Verizon Chief Defends AT&T-T-Mobile Merger 128
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."
Doesn't the consumer lose regardless? (Score:2)
So for us poor bastards on T-Mobile it seems that our fate is either
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It could easily be one of the reasons why Sprint is so vocal about their opposition to the AT&T deal.
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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*
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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
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Sprint has no GSM experience....
Sprint purchased Nextel who was running a GSM network.
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Re:Doesn't the consumer lose regardless? (Score:4, Informative)
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!
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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.
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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
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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.
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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.
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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.
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Translation (Score:5, Insightful)
We're ready for less competition! Bring it on!
Re:Translation (Score:5, Insightful)
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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.
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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.
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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.
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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.
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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
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Here's a nicer graphical version.
http://www.freepress.net/files/att_history.jpg [freepress.net]
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Good dirt. Thanks! Your points +1, my trust for the biggest wireless companies -10^3.
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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.
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We're ready for less competition! Bring it on!
And merging means no extra bandwidth, so what problem does it solve?
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Easy, with the increased costs and decreased customer service, they'll probably have fewer users competing for scarce bandwidth.
Re:Translation (Score:5, Interesting)
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."
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Whoa, mod parent Interesting.
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I was thinking insightful. That was my take on seeing the headline.
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My thoughts exactly. :)
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Yup, me three. Right on, right on.
Cellular telephony motto: "there can be only two." AT&T learned the hard way about the problems with "one".
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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)
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.
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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.
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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]
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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
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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
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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.
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Price fixing is a stupid idea, it doesn't work for cartels because it makes them more money to bring in more customers, so they come up with plans that undercut whatever prices they might have otherwise 'fixed' upon.
Except for that, if there is unfilled demand there will be competition, unless of-course government prevents competition, and it likes to do that.
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Sure, some companies always try to do that, it only makes sense for them to do so. However government involvement ensures that there will be a monopoly, not the other way around.
The market figures out its ways around cartels, for example OPEC can't do anything about its members selling more than their quotas, simply because it's so lucrative. What are you going to do? The only thing to do is start a war. Well, only government can do that - so there we have a few of those wars happening, Iraq, Libya.
However
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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.
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I think everyone likes GSM better than CDMA, except the carriers of course.
Lowell should read the news more often (Score:5, Insightful)
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 /.)
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Good for at&t? And if it's so important why are they trying to sell off spectrum? Apparently it's not as pressing an issue as we are being lead to believe if they can afford to sell some off.
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AT&T's argument is that the amount of mobile devices and large bandwidth data users could grow by up to ten times the current amount in under five years.
With the ridiculous bandwidth caps and tethering blocks? Yeah, right.
I have a feeling we're going to see data usage plateau. I know I've curtailed my data usage heavily since Verizon instituted the 2GB cap.
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Isn't that the truth....
The truest importance is subconscious and used in marketing constantly. As long as the buyer believes they are on the "fastest network in the country/world", they are superior. The actual performance on your individual phone may vary. No warranties expressed or implied. See ad for details. etc etc etc.
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. I know I've curtailed my data usage heavily since Verizon instituted the 2GB cap.
You moved to Verizon after they removed the unlimited plan? Also, you haven't realizes that there is a 5GB cap on VZ, not 2GB?
VZ hasn't forced anyone but new customers onto the cap, I still have unlimited.
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spectrum is local so AT&T is probably selling off spectrum that won't be used nationwide
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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.
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This makes perfect sense (Score:5, Insightful)
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.
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Sounds about right.
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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.
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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.
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That's the same thing people said about Ma Bell..yet they got broke up.
Yes, after having a monopoly for about 60 years.
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And then essentially reforming over the next decade like the T-1000.
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Nummy nummy nummy, I got spectrum in my tummy. :>
Sorry.. it was right there.
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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
Re:This makes perfect sense (Score:4, Informative)
Freepress.net has a lovely illustration of the history of the baby bells.
http://www.freepress.net/files/att_history.jpg [freepress.net]
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Re:Proof they need more regulations (Score:5, Insightful)
Never trust industries to regulate themselves when it comes to anything.
FTFY
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They are also looking forward to an in influx of former T-Mobile customers.
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Verizon Sprint Merger? (Score:2)
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Not so much if you RTFA. Verizon seems much more interested in grabbing new slices of wireless spectrum from the Government.
of course they do (Score:2)
How can Verizon buy Sprint if AT&T isn't allowed to buy T-Mobile?
it is good for Verizon (Score:2, Insightful)
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)
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...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."
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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
Merge then Bust 'em (Score:1)
Spectrum is not what's holding AT&T back (Score:4, Insightful)
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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.
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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.
Of course he would defend it... (Score:2)
...After all, they're next!
(and then finally, AT&T will be back together)
If you let them buy Tmobile,... (Score:1)
you cannot stop us from buy up Sprint.
What the Verizon Chief really wants to say (Score:2)
One more expense to eliminate (Score:2)
Of course he does (Score:2)
Where else will all the T-Mobile customers go?
Sprint? Stay with AT&T? lol
Of course they support it. (Score:1)
Then VZW buys Sprint or Sprint goes under. (Score:2)
"Collusion and price-fixing are so much friendlier with two. :)" - Lowell McAdam
And down the stretch they come! (Score:2)
Price fixing. (Score:1)
As a Verizon customer, I often wonder why my $99/mo plan costs me $160...
No (Score:2)
"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.
Im not suprised (Score:1)
Not disinterested? (Score:1)
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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Then the industry will have to be regulated, Again.
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And look at what happened when they busted Ma Bell up, two of the Baby Bells ended up assimilating most of their sibs and the legacy LD landline providers: Bell Atlantic/NYNEX + MCI --> Verizon, Southwest Bell/Pac Bell/Ameritech/Bellsouth + legacy-Ma --> "The New AT&T" (ptui). Mountain Bell, er, US West, was bought up by Qwest during the dot-com bubble, now being acquired by CenturyLink.
There's something to be said for economies of scale, the problem is the laissez-faire regulatory structure that
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Ah, but you're not seeing the whole picture. The benefit of the breakup was that AT&T (the long distance carrier) was separate from the wire carriers for a very long time, and that to this day, the wire services are required to allow competitors to use their lines for other services.
An ideal breakup of AT&T and Verizon would be similar: the towers would be owned by two nationwide companies that are both forbidden to lease access to individual customers, and the customer base would be divided among
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AT&T and Verizon might be Bell's children, but their cultures and long-term business strategies are about as different as you can get. AT&T's long-term strategy is to abandon wired infrastructure, and spend as little money as possible expanding capacity in favor of capping users into submission. Verizon's long-term strategy is to run fiber everywhere, costs be damned, and charge top dollar for a premium service. In a very real sense, when the original AT&T got broken up, SBC inherited the cheaps