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AT&T/T-Mobile Merger 'Not In the Public Interest' 190

jfruhlinger writes "AT&T's plan to merge with T-Mobile just hit a pretty big snag. The FCC declared the merger would be anti-competitive and not in the public interest." According to the NY Times, the FCC seeks to hold a hearing before an administrative law judge in which the burden would be upon AT&T to prove the deal isn't anti-competitive.
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AT&T/T-Mobile Merger 'Not In the Public Interest'

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  • by Joe_Dragon ( 2206452 ) on Tuesday November 22, 2011 @07:12PM (#38142476)

    you have to rent your home phone?

  • I agree (Score:5, Funny)

    by larry bagina ( 561269 ) on Tuesday November 22, 2011 @07:14PM (#38142510) Journal
    T-Mobile has a banging-hot chick in their advertisements. AT&T does not have a banging-hot chick in their advertisements. Banging-hot chicks are clearly in the public interest.
    • by Daetrin ( 576516 )

      T-Mobile has a banging-hot chick in their advertisements.

      And i find it hard to believe that when they were filming their latest commercial they didn't notice what it actually sounds like when they're singing "walking in a 4g wonderland."

    • ...the T-Mobile store is right next to a sex shop.

      The giant posters of the T-Mobile girl (her name is Carly Foulkes, btw) make me want to go to the sex shop more than they make me want to buy a phone.

  • by aristotle-dude ( 626586 ) on Tuesday November 22, 2011 @07:18PM (#38142550)

    This is not in the public interest but allowing fragmentation of cellular standards between GSM/HSPA and CDMA was in the public interest by allowing the major carriers to offer incompatible services so that they did not have to directly compete with each other was? Was it in the public interest to allow a a further fragmentation of GSM/HSPA between standard HSPA with AT&T and AWS for T-Mobile? Was it in the public interest to allow further fragmentation of CDMA with Sprint going early with CDMA + WiMax?

    The major carriers could have all agreed to use HSPA years ago and shared the standard frequencies used in Canada just like how Canada has Telus, Bell, Rogers and smaller virtual carriers all operating HSPA frequency networks compatible with the iPhone and other popular handsets.

    • by dave562 ( 969951 ) on Tuesday November 22, 2011 @07:21PM (#38142604) Journal

      They let the market sort it out. I might not have been the best approach from a technical point of view, but from a capitalistic point of view it was fine. Given that the carriers practically give away phones every time you sign a contract, having to wait a year or two to jump carriers is not the end of the world. It would be great if you could take your phone with you, but that would be unAmerican. I would rather that the carriers get to decide what technologies they want to use. Expecting the government to make educated decisions when it comes to technology is unrealistic.

      • by PRMan ( 959735 ) on Tuesday November 22, 2011 @07:30PM (#38142710)
        And CDMA works better in wide open spaces and GSM works better in populated areas. Is it any wonder that Sprint and Verizon rule the Southwest while AT&T rules the Northeast? Having the government choose a single standard would have been a mistake.
        • I live in a populated area, no GSM doesn't work any better than CDMA does. My reception with Sprint was significantly better than my reception with AT&T. Where the former uses CDMA and the latter uses GSM. A few minutes ago I tried to call a friend and despite having 4 bars I wasn't able to complete the call. I got through, but there wasn't any ability to talk.

          • by Anonymous Coward on Tuesday November 22, 2011 @08:03PM (#38143040)
            AT&T's incompetence doesn't necessarily mean that GSM is a bad implementation. It just means that AT&T sucks. I've had T-Mobile for a few years and it works fine in the populated areas I live in.
          • by swalve ( 1980968 )
            Four bars means you were talking to the cell tower. Your inability to complete the call is something else besides GSM/CDMA. The call would never even start to connect if it was the tower's fault. Could be AT&T's network behind the scenes, but I would find that surprising.
            • Could be AT&T's network behind the scenes, but I would find that surprising.

              As an AT&T customer (not for much longer), I certainly don't find that surprising at all.

        • by don.g ( 6394 ) <> on Tuesday November 22, 2011 @08:20PM (#38143198) Homepage

          2G GSM has limitiations due to the time-division nature of its air interface that makes covering large areas not work due to propogation delay. 3G GSM *is* CDMA. It covers large areas well at a lower frequency, but initial deployments were all at 2.1GHz which has issues with signal propogation (read: doesn't go through buildings/etc as well as sub 1GHz GSM).

          Minor nitpick: in the above I use "CDMA" to mean "Code-division multiple access", a generic description of the approach that the IS-95 and 1xRTT air interfaces use -- they are commonly referred to as CDMA, they're what sprint/verizon use/used, but there are other protocols that use that approach too.

        • by sremick ( 91371 )

          I live in an extremely rural, low-populated area and AT&T (GSM) gets far-better coverage than Verizon, to the point where my unfortunate Verizon-using friends are always asking to use my phone because they're getting no signal.

          Why don't they just switch to AT&T, you may ask? Simple: Verizon's slimey marketing scheme which turns all their customers into unpaid salespeople. Because their plans offer "free texting (but only to other Verizon customers)" and other underhanded BS like that, it encourages

        • Europe has a single standard. You can switch carriers and take your phone with you. You can tether without paying extra. Plans are cheaper. Minutes are cheaper. I think we got taken with that free market bs.
      • Re: (Score:2, Insightful)

        by khipu ( 2511498 )

        They let the market sort it out. I might not have been the best approach from a technical point of view, but from a capitalistic point of view it was fine.

        No, it wasn't "fine" from a free market point of view either. In order to have an efficient market, people need to be able to make choices.

        Expecting the government to make educated decisions when it comes to technology is unrealistic.

        The government didn't have to guess, it could simply have forced companies to pick a common standard. Furthermore, given

    • Re: (Score:2, Informative)

      by Macrat ( 638047 )
      Mod parent up.
    • by SpzToid ( 869795 )

      This also sort of explains why the US is the way it is, because everywhere else it seems GSM/HSPA works.

      Posting only to un-do a faulty mod. But seriously I didn't click-slip, there's some bug than turned my intended mod into flamebait.

    • This is not in the public interest but allowing fragmentation of cellular standards between GSM/HSPA and CDMA was in the public interest ...

      I believe that when someone does something right, slamming them for doing something else wrong is not the best use of time. If we want to see more good activity, we should support the good activity--in other words, more flies with honey.

    • by mgblst ( 80109 )

      So, you are too stupid to understand limited government involvement. Perhaps you think the government should be making all decisions for corporations, what OS they should run, etc....

    • by geniusj ( 140174 )

      Well.. Almost. []

    • This is not in the public interest but allowing fragmentation of cellular standards between GSM/HSPA and CDMA was in the public interest by allowing the major carriers to offer incompatible services so that they did not have to directly compete with each other was?

      You sound like you expect some logical, objective standards about what the government decides is "in the public interest" when it comes to mergers. The reality is anything but. America used to have three major airliner manufacturers. Lockheed got out of the business, and then Boeing bought McDonnell Douglas. This left America with one airliner manufacturer. The US government was fine with granting a total monopoly in that field.

      "In the public interest" is whatever the current crop of politicians decides it

  • AT&T mouthpiece (Score:5, Insightful)

    by dave562 ( 969951 ) on Tuesday November 22, 2011 @07:18PM (#38142556) Journal

    Larry Solomon, senior vice president of corporate communications at AT&T, called the F.C.C.’s action “disappointing.”

    “It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the U.S. economy desperately needs both,”

    Just because AT&T continues to say that the deal would result in investment does make it true. If they were interested in investing in infrastructure and jobs, they would do it. Instead they want to buy T-Mobile, loot whatever is left in their coffers and lay off all of their workers.

    When an organization as corrupt as the United States government is coming out against a deal, you can be certain that something is rotten in Denmark.

    • The best part is the implication that government, funded by citizens paying taxes, has some grudge against businesses investing money and creating jobs.

    • Honestly, they should be charged with a violation of the Lanham act just for that statement.

    • Re:AT&T mouthpiece (Score:5, Insightful)

      by hedwards ( 940851 ) on Tuesday November 22, 2011 @07:58PM (#38142990)

      I think the relevant bit here is that there are some lies that are so big that even government agencies can't look the other way. This would be one of them. AT&T would have brought a bunch of low paying call center jobs back to the US and laid off a significant number of technicians that would no longer be needed to maintain the duplicate infrastructure.

      I'm not sure how anybody could possibly buy the notion that prices would go down when competition is reduced form 4 to 3 companies. And probably from there to 2 companies.

      • Re: (Score:2, Troll)

        by Grishnakh ( 216268 )

        It's called the "Big Lie". Repeat a lie often enough and people will start to believe it. Just look at how all the Teabaggers believe that monopolies and cartels are good for the economy.

    • Just because AT&T continues to say that the deal would result in investment does make it true. If they were interested in investing in infrastructure and jobs, they would do it.

      No, their problem is permitting for cell tower space takes 3-5 years because of FCC delays. AT&T is over-capacity today, and can't wait that long to build out, so they need T-Mobile's towers.

      Instead they want to buy T-Mobile, loot whatever is left in their coffers and lay off all of their workers.

      No, they want to take their

      • Re:AT&T mouthpiece (Score:4, Insightful)

        by dave562 ( 969951 ) on Tuesday November 22, 2011 @10:36PM (#38144198) Journal

        So AT&T's failure to develop an adequate 5 year plan that addresses the needs of the market is the FCC's problem? The only reason they "need" T-Mobile's towers (at least given the argument that you laid out) is because AT&T cannot plan ahead.

        Welcome to corporate America, where very few seem capable of seeing past next quarter.

        You should go to work for AT&T. Seriously. If what you say is true, you would not be doing any worse than the "experts" that AT&T currently has on the payroll who are trying to influence the government with regards to this deal.

  • by cptdondo ( 59460 ) on Tuesday November 22, 2011 @07:19PM (#38142562) Journal

    and get paid for lying through my teeth!

    Hey! We're buying T-Mobile to keep it out of the hands of our rivals. We don't care about the customers or the service, in fact we just want T-Mobile gone. But we'll tell you that the merger will create tens of thousands of jobs! And fewer companies in the marketplace means more competition! Yeah, baby!

    I'm glad someone in the FCC has the cojones to stand up to this sort of nonsense.

    • by yuhong ( 1378501 )

      I have been saying legacy PR based on controlling the message is fundamentally flawed for a while now.

    • And fewer companies in the marketplace means more competition! Yeah, baby!

      No, fewer companies in the marketplace does not mean more competition. It means more innovation. Because now the few remaining telcos will have more money to be able to provide innovative services like...I dunno...TV! Yeah! That's it!

  • by bogaboga ( 793279 ) on Tuesday November 22, 2011 @07:20PM (#38142584)

    ...that way, Google can talk (read boast) of true vertical integration. How about that?

    • by Daetrin ( 576516 )
      It would never get approved because of that, not after the Motorola deal anyways, but i think it would be a great thing, or at least better than the alternatives. It would keep T-Mobile alive as a GSM alternative to AT&T at least and i don't think vertical integration is all that bad as long as you've got plenty of horizontal competition at all the levels.

      But even aside from the regulatory approval, $40 billion is a pretty large chunk of change, even for Google.
      • $40 billion? Pocket change [].
        • by Daetrin ( 576516 )
          From the site you linked: "Google Cash and ST Investments: 42.56B." I don't think "practically every bit of cash you have on hand" equates to "pocket change."
          • by fnj ( 64210 )

            Who do you know who has cash on hand which is not in their pocket? Do you have bills sewed into your mattress? Stacks of bills stashed away in a wall safe? If you have a lot of cash, you put it in some form of investment. Cash *IS* pocket change.

            • by Daetrin ( 576516 )
              Lots of people? I have one friend who has a large pile of cash in a safe. Personally i have a couple thousand in a simple savings account which is effectively the same thing (the "ST Investments" bit in "Cash and ST Investments") That's aside from the couple hundred i get paid in cash every month from my roommate, which sits on my desk and is only slowly transferred to my literal pockets as needed. And when you're speaking of approximately five times their current annual profit it's not pocket change anymor
      • by hedwards ( 940851 ) on Tuesday November 22, 2011 @08:01PM (#38143016)

        Vertical integration isn't illegal provided that the company doesn't use it to harm the competition. Amazon right now represents a vertically integrated publisher where they own all steps from production to distribution and in some cases even the reader you read on. They haven't been sued for antitrust violations nor will they likely any time soon as they're still disrupting the industry and bringing more competition to the market.

        Depending upon how Google handled it they could definitely bring competition via a vertical monopoly. Remember being a monopoly isn't illegal, abusing market position is.

  • INEVITABLE MERGER (Score:2, Informative)

    by Anonymous Coward

    Assuming AT&T can't by T-Mobile,who else is going to buy / merge with T-Mobile?
    The whole deal was based around AT&T hugely over paying for the benefit of reducing competition,
    other companies may well want to buy T-Mobile, it just doesn't make sense at the rate AT&T was paying.
    AT&T could even buy parts of T-Mobile, either network or spectrum, but if they can't get anything that reduces competition,
    then they have no reason to pay more than anybody else, and have an existing network that they c

    • Approval would be far more likely were it Sprint trying to buy it, especially in light of the document that leaked proving that AT&T was just trying to buy out the competition to have less of it. However, Sprint doesn't have the money to do so and is still trying to deal with the technology merger from when it bought Nextel. Maybe in a few years, when LTE is the de facto standard instead of the competing 3G techs, such a merger will make sense, but not now.

    • Could Google? I was thinking about Apple wanting to build out it's own network of sorts, then thinking about Apple being able to control the experience from top to bottom. A few minutes on Google and I find that T-mobile is worth about $11 Billion, and Google has about $37 Billion on hand. When you also consider that Google has flirted with providing wifi in cities, and is rolling out a fiber network in Kansas City, it makes an odd kind of sense that they might want a cellular network, too.
    • Re: (Score:3, Insightful)

      Why does someone have to buy T-Mobile?
      • That's what I want to know. Supposedly the parent company is looking to sell T-Mobile. Personally, I'd expect somebody like Centurylink to buy it up. Centurylink bought Qwest a while back and provides internet in many states, owning a cell business as well would make it much more competitive with folks like Verizon and allow for it to roll out improved services much more quickly.

        Ultimately it's hard to say, but I would expect for somebody that isn't currently a major player in the cell phone market to buy T

      • Because T-Mobile's parent company, Deutsche Telekom, wants to sell, AT&T or not.

    • How about Carlos Slim?

    • by fnj ( 64210 )

      Here's an idea. Not every goddam company has to be bought / merged with some fucking shark^H^H^H larger company. How the hell is it in the public interest for companies to go on endless buying binges? The logical end result is going to be THE COMPANY. Want a car? Buy it from THE COMPANY. A milkshake? THE COMPANY. No choice whatsoever; no competition.

      And here's another thought. Company B does not have to be of comparable size to company A to compete with it in the marketplace.

      And why does every company have

  • by __aajwxe560 ( 779189 ) on Tuesday November 22, 2011 @07:31PM (#38142718)
    While TMobile service languishes in some areas, as a subscriber of ~7 years (flipped in years ago after AT&T Cellular last went tits up), while their domestic service presence isn't quite as dominant as Verizon, I enjoy international travel with my cell and a respectable domestic rate versus the competitors that I continue to pray they don't get sucked into the vortex of Verizon, AT&T, and increasingly Sprint of all companies. I have no contract, pay $100 a month for two phones between my wife & I, unlimited text, plenty of voice, and unlimited data on one phone where this seems like a "bargain" (the rest of the developed world laughs at what I consider a good rate).

    What I enjoy for "landline" service (Ooma VOIP "free" $5 a year to cover taxes), the rest of the world enjoys a similar experience for wireless. TMobile seems like the black horse right now, and I rather see them follow through on a merger with Sprint than AT&T, mainly to bring back the third competitor in the pack similar to what was enjoyed in the late 80's/early 90's between MCI, AT&T, and Sprint. That set the bar for me personally where 3 competitors in telecom was a minimum number necessary for what I considered a truly competitive balance where they made their money and I felt I got value for my money. This is necessarily in the telecom space in my humble opinion with how things are looking. If a Verizon and AT&T duopoply were to happen .. watch Sprint disappear (as their coverage contract with Verizon "mysteriously" disappears and their coverage would suck worse than TMobile again) and rates suck ass across the board. The ability to enter the wireless market would continue to entertain higher barriers, so this would be difficult to overcome.
    • I used to have T-Mobile, and loved their customer service. I had to switch for job reasons but I still think about switching back. TM are the only carrier that I have used that wasn't pretty much constantly screwing me around one way or another.

  • Once the business friendly Republicans win more elections, all of this will be reversed. AT&T needs to start bribing / donating some big bucks in that direction to make it happen.

    • Once the business friendly Republicans win more elections

      Are you trying to claim that business-friendly Republicans aren't already running the entire show? You're hilarious, tell me another of your jokes!

  • by Nom du Keyboard ( 633989 ) on Tuesday November 22, 2011 @07:36PM (#38142770)

    "AT&T's plan to merge with T-Mobile just hit a pretty big snag. The FCC declared the merger would be anti-competitive and not in the public interest."

    And it took them how long to figure this out? Most of us knew it in the first 5 minutes.

    • by Fjandr ( 66656 )

      They had to wait for the salary offers to come in from the lobbying jobs they're looking at after their stint with the FCC is up.

  • by Nom du Keyboard ( 633989 ) on Tuesday November 22, 2011 @07:38PM (#38142794)
    And so the T-Mobile girl lives to strut another day.
  • by wierd_w ( 1375923 ) on Tuesday November 22, 2011 @07:43PM (#38142850)

    The reason why allowing att to buy tmobile is "epically, boneheadedly bad for the public interest" is as follows:

    The FCC licensed both tmobiles and atts GSM spectrum as exclusive licenses.

    This means that if you want to use a gsm technology device on internaltionally standardized frequencies in the us, you either use att, or tmobile. (Or one of their downstream sublicensed local carriers.)

    Allowing tmobile and att to merge (given the lopsided nature of such a process though, "buyout" seems more applicable..) would create a single, exclusively licensed "super carrier" that owns the whole standard gsm band, creating a natural monopoly. Historically, natural monopolies have never been in the public's best interest. (See standard oil, bell telephone, etc.)

    Add to that the leaked inside documents showing that the cost of aquisition of tmobile exceeds by a large sum the estimated costs of builing out comparable capacity on att's existing network infrastructure, and also the fact that once att owns tmobile's spectrum license, it can choose to revoke any downstream sublicensing agreements with local gsm carriers that are currently contracted with tmobile.

    The potential for upheval in the already low-diversity market for gsm carriers, the potential for massive job destruction from having licenses pulled, and the omnipresent risk of abusive monopoly pricing with no free market alternative (CDMA is not a valid alternative if you require international operation) is simply and demonstrably unacceptable.

  • The same FCC chair that wants to relax media consolidation rules yet again? With the chairman being the very person that profited by the "Rupert Murdoch" fiasco that led to Fox and Vivendi?

    "He was Chief of Business Operations and a member of Barry Diller's Office of the Chairperson at IAC/InterActiveCorp and executive responsible for the creation of Fox Broadcasting Company and USA Broadcasting. He earned at least $USD2.5 million when Vivendi acquired Universal assets in 2003.[10]" []

  • by kenneth_hk_wong ( 442341 ) on Tuesday November 22, 2011 @09:01PM (#38143536)

    This CDMA vs GSM debate is totally off topic. WRT the merger question, the FCC is totally right. Like AT&T want to do, Rogers did acquire FIDO because this pesky little competitor in the GSM space (Bell and Telus have CDMA networks) dared come out with a very competitive "unlimited" plan (CityFido for those that remember). Friends of mine that were lawyers in this field were shocked that the CRTC allowed this merger to happen. At very least, they thought the CRTC would have used their regulatory authority to impose some undertakings, for example, you must grandfather not only CityFido subscribers, but continue to offer this plan for X number of years. They didn't and the first thing that Rogers did was essentially eliminate the CityFido plans as they had existed.

    Now Canada has among the lowest rates of smartphone/cellphone usage and subcriber base in the world and surprise, among the highest smartphone/cellphone pricing in the world. Just google it and you will see. A survey I saw not long ago put Canada around Peru for cellphone subscription rates. What an embarassment.

    It was a huge battle to bring in a competitor (Wind Mobile) because of the narrow interpretation of the legislation the CRTC used to the benefit of the incumbents. The Canadian market desperately needed new competitors to shake up the market because the incumbents were clearly operating as oligopolists and the regulator was letting it happen unabashed. It took an act of Cabinet to overrule the regulator and though rates have dropped 30% overnight, Wind is not having an easy go at it. The Egyptian financial backer actually regrets jumping into the market. Just google Wind Mobile in the news and you can see for yourself.

    In this case, Canada is not living up to that mythical socialist ideal that so many Americans think we are. In the wireless space we are where the US incumbents want to be if they could buy off the politicians and the regulators. Less competition, more profits!!!! The Canadian wireless market is a textbook example of how certain industries NEED regulators to keep anticompetitive behaviour under control in order to encourage growth and advancement.

    As a Canadian, I used to look longingly at the rapid pace of innovation and the menu of options you have in the US. Mega-mergers like this will take you along the path to where we are in Canada.

    Good luck to you!

  • The FCC should have mandated GSM for the entire U.S. at the outset, as Europe and many other countries did. That would have ensured interoperability, and provided the opportunity for customers to have an actual competitive marketplace. Denial of this merger is going to continue to hobble the U.S. mobile marketplace, and simply leave two strong and one three so-so operators out of four. If the merger goes through, and Verizon subsequently picks off Sprint, then we would have two extremely strong competitors
  • by damn_registrars ( 1103043 ) <> on Tuesday November 22, 2011 @10:10PM (#38144060) Homepage Journal
    I heard that T-Mobile wants to rid themselves of their US division. If it isn't making enough revenue to be kept on the books, it probably isn't doing well enough to stand on its own either. Which likely means it will just fold up completely.

    Hence either T-Mobile is bought out by AT&T and we have one fewer carrier, or T-Mobile goes under and we have one fewer carrier. It seems like we might at least preserve a few jobs with option number one that would otherwise be lost with option number two. The other main carriers don't want to buy a GSM provider, it doesn't make technological sense. They just want a shot at picking off some T-Mobile customers that they might not otherwise get if AT&T buys them out.
  • My wife has a factory unlocked iPhone on T-Mobile. They are the only discount carrier with coverage nationwide, especially outside of metro areas (getting away from Verizon's dropped calls at our home was very welcome).

    AT&T and Verizon either outright block, or charge not so discount rates, for iPhones on their prepaid branches. T-Mobile actively encourages them on prepaid talk / text / data plans that start at $50.

    If this merger goes through, she might have to switch to a windows phone 7 device. At l

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