Wireless Monopolies Offer Little Promise For Free Market Enterprise

Just over a week ago, the $39 billion merger between AT&T and Deutsche Telekom’s T-Mobile was announced to a torpid audience of hungry bandwidth and Internet users.  In spite of the fact that as Jenna Wortham of the NY Times says, “It could save the companies a lot of money.  For everyone else, it could cost a lot of money.”  Everyone knows it will fly through the regulators of such mergers faster than Bernie Madoff’s $7,000 slippers got picked up at auction.  Once it goes through, and it will go through, it will leave U.S. wireless users with only three major carriers for service.  The argument from AT&T is that it provides performance enhancements such as an expanded LTE footprint and will increase their customer tally to about 130 million users.

Depending on whom you ask, once this goes through AT&T and Verizon, with 102 million users, will control between 70% to 80% of the market.  The third player here is Sprint Nextel with 49 million users, and they are not happy at all.  Though Sprint’s offer to buy T-Mobile has not been confirmed, Charles McKee, Sprint’s (NYSE: S) vice president of governmental affairs-federal and state regulatory, said the company would formally ask for the deal’s termination once AT&T files its application with the Federal Communications Commission, possibly as soon as next month, adding, “We think fundamentally that this transaction is so anti-competitive that there’s no way to fix it that doesn’t result in harm to consumers and the economy.”  McKee fails to mention that this is like a hatchet in the head for Sprint and may eliminate their ability to deal with hand set manufacturers or compete on advertising deals.

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Signs You Need to Buy a New Phone System
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The deal will purportedly fly through because President Obama has been promised coverage for rural spots and for underprivileged households.  His failure to oppose this and his administration’s deal for more coverage may be a bit of a reach for an administration that has done little before now to provide competition in the market and for the consumer.  Only time will tell, but as telephone companies go, this is sure to drain the wallets of millions of consumers and eliminate the need for new services yet to be seen.

Tek-Tips
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