Fans, Foes Weigh In On Proposed AT&T-Mobile
Deal is either unthinkable or a net gain for consumers
John Eggerton -- Broadcasting & Cable, 3/20/2011 9:45:12 PM
Fans and foes of the announced AT&T/T-Mobile merger interrupted their weekends to weigh in on AT&T's proposed $39B play for a major competitor.
"The combination of the second-largest wireless carrier, AT&T, with the fourth-largest, T-Mobile is, as former FCC Chairman Reed Hundt once said, 'unthinkable,'" said Public Knowledge President Gigi Sohn. "We urge policymakers to think similarly today. The wireless market, now dominated by four big companies, would have only three at the top. We know the results of arrangements like this - higher prices, fewer choices, less innovation.
"The FCC's National Broadband Plan, issued last year, warned about the absence of sufficient competition in the wireless market. The possibility that three players would control nearly three-quarters of that market will surely trigger intense scrutiny by the agencies," said Andrew Schwartzman of Media Access Project.
"Don't believe the hype: There is nothing about having less competition that will benefit wireless consumers," said Free Press Research Director Derek Turner. "And if regulators approve this deal, they will further cement duopoly control over the wireless market by AT&T and Verizon."
Rep. Anna Eshoo (D-Calif.), ranking member of the House Energy & Commerce Committee's Communications Subcommittee said she looked forward to oversight hearings on the deal and urged the FCC and Justice to examine it carefully. For his part, Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.) signaled there would be hearings, and said government merger reviews should leave "no stone unturned."
"In an "idealized" marketplace, the more competitors the better, said Randolph May of free market think tank the Free State Foundation. But the telecom marketplace is not an idealized market. It is one that requires huge ongoing capital investments to build broadband networks that deliver ever more bandwidth for the ever more bandwidth-intensive, innovative services consumers are demanding," "My preliminary sense is that the benefits from the proposed merger, with the promise of enhanced 4G network capabilities implemented more quickly than otherwise would be the case, outweigh the costs. Even after the merger, the wireless market should remain effectively competitive with the companies that remain."
"Wireless acquisitions over the course of the past decade have not led to price increases for consumers and, in fact, the statistics show that prices have declined during this period," said Debra Berlyn, director of the Consumer Awareness Project. "While some consumer voices have focused on the loss of a wireless competitor in relation to AT&T's recently announced plans to acquire T-Mobile USA, the news for consumers should be seen in another light with a focus on the benefits that this merger can bring to consumers across the U.S."
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