Mobile Mugging: The AT&T/T-Mobile Merger

If AT&T is allowed to acquire T-Mobile, just two wireless
giants will control nearly 80 percent of the nation's
cellphone market. 

By Jenn Ettinger
OtherWords
May 31, 2011

http://www.otherwords.org/articles/mobile_mugging

A recent T-Mobile commercial depicts a cellphone customer
being harassed by two thugs in business suits, his pockets
emptied, his wallet turned inside out, and every last penny
shaken out of him. The gist: He's being mugged by T-Mobile's
competitors, which all charge higher prices for less service
than T-Mobile.

Ironically, T-Mobile is now about to be bought up by one of
those muggers. While the commercial is supposed to sell
people on T-Mobile, it really gives us a preview of what we
can expect if AT&T's planned $39-billion purchase of T-Mobile
goes through. If the deal is approved, there's reason to
believe T-Mobile's 33 million customers will have a lot in
common with that mugged customer.

The deal would eliminate a competitor and leave two wireless
giants - AT&T and Verizon - with unprecedented power. The two
companies would control nearly 80 percent of the nation's
cellphone market, spelling bad news for consumers across the
board.

AT&T's service is consistently ranked among the worst of all
cellphone providers, with a history of complaints about
dropped calls, poor reception, and terrible customer service.
Worse, it lures customers into long-term, high-cost contracts
with exorbitant fees and exclusive deals with phone makers.
And, as more of us use our phones to browse the Web or read
email, AT&T no longer offers unlimited data plans. If T-
Mobile customers who like their unlimited talk, text, and
data plans want something like it from AT&T, they'll have to
shell out $50 more every month, with costly penalties for
breaching AT&T's arbitrary limits.

AT&T talks about the benefits of this merger, but for T-
Mobile customers it would mean spending more and getting
less.

T-Mobile has been able to compete in a market dominated by
AT&T and Verizon by offering lower-price services and
innovative new phones - all of it at risk with this merger.
But AT&T has been using its deep pockets to lobby hard for
approval of this takeover, arguing that buying T-Mobile will
help it improve its network. But instead of investing its
record profits to build a better network, the company has
funneled them into its executives' bank accounts. This merger
is about nothing more than eliminating a competitor.

T-Mobile is playing both sides. While its commercials warn
about AT&T and Verizon mugging the American people, its
lobbyists urge Congress to approve the company's merger with
AT&T. On May 10, T-Mobile CEO Philipp Humm testified before a
Senate subcommittee that this merger would increase
competition and "lower prices for all customers." But you
can't have more competition with fewer options. It just
doesn't add up.

At a time when people need to control their spending, AT&T
will force them to dig even deeper into their pockets to pad
its profits.

The Federal Communications Commission and the Department of
Justice are both tasked with reviewing the merger and its
potential impact on public interest and competition in the
wireless market. Eliminating a competitor from the
marketplace certainly doesn't lead to more competition. Both
agencies should recognize that this merger will ultimately
lead to higher prices and fewer choices for all wireless
customers. 

This work is licensed under a Creative Commons License

[Jenn Ettinger is the media coordinator for Free Press, a
national, nonpartisan, nonprofit organization dedicated to
reforming the media.]

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