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Senator asks FCC and DOJ to examine AT&T's purchase of T-Mobile

post #1 of 20
Thread Starter 
Minnesota Senator Amy Klobuchar has requested that Federal Communications Commission and the Department of Justice examine AT&Ts proposed acquisition of T-Mobile "to ensure it does not limit competition and that consumers not face higher prices or reduced services as a result."

In a letter to the two agencies, Klobuchar noted that after acquiring T-Mobile, AT&T would serve 42 percent of US wireless subscribers, reducing the top four carriers to three.

Combined with its primary competitor Verizon Wireless, the top two US carriers would control 73 percent of the American market.

"Although this deal may spark innovation in the wireless industry," Klobuchar wrote, "I remain concerned that increased concentration will, at the same time, lead to fewer choices, higher prices and reduced service for wireless consumers."

Klobuchar added, "I urge you to take a close, hard look at this proposed acquisition and ensure that consumers are provided with adequate choice in the wireless market."

Conservative Heartland Institute says "don't dither"

At the same time, Bruce Edward Walker of the Heartland Institute wrote, "one hopes the Federal Communications Commission doesnt dither over the T-Mobile/AT&T deal to the extent it did over the Comcast/NBCU merger last year. In the latter instance, the FCC stalled and delayed a determination for nearly a year in order to eke out ridiculous concessions that had no bearing whatsoever on the FCCs authority in the matter.

"Most of the FCCs concerns were in fact within the purview of the Department of Justice and employed as nothing more than an unnecessary redundancy used to further expand the commissions draconian regulatory agenda."

A solution for two struggling carriers

T-Mobile's poor performance began shortly after Apple released the iPhone, which drew significant subscribers to AT&T and created greater awareness of smartphones among mainstream users. T-Mobile had been capitalizing on Sidekick devices, which offered text-centric mobile communications at cheaper data rates, albeit lacking the multitouch features and web browser savvy of the iPhone.

Deutsche Telecom had been rumored to be in talks with Sprint, a deal that conceptually would have bolstered the weakest two carriers of the top four, creating a third major player to take on AT&T and Verizon. However, Sprint and T-Mobile lack much in common, particularly in their current and future wireless technologies. Sprint had earlier partnered with Nextel in a similar merger of incompatibility, without much success.

AT&T grew interested in T-Mobile after finding it difficult to line up enough bandwidth to maintain its existing customers while working on a future network capable of keeping pace with the increasing demands of its subscribers. AT&T as a carrier is an amalgam of various GSM providers originally named Cingular, and only rebranded as AT&T after signing on to carry the iPhone in an exclusive deal with Apple in 2007.

AT&T has struggled to keep pace with its main rival Verizon, which had began building out its own 3G network years earlier. Verizon is now beginning to build out a new LTE data network which will be usable by some new phones by the second half of the year. AT&T has its own LTE plans, but in the interim hopes to expand its existing HSPA and HSPA+ networks, which are backwardly compatible with existing phones including iPhone 4.

Better use of T-Mobile's network capacity

T-Mobile is currently strongly disadvantaged as a carrier because its 3G network uses AWS spectrum (UMTS band IV), the oddball, US-only 1700/2100 MHz band T-Mobile uses for its existing 3G service and which it planed to build out nationally as HSPA+. This prevents T-Mobile from benefiting from economies of scale in obtaining popular phones (including Apple's iPhone), given that it only has 35 million subscribers. T-Mobile has also suffered from subscriber churn as customers come and go, forcing it to offer lower costs plans that are not profitable.

By acquiring T-Mobile, AT&T hopes to initially jointly service both carriers' subscribers with shared infrastructure, then transition T-Mobile's customers to its own expanded 3G/HSPA+ network, eventually transitioning T-Mobile's AWS spectrum for use in carrying future LTE service to suburban and rural areas. AT&T already has plans in place to build out urban LTE service using 700MHz spectrum it acquired from Qualcomm.

This shift would dramatically speed up America's mobile capacity, putting it on par with what Europe has had for a few years. It would also put T-Mobile's AWS spectrum to more effective use, rather than building an additional, non-standard set train tracks to every city in the US. It would give hardware makers like Apple a solid, robust, nationwide GSM/3G/HSPA+ network in the short term, and a nationwide LTE network in the long term (and years sooner than otherwise).

Further, once Verizon and AT&T are both operating LTE networks, the major US carriers will finally be capable of roaming their subscribers between the two company's networks, as long as phones are designed to make use of the bands LTE will use.

post #2 of 20
Corporations always do what is best for the citizens who pay for their corporate tax breaks. Oversight is unnecessary
post #3 of 20
I really hope this merger is allowed to happen as soon as possible. I don't think that I should take much to hammer out some specifics that would guarantee that consumers benefit out of this deal. I understand some of the worry over competition, but the fact remains that customers are demanding better service and lower prices, while consuming ever increasing bandwidth. This deal is an incredible opportunity to get the technology customers are in need of, deployed as fast as possible.
post #4 of 20
The DOJ and FTC investigate and approve/deny mergers as matter of policy and law. Nobody has to ask them to do it. This is just a political stunt by an unknown politician.
post #5 of 20
How about the Senator ask the Feds to remove all the taxes from my telecommunications bills!? Provide some relief in a down economy -- now THERE would be an idea!
post #6 of 20
"Further, once Verizon and AT&T are both operating LTE networks, the major US carriers will finally be capable of roaming their subscribers between the two company's networks, as long as phones are designed to make use of the bands LTE will use."

I call this: DUOPOL. Two carriers will make agreement to keep prices up, the others will have no chance to compete. I have seen this in my country of origin where Orange and T-Mobile had a similar agreement for few years and the prices for having wireless phone were 2-3x higher than in the neighboring countries. They dropped only after long battle for license O2 came into the market (those two carriers bribed politicians to not allow another carrier in the market) but even after O2 started it was struggling for several years because interconnecting fees into Orange and T-Mobile networks were set by those two providers so high O2 could not make any profit (and while majority of population was with those 2 carriers O2 had a hard time to compete). Those 2 carriers have also bribed politicians not to touch this status until recently European Union finally kicked our government's ass and ordered fair interconnecting fees. The Monopoly or Duopoly never cares about common good, they care only about themselves and their profits. Here in USA it will be the other way - two major carriers will slowly push other smaller ones into the dust and split the market in half while dictating the prices and one can bet a million bucks those prices will stay sky high.
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Marquiz d' Gabber von Gabberaarde

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post #7 of 20
I hope they ask AT&T how charging extra for tethering is a valid charge. The software to enable tethering was not written by AT&T and runs on the customer's device. When a laptop uses the Personal Hotspot, it is not doing anything that the iPhone doesn't do itself (use 3G data bandwidth).

I can see AT&T charging for extra bandwidth, but charging extra just to use the bandwidth that has already been purchased for the iPhone just is gauging. All AT&T is interested in is getting an extra $30 a month for providing nothing.

I only would use laptop tethering occasionally and therefore find AT&T's pricing anti-consumer. I hope the government makes them commit to not engaging in monopoly pricing policies.
post #8 of 20
Didn't the FCC and DOJ already do this before the merger was announced?
post #9 of 20
LOL. I have used AT&T, Verizon, and T-Mobile. What we need is competition. T-Mobile and Sprint are hungry because they are the little dogs. Consequently, their service and pricing is better. I currently can get more variety for less at T-Mobile. Further, in Ann Arbor the mount of dropped calls is less compared to my friends using iPhones on AT&T. Not all customers want cell broadband. My iPhone is happy with WI-Fi.

AT&T buying T-Mobile will kill innovation because AT&T will only have to attend with Verizon. They will do a wink at each other when the other decides to offer less for more and the other will soon fall suit.

In France, citizens would be out in the streets tipping over vehicles. In American, we ask to be raped more. The airwaves companies like AT&T use are owned by the public. The government gives these companies a limited monopoly for next to no money for the privilege of sucking us dry.



Quote:
Originally Posted by hlfnlsn View Post

I really hope this merger is allowed to happen as soon as possible. I don't think that I should take much to hammer out some specifics that would guarantee that consumers benefit out of this deal. I understand some of the worry over competition, but the fact remains that customers are demanding better service and lower prices, while consuming ever increasing bandwidth. This deal is an incredible opportunity to get the technology customers are in need of, deployed as fast as possible.
post #10 of 20
Actually Senator Rockefeller did the same thing. YOu have heard of Rockefeller right? When a senator asks, it puts pressure on the FCC to try to make an investigation actually fair as opposed to a rubber stamp.

Quote:
Originally Posted by lkrupp View Post

The DOJ and FTC investigate and approve/deny mergers as matter of policy and law. Nobody has to ask them to do it. This is just a political stunt by an unknown politician.
post #11 of 20
This is a political stunt, hurry up and just approve this, it is going to help so many of us in so many ways. Why does it take the government so long to approve this stuff it should take days, do your job government and stop hanging out with lobbyists and going to fundraising parties.
post #12 of 20
If you think this is going to help you, maybe in the short term, but definitely NOT in the long term. When 2 companies control so much of the market, they'll squeeze the customers for money and cut service. This is almost as bad as a monopoly. The more carriers on a more even playing field, the better off the customers are. It's called competition.
post #13 of 20

In the event the transaction does not receive regulatory approval satisfactory to AT&T and the transaction does not close, AT&T will be required to pay a breakup fee of $3 (billion), transfer to T-Mobile certain AWS spectrum that is not needed by AT&T for its initial LTE roll out, and provide a roaming agreement to T-Mobile on terms favorable to both parties,

http://mobilized.allthingsd.com/2011...nt-go-through/ Hmm Could Deutsche Telekom be playing AT&T?
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post #14 of 20
Quote:
Originally Posted by lkrupp View Post

The DOJ and FTC investigate and approve/deny mergers as matter of policy and law. Nobody has to ask them to do it. This is just a political stunt by an unknown politician.

They do when they want some press that makes em look like they care about the great unwashed masses....
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post #15 of 20
Quote:
Originally Posted by AppleInsider View Post

Minnesota Senator Amy Klobuchar has requested that Federal Communications Commission and the Department of Justice examine AT&Ts proposed acquisition of T-Mobile "to ensure it does not limit competition and that consumers not face higher prices or reduced services as a result."

Somebody *coughSenatorAmy* was on T-Mobile
lol
post #16 of 20
Quote:
Originally Posted by hlfnlsn View Post

I really hope this merger is allowed to happen as soon as possible. I don't think that I should take much to hammer out some specifics that would guarantee that consumers benefit out of this deal. I understand some of the worry over competition, but the fact remains that customers are demanding better service and lower prices, while consuming ever increasing bandwidth. This deal is an incredible opportunity to get the technology customers are in need of, deployed as fast as possible.

If you want more coverage and better service --- then go to a carrier with more coverage and better service. You want the most bad-ass 4G technology, then go to Verizon's LTE network.

It was AT&T's choice not to spend a lot of money on the last spectrum auction --- Verizon spent $4 billion MORE on the 700 MHz auction. It was AT&T's choice not to match Verizon's coverage. It was AT&T's choice not to match Verizon's LTE deployment schedule.

3 national carriers --- give you my country, Canada. Land of the 3 year contract, $720 ETF and one of the most idiotic original iphone contract plan (only after widespread internet outrage forced Rogers Wireless to back down on the iphone contract plan).

Quote:
Originally Posted by TBell View Post

In France, citizens would be out in the streets tipping over vehicles. In American, we ask to be raped more. The airwaves companies like AT&T use are owned by the public. The government gives these companies a limited monopoly for next to no money for the privilege of sucking us dry.

In France, there are only 3 national carriers. The French government only auctioned out the fourth license last year (which the winner hasn't deployed a network yet).

French anti-trust is all show and no substance. So what if the French regulators outlaw iphone exclusivity and forced the carriers to unlock your phone after 12 months, you are screwed because there are only 3 national carriers. You go to the other 2 carriers, they charge even more money.
post #17 of 20
Quote:
Originally Posted by samab View Post

If you want more coverage and better service --- then go to a carrier with more coverage and better service. You want the most bad-ass 4G technology, then go to Verizon's LTE network.

It was AT&T's choice not to spend a lot of money on the last spectrum auction --- Verizon spent $4 billion MORE on the 700 MHz auction. It was AT&T's choice not to match Verizon's coverage. It was AT&T's choice not to match Verizon's LTE deployment schedule.

3 national carriers --- give you my country, Canada. Land of the 3 year contract, $720 ETF and one of the most idiotic original iphone contract plan (only after widespread internet outrage forced Rogers Wireless to back down on the iphone contract plan).



In France, there are only 3 national carriers. The French government only auctioned out the fourth license last year (which the winner hasn't deployed a network yet).

French anti-trust is all show and no substance. So what if the French regulators outlaw iphone exclusivity and forced the carriers to unlock your phone after 12 months, you are screwed because there are only 3 national carriers. You go to the other 2 carriers, they charge even more money.

At&t&t should be forced to agree to some price caps and a timetable for a lte rollout. If AT&T&t doesn't have 4g by a certain time etc... They should be broken up. Verizon's 4g is amazingly fast. However it is a battery drain no doubt...one only has to look to the thunderbolt's 3.5 hour battery life as evidence.
post #18 of 20
Quote:
Originally Posted by AdonisSMU View Post

At&t&t should be forced to agree to some price caps and a timetable for a lte rollout. If AT&T&t doesn't have 4g by a certain time etc... They should be broken up. Verizon's 4g is amazingly fast. However it is a battery drain no doubt...one only has to look to the thunderbolt's 3.5 hour battery life as evidence.

Won't work.

Did you see Verizon's share price on Monday? In terms of percentages, VZ went up even more than AT&T. VZ can charge more now that there is one less competitor --- and you can't prevent AT&T from charging the same price as VZ.

This merger will take maybe 18 months to get approved --- by that time VZ will have the whole country plastered with LTE.

You can go and look at all the iphone plans around the world --- the magic number is 4 national carriers. If you have 4 national carriers (or more), you can get good iphone plans. If you have 3 national carriers (or less), you are screwed.
post #19 of 20
Quote:
Originally Posted by samab View Post

You can go and look at all the iphone plans around the world --- the magic number is 4 national carriers. If you have 4 national carriers (or more), you can get good iphone plans. If you have 3 national carriers (or less), you are screwed.

And if you have two? Well, I guess you're just paying more for less. One, well, then you might as well say there is no competition because, well, there wouldn't be. But I doubt things will get that far, unless the government really doesn't care about the country it governs anymore.
post #20 of 20
Quote:
Originally Posted by KT Walrus View Post

I hope they ask AT&T how charging extra for tethering is a valid charge. The software to enable tethering was not written by AT&T and runs on the customer's device. When a laptop uses the Personal Hotspot, it is not doing anything that the iPhone doesn't do itself (use 3G data bandwidth).

I can see AT&T charging for extra bandwidth, but charging extra just to use the bandwidth that has already been purchased for the iPhone just is gauging. All AT&T is interested in is getting an extra $30 a month for providing nothing.

I only would use laptop tethering occasionally and therefore find AT&T's pricing anti-consumer. I hope the government makes them commit to not engaging in monopoly pricing policies.

Facts are a funny thing. AT&T charges $20 for tethering and provides an additional 2GB under the tethering plan.
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