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Don't Expect US Approval of Huge Telecom Mergers 64

Posted by Soulskill
from the it's-nice-to-have-options dept.
An article from Reuters explains how mergers involving T-Mobile and Time Warner Cable are likely to face a high level of scrutiny from the Obama Administration. Officials are wary of allowing any more power to consolidate among the huge corporations dominating the industry. A merger with one of the smaller companies would have a much easier time gaining approval. "Regulators could, on the other hand, welcome transactions that bolster new entrants, such as one combining satellite TV service provider Dish Network Corp with T-Mobile, experts say. 'Dish/T-Mobile, from a regulatory standpoint, it would be a slam-dunk,' said Stifel analyst David Kaut. ... The FCC, in an annual report released in March, said competition in the wireless industry is 'highly concentrated.' Similarly, the Justice Department's assistant attorney general for antitrust, William Baer, has described the industry as 'not uniformly competitive.' 'The Department believes it is essential to maintain vigilance against any lessening of the intensity of competitive market forces,' Baer told the FCC in a filing in April related to an upcoming auction of low-frequency airwaves. The government's rejection of AT&T's $39 billion plan to buy T-Mobile from Deutsche Telekom in 2011 remains the biggest shadow looming over big communications deals."
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Don't Expect US Approval of Huge Telecom Mergers

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  • by Anonymous Coward on Tuesday December 24, 2013 @06:25PM (#45778661)

    You mean the ones where they collude to keep the cost of service artificially high?

    • Re: (Score:2, Informative)

      by Anonymous Coward

      i've had a cell phone since 2001. prices have stayed the same and the amount of service you get has gone up.
      back in the 90's you used to pay almost $100 a month for just 60 minutes per month. and if you called someone on the same carrier which was almost impossible since there were like 20 cell phone carriers in the USA you still had to use your minutes

      • We're not talking about cell phones, now take your Nokia brick back to 2001 where you both belong.

      • by Bill Dimm (463823) on Tuesday December 24, 2013 @06:49PM (#45778807) Homepage

        Verizon Wireless has a 41% profit margin [foxbusiness.com]

        • by game kid (805301) on Tuesday December 24, 2013 @07:01PM (#45778859) Homepage

          I love the part where that disappoints the market and it could go up to 50%.

        • by tlhIngan (30335) <slashdot@wor f . n et> on Tuesday December 24, 2013 @07:54PM (#45779131)

          Verizon Wireless has a 41% profit margin

          And you know what? Canada has it worse. In fact, the big 3 carriers were so scared of Verizon coming in that they ran attack ads on the basis of "we pay the lowest!" (of the two major carriers) and "think of the children!" and "jobs jobs jobs!".

          Nevermind that if Verizon actually charged more in Canada, people wont' flock to them.

          Canada's big three are so scared they tried to buy out the small AWS carriers before they even got started - going so far as to offer Wind a 10x profit for their wireless license.

          Then they're pulling every dirty trick in the book to ensure that Wind won't get established (foreign ownership rules, etc). Finally, they even forced Industry Canada to take down their "wireless calculator" because no matter how you sliced it, the small competitors WERE cheaper in every way possible. This tool was in beta testing for a couple of years, and they lobbied to kill it just when it rolled out.

          And when Verizon announced they weren't going to Canada? Their stock rose 30%.

          Yes, it's that bad in Canada. You guys in the US actually have it fairly good.

          • Yes, it's that bad in Canada. You guys in the US actually have it fairly good.

            Well that's some heavy relativism. To have it better than the worst market in the first world isn't to "have it fairly good".

            We both have total shit for cell phone carriers and internet providers. Your service is worse, but you also have plenty of more important things much, much better than America. I'm sorry, but we really don't pity you.

    • There's no need to collude.
      It's a natural thing. Less competition = higher prices.
      All the arguments that cell phone plan prices (per minute, per GB) are coming down, that's a given.
      The cost of ALL mobile hardware is coming down (handsets, radio base stations, backhaul connectivity, switching centers), that's ZERO excuse to say they should be allowed to merge.
      They should be coming down faster if there were enough competition.
      Plus the overcrowded airwaves are mainly the mobile companies fault, they keep adver

  • ...won't fix. Time-Warner and T-Mobil just need to pony up, and then the crony capitalist decision-making will kick in ala Solyndra, GM, CGI and Serco [forbes.com]...

    • The Solyndra case is typical GOP flip flopping.
      1 - It was George W Bush initiative, approved by a GOP majority in the house
      2 - Those gov't incentive plans are expected to have a small number of failures, otherwise the criteria of who gets the money is being too conservative, which means that innovation isn't being sparked
      3 - The reason Solyndra failed wasn't their incompetence, but instead the Chinese dumping of solar panels below cost
      And they try to pin the blame on Obama and a democratic majority (at the

  • Too bad.... (Score:5, Insightful)

    by Rick Zeman (15628) on Tuesday December 24, 2013 @06:32PM (#45778709)

    ....the government didn't have this kind of wisdom when they allowed allow of the oil company mergers again. (It's amazing how 100 years and millions and millions of bribe...err, campaign donations have changed perspectives.) How well have they worked out for the American consumer?

    • (It's amazing how 100 years and millions and millions of bribe...err, campaign donations have changed perspectives.)

      Um - perhaps you're unaware that John D. Rockefeller wrote the regulations that broke up Standard Oil. He laughed all the way to the bank.

      • by Rick Zeman (15628)

        (It's amazing how 100 years and millions and millions of bribe...err, campaign donations have changed perspectives.)

        Um - perhaps you're unaware that John D. Rockefeller wrote the regulations that broke up Standard Oil. He laughed all the way to the bank.

        You're right, I'm unaware of that. Here I always thought this case [wikipedia.org] might have had something to do with it. But yes, he did laugh all the way to the bank pre- and post-breakup.

        • Sure, they fought the breakup as an unconstitutional adventure, but JDR had both sides of the play covered. I seem to have lent out my copy of Constitutional Chaos [amazon.com] out, but I'm pretty sure that's where the background info is (the book is mostly "things they didn't teach you in school about Supreme Court cases").

    • No, its the same wisdom as the oil company mergers, just not as obvious. Ultimately, this will result in T-Mobile declaring bankruptcy (or exiting from the US market), and the RF broadband then resold to AT&T and Verizon, furthering consolidation in the industry.
      • The past is the past, the present is Oil is on it's way to obsolescence. Much like computers used to double in speed, half in power consumption and size every 18 months, electric batteries will follow that trend but more likely on a 8 year cycle. But in that case double power per weight, half price per power and increase rate of charging and discharging. And with just a half cycle (50% move) to make the high end electric car have a 400 mile range, and affordable cars (to the middle class) have 150 mile rang

  • by zbobet2012 (1025836) on Tuesday December 24, 2013 @06:40PM (#45778761)
    Due to the way the cable industry is regulated, there can only be one cable provider in a given market....
    • by Enry (630)

      Bzzt.

      I currently have my choice of Comcast or Verizon FIOS. There's a number of areas in eastern MA where this is the case, probably other locations too.

      • I currently have my choice of Comcast or Verizon FIOS. There's a number of areas in eastern MA where this is the case, probably other locations too.

        You are technically correct, but not usefully correct. I lived in a boston suburb with a similar choice (some towns even have 3 choices there, comcast, verizon and RCN). But for the vast majority of the population there is only one choice.

      • Accurate, but not entirely true.

        I have TWC, Verizon FIOS, and AT&T U-Verse where I live. TWC is the cable monopoly and Verizon is the telephone monopoly. Of course, TWC provides phone service and Verizon provides television service. AT&T is available, but it runs via Verizon's copper-wire DSL service.

    • by puto (533470)
      You are wrong. I work for AT&T(have since 2002) and there are areas we are in where consumers have the choice between Uverse, Comcast, or Timewarner. In my home town I can get Century Link or Cox. There are plenty of areas across the US that have multiple providers in the same market.
      • Two megalithic corporations do not a competitive market make.

        • by Rick Zeman (15628)

          Two megalithic corporations do not a competitive market make.

          Yep. Real competition doesn't begin until there are 4 (or more) entities.

    • by antdude (79039)

      Same for phone services on landlines. Did cable (TWC vs. Comcast) and phone (Verizon vs. Sprint) companies ever have competitions with each other in their own cities in the past? It seems to only apply to landlines. I only see competitions with wireless, Internet (phone, wireless, coax, etc.), TV (satellite and cable), etc.

  • by JoeyRox (2711699) on Tuesday December 24, 2013 @06:45PM (#45778787)
    Jesus there are already too few telecom companies in the USA as it is. If they're dead set on upgrading their position from oligopoly to monopoly then let them do so but regulate their rates like we do other natural monopolies. I imagine they'll quickly lose interest in merging.
  • by Anonymous Coward

    'Twas the night before xmas, and all through the dot
    Not a comment was posted, not even bit rot

    The flamebait was slung at first post with great care
    In the hopes that St. Noob would soon be there

  • Keen observational skills. Maybe they could do the same with food industry as well? I mean they went postal on ma bell, industry is industry right?
  • If you allow two of them to merge you've cut in half the number of corporations that can buy your vote.
  • Translation: If you want that merger approved, you'd better pay up.

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