-Mobile and Orange trace their roots there.

        T-Mobile USA, on the other hand, is basically the old PN Voicestream network, which was bought up by T-Mobile, a subsidiary of DT, and has little to do with T-Mobile, except the current ownership.
        AT&T buying T-Mobile USA is really AT&T buying the remains of Pacific Northwest that it hasn't already sucked up and reincorporated like a Terminator robot.

        Confused yet? Not after the next episode of Telesoap!

      • Ya, like your rumor source has access to what any of the Telco's do or consider. I believe it; not.

    • Hmm. Yeah. Interesting.

      It would make sense to purchase some GSM/TDMA equipment that is in operation while, at the same time, upgrading the UMTS and higher-speed data equipment all over the AT&T network. The GSM / EVDO crud could then be sent out to more distant areas that aren't covered currently. The rest could be sold off at auction or through deals to support overseas basic network establishment. Interesting. Interesting.... Let's see what happens.

    • Re: (Score:2)

      by Artraze ( 600366 )

      It's quite unlikely that T-Mobile will just go away. They have a fair amount of inherent value in their infrastructure, and anyone wanting to become a mobile provider (e.g. Google, venture capitalists, etc) would save themselves a great deal of pain by buying T-Mobile (vs. trying to get towers and spectrum themselves). Realistically, though, it seems most likely they'll get spun off as their own business.

      The point is, there's more than enough room for T-Mobile or a similar company in the mobile playing fi

      • I've said it before, but I think that the most likely outcome if T-Mobile goes up for sale after this deal is blocked would be for somebody like Century Link to acquire it so as to not be limited to reselling somebody else's service.

    • Re: (Score:3)

      by swb ( 14022 )

      How about Google buying it? Or maybe not even Google, but a private equity syndicate led by Brin, et al and other like-minded technology people, with someone brought it to run it as a "not evil" company.

      Other less palatable concepts are Comcast buying it; I get a full court press from Comcast sales droids for phone and they always seem slightly annoyed that I'm all cellular, this would allow them into all voice markets. I'm not saying this is a "good" idea but it would be something of a business fit.

      • I think Google would be subject to antitrust investigations as well, since they'd have vertical integration from the OS to the hardware (potentially) to the service. It would be very tempting to leverage this position, and could even be considered negligent if they didn't, which would open them to shareholder lawsuits.

    • Option 3: All current TMO customer purchase enough shares (collectively) to block any such buy-out.

  • Translation (Score:5, Insightful)

    by GameboyRMH ( 1153867 ) <gameboyrmh.gmail@com> on Thursday September 22, 2011 @10:02AM (#37480110) Journal

    We're ready for less competition! Bring it on!

    • Re:Translation (Score:5, Insightful)

      by AngryDeuce ( 2205124 ) on Thursday September 22, 2011 @10:11AM (#37480272)
      It surprises me that these corporations don't just say stuff like that at this point. They own our government, and the vast majority of people don't even give a shit. Why be coy? There are no repercussions anyway.

      • It surprises me that these corporations don't just say stuff like that at this point. They own our government, and the vast majority of people don't even give a shit. Why be coy? There are no repercussions anyway.

        When the conclusions logically drawn from your premises don't match observed behavior, it's a good idea to check your premises.

        • good point. there are actually giant repercussions, and stifling business is what causes a lack of economic growth, which in turn leads to a lot of why areas have very poor financial forecasts (bankruptcies in europe), etc.

          Oppressive monopolies are not good for financial health of any country.

      • If you can get into industry conferences you'll hear them do exactly this. An AT&T exec was famously heard to say something along the lines of "we're locking down the Internet and setting up toll booths" at such a thing. That was in the mid-2000s.

      • Re: (Score:2)

        by sjames ( 1099 )

        It's kinda like when you tell the teacher you have a headache and she "just happens" to put a bottle of aspirin on her desk and look away. We all know what's up, including that she needs some level of plausible deniability.

        Same deal here. They don't legally and legitimately own the government. Their ownership is more defacto.

        If government officials, and especially the courts admit that the Constitution is null and void, then their only means of demanding payoffs from their corporate masters will evaporate.

    • McAdam was also heard before the conference saying, "It would be nice to have a larger portfolio to purchase later if, you know, we want to do that.... whenever. I'm just sayin'." /humor

    • Re: (Score:2)

      by Xacid ( 560407 )

      GOOD CALL.

      That's essentially what I got out of it. There's no way consumers will win from this deal.

      I wrote my congressmen when this first came to news and got a reply recently:

      Thank you for contacting me to express your opposition to the proposed acquisition of T-Mobile USA by AT&T. I always appreciate your input and the opportunity to share my thoughts with you.

      As you may know, on August 31, 2011 the Department of Justice filed an antitrust lawsuit against AT&T placing the matter before a United States District Court. A hearing has been set for September 21, 2011 in the federal court to discuss the status of the case. While I am not aware of legislation having been introduced that confronts this issue, I will certainly keep your thoughts in mind should there be any relevant bills proposed in the future.

      Again, thank you for writing me on this important issue. If I can ever be of assistance, please do not hesitate to contact me or a member of my staff.

    • We're ready for less competition AND the competition playing around for 5 years or so trying to get their merger sorted out while we roll out 4G :-)

    • Re: (Score:2)

      by rvw ( 755107 )

      We're ready for less competition! Bring it on!

      And merging means no extra bandwidth, so what problem does it solve?

      • Easy, with the increased costs and decreased customer service, they'll probably have fewer users competing for scarce bandwidth.

    • Re:Translation (Score:5, Interesting)

      by Captain Spam ( 66120 ) on Thursday September 22, 2011 @10:34AM (#37480578) Homepage

      Alternate translation: "We're planning on buying out Sprint in a few months, so we hope this doesn't cause any problems for us then."

    • What does it mean in this case - less competition?

      You think AT&T and T-Mobile is not going to try and undercut Sprint? Why?

      If they try to undercut Sprint, then it's good - it's going to force Sprint into MORE competition.

      If instead they try to organize a cartel, it won't work. Oil cartels don't work, nobody wants to stick to their quotas, there is more money to be made by selling beyond quotas.

      If they do set prices that are too high, this is just invitation for more competition from other new directions

      • Re:Translation (Score:4, Interesting)

        by GameboyRMH ( 1153867 ) <gameboyrmh.gmail@com> on Thursday September 22, 2011 @12:19PM (#37481954) Journal

        I'm pretty sure there is some kind of cartel-like arrangement going on already. Look at how the telcos all do things that screw the customer at the same time: jack up SMS rates, impose data limits, block tethering, all conveniently happened around the same time on all carriers.

        And tell OPEC or DeBeers their cartel doesn't work. Remember to yell, it's hard to hear when you're swimming in a pool of cash.

        • OPEC doesn't work as a cartel. They are selling above their quotas, it makes no sense for them not to sell. The higher the prices the more capacity they try to bring on line, but there is no more capacity to open up.

          Today's gas prices are lowest in history of USA. You can buy a gallon of gas for 10 cents.

          Of-course you need a dime that was minted prior to 1965 and had silver in it.

          • Today's gas prices are lowest in history of USA. You can buy a gallon of gas for 10 cents.

            Of-course you need a dime that was minted prior to 1965 and had silver in it.

            Wouldn't help, you'd still be on the 3rd biggest price spike in the last half-century:

            http://www.fintrend.com/inflation/inflation_rate/Historical_Oil_Prices_Chart.asp [fintrend.com]

            • That's what I am talking about, it's not a spike in actual price of oil. The price of fuel at a gas pump is lowest ever in real money.

              The Fed is going to print 400Billion USD more [slashdot.org], will do all sorts of tricks, will bail out banks again by buying out more mortgage backed securities, will now try to suppress long term interest rates, all of this is inflation. Money printing. Setting extremely low cost of borrowing, all of this is inflation.

              So in a depression, that USA and other countries are finding themselve

            • By the way, the competition, where is it supposed to come from? As I mentioned in the other comment above, there is no way to make money in USA because investments are wiped out with government inflation, but what about lending?

              The Fed came out with $400Billion USD stimulus again, but they are going to buy long term bonds, trying to push long term yields down. 10 year is at 1.77% and 30 year is at 2.684%. The lowest 30 year has been was in 2008, it was 2.5%. The 10 year hasn't been this low since 1940s.

              But

        • Oh, by the way, it's true about DeBeers - they are an actual successful cartel.

          However that's because nobody cares about their products enough, and there is real competition, it's a different technology, it's called cubic zirconia, you may want to check it out before you waste your money on whatever 'forever diamonds'. Except for cubic zirconia there are also artificial diamonds.

    • I think AT&T DOES need more spectrum BUT it should be done another way as that leaves ONE GSM provider in the US. I just like GSM better than CDMA.

  • Lowell should read the news more often (Score:5, Insightful)

    by MetalliQaZ ( 539913 ) on Thursday September 22, 2011 @10:06AM (#37480176)

    Looks like he hasn't been keeping up with the latest reports; indicating that AT&T is secretly trying to SELL spectrum to smaller operators in order to get support for the merger. Sounds like they have plenty already. (this was discussed on /.)

    • Re: (Score:2)

      by alen ( 225700 )

      spectrum is local so AT&T is probably selling off spectrum that won't be used nationwide

    • It's possible AT&T is trying to sell spectrum in sparse markets, where smaller carriers have a better business model. If AT&T can pick up 10mhz in New York, it's worth the price to buy and re-sell 10mhz in Killdeer, North Dakota.

    • You're assuming that Lowell doesn't realize he's wrong. Much more likely, he's completely full of it, and saying what he thinks will benefit his company to say because that's what's best for him and his shareholders.

      • Re: (Score:2)

        by afidel ( 530433 )
        Of course he is, less competition in the market will lead to higher ARPU and lower churn. Even if they keep exactly the same number of subscribers Verizon wins from an AT&T T-Mobile merger and they don't have to spend any capital to get it done meaning for his tenure at Verizon he'll probably outperform AT&T.

    • Re: (Score:2)

      by tsotha ( 720379 )
      Sell spectrum where? North Dakota? AT&T is already out of spectrum in some of the larger markets.

  • This makes perfect sense (Score:5, Insightful)

    by dkleinsc ( 563838 ) on Thursday September 22, 2011 @10:07AM (#37480210) Homepage

    It would give Verizon the go-ahead to gobble up Sprint in, say, a hostile takeover, leaving only AT&T and Verizon on the playing field. A 2-company oligopoly can price gouge more easily than a 4-company oligopoly.

    • Sounds about right.

    • And then AT&T just has to buy Verizon and it's back to Ma Bell for everyone!

      The difference, of course, is that this time they'll own the justice department as well.

      • Re: (Score:3)

        by geekoid ( 135745 )

        That's the same thing people said about Ma Bell..yet they got broke up.

        Please stop the 'corporation own the government' idiocy. It was tiring to here people say it 40 years ago, and it's tiring now.

        • That's the same thing people said about Ma Bell..yet they got broke up.

          Yes, after having a monopoly for about 60 years.

    • Nummy nummy nummy, I got spectrum in my tummy. :>

      Sorry.. it was right there.

    • And don't forget that Verizon is also just a former Baby-Bell. For those that would like a eye-popping account of the last 120 years of Ma Bell's straggle hold on US technological innovation read the book "The Master Switch" by Tim Wu.

      Verizon Communications Inc. (NYSE: VZ, NASDAQ: VZ) is a global broadband and telecommunications company and a component of the Dow Jones Industrial Average. It started in 1983 as Bell Atlantic (based in Philadelphia) with a footprint covering New Jersey to Virginia and eme
  • Looks like Verizon is posturing for its plan to merge with Sprint. No no mergers are the only way we can keep up with customer demand. I mean you can't expect us to spend profits on upgrading our network. That would be silly.

    • Not so much if you RTFA. Verizon seems much more interested in grabbing new slices of wireless spectrum from the Government.

  • How can Verizon buy Sprint if AT&T isn't allowed to buy T-Mobile?

  • it is good for Verizon (Score:2, Insightful)

    by Anonymous Coward

    It is good for Verizon, because it gets rid of another competitor. They can raise rates more without another decent competitor to keep them in check.
    They also figure, probably rightly so, that a lot of TMobile customers will leave when it happens, giving Verison more.
    Then ATT will continue doing the only thing they know how to do, and that is to keep getting worse than they already are, which will drive even more customers away with fewer competitors for them to go to.
    More and more customers for Verizon al

  • Verson's turn. (Score:3)

    by andydread ( 758754 ) on Thursday September 22, 2011 @10:36AM (#37480624)
    Hey Lowell McAdam, You are saying that in order to expand you and AT&T needs to buy other companies to get more spectrum. So when they purchase T-Mobile and you purchase Sprint(for more spectrum) of course. What happens to the marketplace when only two players are left?. What happens to customers ability to chose? What happens to the choices of phones? Remember when iPhone was the only decent smartphone AT&T offered? What happens to unlimited wireless? Since AT&T decided to drop unlimited and you decided to follow suit leaving Sprint as the only true unlimited carrier. I don't buy your spectrum argument. I think you are licking your chops at the ability to drive up prices due to lack of consumer choice and nickel and dime us to death with overage charges. We do not want a duopoly on communications in America.

    • ...What happens to the marketplace when only two players are left?. What happens to customers ability to chose? What happens to the choices of phones?...

      Pretend I'm Lowell or any major shareholder...

      "Doesn't matter because I will sell my stock shares off before any government wireless regulation or antitrust settlements reach their point of de-fruition."

    • Sprint actually has plenty of spectrum but they are not out in the country and really neither is T-mobile. I believe very few people had smart phones when those unlimited plans were offered.

      Really what would be best, would be if Sprint was a credible competitor to Verizon and T-mobile to AT&T but really it's just AT&T & Verizon. Verizon and Sprint are CDMA. AT&T and T-mobile are GSM. Verizon's 4G LTE most people that live out in the country will never see just like AT&T's 4G though Veriz

  • I say we let them merge, then bust AT&T up again into 7 little companies to see who gobbles who up. The prices for competition will be good for about 5 - 6 years and we will all get to see some good commercials and not to mention some really cool logos! It's the new way of entertaining the rich and the poor can sit helplessly while they are brainwashed into believing one company is actually better than another...

  • Spectrum is not what's holding AT&T back (Score:4, Insightful)

    by ktappe ( 747125 ) on Thursday September 22, 2011 @11:12AM (#37481128)
    AT&T has plenty of spectrum. What they don't have is connective infrastructure. I constantly have AT&T signal but data just won't go through because the towers' routers are overloaded. AT&T needs to take the billions it is trying to spend buying T-Mobile to add bandwidth.

    • Re: (Score:2)

      by esocid ( 946821 )

      AT&T has plenty of spectrum. What they don't have is connective infrastructure. I constantly have AT&T signal but data just won't go through because the towers' routers are overloaded. AT&T needs to take the billions it is trying to spend buying T-Mobile to add bandwidth.

      But how do you expect ATT to make money? Investing in infrastructure costs money. Doing nothing is free.

    • Yeah, AT&T has said the merger is about getting more towers because the FCC won't permit new ones fast enough for AT&T to stay competitive.

  • ...After all, they're next!

    (and then finally, AT&T will be back together)

  • If you let them buy Tmobile,... (Score:1)

    by Anonymous Coward

    you cannot stop us from buy up Sprint.

  • "With less competition across the board, we can all charge higher prices. It's a win-win!"
  • Honestly, with the cost of internet (I have only one choice in my city of 200K) Comcast charges me, plus the third-party applications to allow telephone calls to wi-fi devices (skype, talkatone, etc.) and free texting, I will eliminate my cellphone before most other expenses. No, I don't need to be accessible all the time and kind of loathe that aspect of modern society, as of late. If you really want to get a hold of me, you know what to do.......

  • Where else will all the T-Mobile customers go?

    Sprint? Stay with AT&T? lol

  • Because that then opens the door for Verizon to purchase Sprint so that there will be even LESS competition.

  • "Collusion and price-fixing are so much friendlier with two. :)" - Lowell McAdam

  • Immoral corporate greed and inane douchebaggery headed for a photo finish!
  • Its easier to conspire with one company than with two when fixing prices and overcharging for services...

    As a Verizon customer, I often wonder why my $99/mo plan costs me $160...

  • "The current telcos need more wireless spectrum to continue expanding and operating efficiently so they have resorted to acquiring other companies."

    Or give them all the same restrictions do they can battle it out on price and not on coverage. A level playing field would let competition work better.

  • This is Verizon basically saying "We want to be able to "merge" with Sprint in a few years so if we fight them on this they're gonna fight us on that"

  • Of course Sprint isn't disinterested! They're bringing suit, which requires that they have standing. In other words, if they *were* disinterested, then the judge would have thrown out the case.

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