Many of us have our own concerns about what this AT&T/T-Mobile buy out would mean for the consumers of either service. Many are worried about the price hike of service compared to the low cost of T-Mobile service. Others are concerned with the ensuing lock down of devices that AT&T does to its Android devices. Many see it as a monopoly due to the fact there would no longer be 2 big competitors in the GSM market. All of which are concerns for the Senate too who had a hearing today about the purchase of Magenta.
“When I was a kid,” said Senator Al Franken (D-MN), “every Sunday at exactly 9am in Minnesota, my grandmother would call from New York and talk to my father for precisely three minutes.” It was the only time the two had to talk, but fortunately “the breakup of Ma Bell forever changed the cost of long-distance service.” Now, Franken sees AT&T’s $39 billion bid for T-Mobile as an attempt to put Ma Bell back together again.
“I fear that if approved, the merger would take us one more step toward the monopoly market that we had under Ma Bell,” said Franken, who warned that it was “going to raise prices for American families.”
The heads of both carriers were in attendence at the hearing, so was Sprints Dan Hesse and the head of a rural cell carrier. Dan has been against this deal the moment it was announced and hasn’t been shy about voicing his opposition to it. He had this to say today,  AT&T would gain “significant unchecked leverage to increase prices” and that the deal was “unfixable”.
Sprint and the rural carriers have 3 main concerns about this merger happening.
- Handsets – AT&T and Verizon would be the best position to lock down desirable device deals with manufacturers. Thus making the devices less available to the smaller companies and forcing people to take on contract with one of the two giants.
- Data Roaming – Regional carriers rely heavily on agreements with major carriers to offer national coverage to its customer. AT&T has never played well with others when it comes to sharing. AT&T also holds the only 700MHz spectrum in the country.
- Special Access Issues – When Sprint puts a new tower up, 30% goes to buying landline backhaul to the tower. This is usually provided by AT&T or Verizon. Hesse advised that he could immediately lower Sprints prices if they would offer the backhaul lines at a more manageable term.
Of course none of this was ignored by the guys trying to make this merger happen. They came back saying it would be all upside for the customers.
- Better 850MHz access to AT&T towers; provides much better in-building coverage
- Near-term network quality improvements; both companies use GSM, can quickly merge networks and see better channel polling, control channel efficiencies, etc. This should produce fewer dropped calls and better data downloads
- LTE. “T-Mobile does not have sufficient spectrum to roll out an LTE network,” said its CEO, so long as it has to support existing HSPA+ and GSM. AT&T will make that possible.
- Significantly reduced cost. It “will drive prices down,” T-Mobile promised.
Many senators are very skeptical when it comes to the price factor. Sen. Herb Kohl (D-WI) stated “Four competitors are better than three.” Arguably competition is better then regulations. AT&T comes back at them with the argument that competition does play a role in prices but spectrum availability is a major factor that might actually push prices down. With a larger spectrum access AT&T could possibly lower rates.
I’m fairly certain they wouldn’t do that though. With a merger like this on the table, us T-Mobile users are getting a little antsy. I personally don’t want to end up part of AT&T, but what other choice would I have. I’m not a fan of Verizon nor do I care for Sprint much. That leaves me with more rural carries for service. If I were to go that route though, I would be shooting myself in the foot for the latest and greatest devices.
How do you guys feel about all of this? Are most of you supporting the idea or against it? We want to hear your Pros and Cons.
Source: arstechnica
