or Connect
AppleInsider › Forums › General › General Discussion › FCC chairman finds AT&T, T-Mobile merger not in public interest, seeks hearing
New Posts  All Forums:Forum Nav:

FCC chairman finds AT&T, T-Mobile merger not in public interest, seeks hearing

post #1 of 30
Thread Starter 
AT&T's proposed acquisition of competitor T-Mobile has been found by the FCC's chairman to be anticompetitive and not in the public interest, asks commissioners to vote for administrative hearing.

The chairman of the U.S. Federal Communications Commission, Julius Genachowski, released a draft order on Tuesday asking the other four commissioners to call an administrative hearing, saying that he found AT&T's proposed $39 billion deal to acquire rival T-Mobile contrary to the public interest, reports CNET.

Were the hearing to be approved, it would be yet another hurdle for the two telecoms to overcome as they currently face an antitrust suit from the U.S. Department of Justice. The onus would be on AT&T to prove that its purchase of T-Mobile would not create a possible duopoly in the wireless market, and refute claims that such an acquisition would negatively affect the American people.

However, FCC officials say that it is impossible to see how the merger would possibly serve the public, going on to note that it would create the largest single concentration U.S. mobile market in history.

"The FCC's action today is disappointing," said AT&T Senior Vice President of Corporate Communications Larry Solomon. "It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both."

An analysis conducted by FCC staff shows that the both telecoms have a dense population of customers in 99 out of the top 100 major U.S. markets, claiming that a merger would bring an "unprecedented" level of concentration to the wireless landscape.

The FCC report counters claims made by AT&T saying that the move would generate jobs and help the company roll out its 4G LTE network, noting that jobs would in fact be lost as redundant positions are cut. The commission also did not find evidence that a buyout would help hasten any proposed 4G broadband rollout.

FCC Chairman Julius Genachowski

The merger has seen strong resistance from Sprint, the nation's third-largest carrier, that culminated in a formal petition filed with the FCC in May protesting the acquisition.

Verizon, on the other hand, described AT&Ts acquisition of T-Mobile as inevitable, saying the government needs to pass legislation that solves an underlying problem of a limited wireless spectrum before regulating telecom mergers.

An administrative hearing is a rare occurence for the FCC, the most recent being the 2002 EchoStar/DirecTV merger, which ultimately ended in a scrapped deal.

If the four commissioners approve the hearing, it would have to wait until the conclusion of the DOJ trial, which is currently set to start in February 2012. If AT&T settles that case, the company would have to refile with the FCC, which would then reevaluate the new terms.
post #2 of 30
I personally think that the larger a company gets the more disconnected from their customers they become. ATT merger with T-Mobile may bring the end to Sprint. Verizon should buy Sprint and ATT buy T-Mobile. Its inevitable.
An Apple man since 1977
Reply
An Apple man since 1977
Reply
post #3 of 30
Quote:
Originally Posted by AppleInsider View Post

"contrary to the public interest"

"serve the public"

So what are stock holders and customers for? Companies that do not serve their customers go out of business. Is this deal breaking anti-trust law? Are the colluding? I goess the public interest is better served with t-mobile just going out of business and we can all pay for the bankruptcy proceedings.
post #4 of 30
Youre asking questions that go beyond the prevue of the FCC. They are looking at the effects of the telecommunications industry as a whole. Anti-trist and collusion are under the pervue of the FTC.
post #5 of 30
Quote:
Originally Posted by ChristophB View Post

So what are stock holders and customers for? Companies that do not serve their customers go out of business. Is this deal breaking anti-trust law? Are the colluding? I goess the public interest is better served with t-mobile just going out of business and we can all pay for the bankruptcy proceedings.

Why should a monopoly 'serve its customers'?

Now if they would only pay as much as attention to the NBC/Comcast travesty.
post #6 of 30
T-Mobile will probably be sold anyway, and in all likelihood, for much less, if this deal does not go through.

I suppose that will serve the 'public interest'......
post #7 of 30
Quote:
Originally Posted by diddy View Post

Youre asking questions that go beyond the prevue of the FCC. They are looking at the effects of the telecommunications industry as a whole. Anti-trist and collusion are under the pervue of the FTC.

The FCC is a racket looking to get paid off. No laws broken. None pointed out that could potentially be broken (and you can't be convicted of might commit a crime in the future). No rules broken. I can't wait to see the list of "concessions" they are going to demand from the owners of both companies.
post #8 of 30
Quote:
Originally Posted by GQB View Post

Why should a monopoly 'serve its customers'?.

What monopoly? The only one I see here is US Gov and its v. Marketplace.
post #9 of 30
Quote:
Originally Posted by tylerk36 View Post

I personally think that the larger a company gets the more disconnected from their customers they become.


Isn't Apple the largest company in the world?

post #10 of 30
Quote:
Originally Posted by ConradJoe View Post

Isn't Apple the largest company in the world?

Largest public by market cap.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
Reply
post #11 of 30
Quote:
Originally Posted by anantksundaram View Post

T-Mobile will probably be sold anyway, and in all likelihood, for much less, if this deal does not go through.

I suppose that will serve the 'public interest'......

T-mobile being sold for less than ATT is paying is certainly more in the public interest than ATT buying it. You are aware that a company that is sold generally still operates, right? And if Deutsche Telecom receives less money in exchange, the American people are supposed to be sad?
post #12 of 30
The problem with your assessment is it rests on AT&T building itself up on its own dime using its own resources. The reality is AT&T build itself up originally on a government granted monopoly, and then partly on government subsidies, using licensed airwaves from the government. Furthermore, many local governments have given AT&T a monopoly in services such as DSL. AT&T has a history of buying companies only to raise the cost of service to the customers of the purchased company.

T-Mobile as well owes its existence to an inexpensive license it acquired from the government to have exclusive use over a certain spectrum of public airwaves. Since the rest of the public lost its right to use it's airwaves, the use of public airwaves is supposed to benefit the public.

AT&T wants 4 billion dollars worth of spectrum, but is willing to over pay T-Mobile for the four billion worth of spectrum by paying it 39 billion dollars. According to AT&T's own internal documents, it plans to eliminate redundancy and eventually move T-Mobile customers to its higher paying plans. That doesn't seem in the public interest, and isn't a proper use of the public's airwaves.

Further, you have bought the whole T-Mobile is in trouble BS. According to T-Mobile's financial reports, T-Mobile is raking in billions in profit annually. It is in the black and not close to being in the red. According to the parent company, the US market is the most promising portion of its business because of the rapid acceleration of consumers to higher paying smartphone plans. Further, if the deal doesn't go through, AT&T is going to be paying T-Mobile some big dollars, which T-Mobile will get to invest in services. Again according to T-Mobile, its biggest problem is not having the iPhone. Once this proposed sale is killed, T-Mobile will likely be able to convince Apple to bring T-Mobile on board. Apple isn't going to incorporate a T-Mobile antennae into its phone if the company isn't going to be converted to the AT&T network. That would cost Apple development costs, that might not be recouped.

The Department of Justice's job is too make sure a publicly traded company doesn't engage in anti-competitive behavior. Buying an eighth of the market when it already owns about three eighths of the market puts most of the wireless market in two companies hands.

The government gave T-Mobile a non-transferable license to use the airwaves. To transfer the license T-Mobile needs government permission. T-Mobile hires about 40, 000 people in the US. It has over thirty million subscribers. If AT&T buys T-Mobile most of the T-Mobile employees will be put in the unemployment line, where you and I the taxpayer get to pay unemployment benefits for the next couple of years (in today's economy). The higher paying employees will likely be giving up things such as homes because in today's economy there is very little replacement work. Further, we will get to see all the abandoned T-Mobile stores join other abandoned stores, along with related local taxes, which help pay for things education, public safety, and other essential services. Moreover, overnight AT&T is given a monopoly on the GSM network, where people using expensive GSM handsets on T-Mobile have nowhere to go without having to buy a new handset.

This proposed deal stinks, and I am happy that the government is finally being pressured to act in the public's interest, and not yielding to the corporate lobbyists who normally would be buying off all the relevant government officials with promises of high paying jobs in the near future. If the lobbyist are failing in this regard, the opposition has to be incredibly strong.


Ps:

As a bankruptcy attorney, I can tell you the company filing the bankruptcy gets to pay for the bankruptcy. Further, T-Mobile is profitable and is too liquid to file bankruptcy.


Quote:
Originally Posted by ChristophB View Post

So what are stock holders and customers for? Companies that do not serve their customers go out of business. Is this deal breaking anti-trust law? Are the colluding? I goess the public interest is better served with t-mobile just going out of business and we can all pay for the bankruptcy proceedings.
post #13 of 30
The one that will be created when people such as myself who own expensive unlocked iPhones running on the T-Mobile network cannot take those expensive unlocked iPhones and go to a different carrier because these phones will only work on T-Mobile or AT&T's networks.

Quote:
Originally Posted by ChristophB View Post

What monopoly? The only one I see here is US Gov and its v. Marketplace.
post #14 of 30
Quote:
Originally Posted by cameronj View Post

You are aware that a company that is sold generally still operates, right?

Wow! You don't say.....! I am so impressed by your erudition!
post #15 of 30
Quote:
Originally Posted by anantksundaram View Post

Wow! You don't say.....! I am so impressed by your erudition!

Then explain why you thought being sold to someone other than ATT for a lower price would somehow be harmful to consumers. Keeping an additional competitor around with lower prices, and who can still make a profit. Doesn't seem bad for consumers to me.
post #16 of 30
Quote:
Originally Posted by cameronj View Post

Then explain why you thought being sold to someone other than ATT for a lower price would somehow be harmful to consumers. Keeping an additional competitor around with lower prices, and who can still make a profit. Doesn't seem bad for consumers to me.

So, you want to maximize consumer surplus.

Well, then what you're proposing is that assets be sold to the lowest bidder, no?
post #17 of 30
Quote:
Originally Posted by GQB View Post

Why should a monopoly 'serve its customers'?

Monopoly? So much for that big red map of the USA claiming "it's the network" that Verizon is always touting.

Sprint is just whining because they'll be last among the three national carriers, but how many regional carriers are out there to serve the people and who hook up with the national carriers for expanded coverage, albeit roaming. When the iPhone was offered to US Cellular and C-Spire, neither of which is in my locale (but nTelos is) so I never heard of these players in the telecom field until reading posts here in the Apple blogosphere.

The airlines are similar in that they have the big boys, some who are bigger than others, and in fact still consolidating through mergers like United and Continental. Then there are semi-national or regional ones like Southwest and Jet Blue, then there are multitudes of smaller regionals. Why is United and Continental being allowed to merge when every argument applied to the ATT/T-Mobile deal can be applied... 'monopoly' in certain cities and airport gates, reduction of flights due to overlap, loss of jobs because of redundancy... I think this government should butt out and apply Coolidge's perspective that "the business of America, is business"!
/
/
/

Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

Reply

Ten years ago, we had Steve Jobs, Bob Hope and Johnny Cash.  Today we have no Jobs, no Hope and no Cash.

Reply
post #18 of 30
Quote:
Originally Posted by TBell View Post

The problem with your assessment is it rests on AT&T building itself up on its own dime using its own resources. The reality is AT&T build itself up originally on a government granted monopoly, and then partly on government subsidies, using licensed airwaves from the government. Furthermore, many local governments have given AT&T a monopoly in services such as DSL. AT&T has a history of buying companies only to raise the cost of service to the customers of the purchased company.

T-Mobile as well owes its existence to an inexpensive license it acquired from the government to have exclusive use over a certain spectrum of public airwaves. Since the rest of the public lost its right to use it's airwaves, the use of public airwaves is supposed to benefit the public.

AT&T wants 4 billion dollars worth of spectrum, but is willing to over pay T-Mobile for the four billion worth of spectrum by paying it 39 billion dollars. According to AT&T's own internal documents, it plans to eliminate redundancy and eventually move T-Mobile customers to its higher paying plans. That doesn't seem in the public interest, and isn't a proper use of the public's airwaves.

Further, you have bought the whole T-Mobile is in trouble BS. According to T-Mobile's financial reports, T-Mobile is raking in billions in profit annually. It is in the black and not close to being in the red. According to the parent company, the US market is the most promising portion of its business because of the rapid acceleration of consumers to higher paying smartphone plans. Further, if the deal doesn't go through, AT&T is going to be paying T-Mobile some big dollars, which T-Mobile will get to invest in services. Again according to T-Mobile, its biggest problem is not having the iPhone. Once this proposed sale is killed, T-Mobile will likely be able to convince Apple to bring T-Mobile on board. Apple isn't going to incorporate a T-Mobile antennae into its phone if the company isn't going to be converted to the AT&T network. That would cost Apple development costs, that might not be recouped.

The Department of Justice's job is too make sure a publicly traded company doesn't engage in anti-competitive behavior. Buying an eighth of the market when it already owns about three eighths of the market puts most of the wireless market in two companies hands.

The government gave T-Mobile a non-transferable license to use the airwaves. To transfer the license T-Mobile needs government permission. T-Mobile hires about 40, 000 people in the US. It has over thirty million subscribers. If AT&T buys T-Mobile most of the T-Mobile employees will be put in the unemployment line, where you and I the taxpayer get to pay unemployment benefits for the next couple of years (in today's economy). The higher paying employees will likely be giving up things such as homes because in today's economy there is very little replacement work. Further, we will get to see all the abandoned T-Mobile stores join other abandoned stores, along with related local taxes, which help pay for things education, public safety, and other essential services. Moreover, overnight AT&T is given a monopoly on the GSM network, where people using expensive GSM handsets on T-Mobile have nowhere to go without having to buy a new handset.

This proposed deal stinks, and I am happy that the government is finally being pressured to act in the public's interest, and not yielding to the corporate lobbyists who normally would be buying off all the relevant government officials with promises of high paying jobs in the near future. If the lobbyist are failing in this regard, the opposition has to be incredibly strong.


Ps:

As a bankruptcy attorney, I can tell you the company filing the bankruptcy gets to pay for the bankruptcy. Further, T-Mobile is profitable and is too liquid to file bankruptcy.

You might be insane. Seek treatment. Today's AT&T is Southwestern Bell aka SBC buying the AT&T long haul and wireless replacing AT&T wireless with their Cingular. Verizon even bought up parts of the oringal Ma'Bell broken up by the central planning committee you hold pure. Forget it. Go back to reading the works of Marx.
post #19 of 30
Quote:
Originally Posted by anantksundaram View Post

So, you want to maximize consumer surplus.

Well, then what you're proposing is that assets be sold to the lowest bidder, no?

Quote:
Originally Posted by Tallest Skil View Post

Largest public by market cap.

Publicly traded != Public
post #20 of 30
Quote:
Originally Posted by TBell View Post

The one that will be created when people such as myself who own expensive unlocked iPhones running on the T-Mobile network cannot take those expensive unlocked iPhones and go to a different carrier because these phones will only work on T-Mobile or AT&T's networks.

Redefine monopoly as you see fit. Perhaps a seat is available on the politburo.
post #21 of 30
Let's be honest. The FCC commissioners really dig the T-Mobile girl.
post #22 of 30
Good! There is already too little competition in the US mobile phone industry. This takeover, if it were to go through, would result in consumers paying higher prices for lower quality services.
Mac user since August 1983.
Reply
Mac user since August 1983.
Reply
post #23 of 30
I find the FCC is not in the public interest...

Can we abolish the FCC?
post #24 of 30
So the FCC won't let me be
or let me be me, so let me see
They try to shut me down on ATT
But it feels so empty, without me
So, come on and dip, bum on your lips
F*** that, cum on your lips, and some on your tits
And get ready, cause this 4G's about to get heavy
I just settled all my lawsuits, F*** YOU FCC!
post #25 of 30
Quote:
Originally Posted by libertyforall View Post

I find the FCC is not in the public interest...

Can we abolish the FCC?

Indeed. What the heck has it done for you lately? Nothing? Bingo. It's like the "Electrical Products & Safety Commission" in my birth country. The iPod touch launch was delayed because they had to "approve" it (after, oh, the US, UK, Australia, Singapore all approved the EXACT SAME MODEL). Moreover, no offence to Muslims, but it was Ramadhan time so things somehow moved a little slower... I suppose kinda like Christmas in Western countries when everybody's in "holiday" mood.

And that's only the officially imported stuff and local products. They have virtually zero regulation over grey market imports, just like the FCC I'm sure has not much control over grey market imports into the US.

These are essentially monolithic anachronisms that just waste time, money and all kinds of essential resources.

As some have agreed, the FCC screwed the pooch and invalidated themselves when they messed up 3G and 4G spectrum allocations. They should have gone with the model of most countries, whereby 3G and 4G world-standard spectrum is auctioned to allow a few major players to have equal access to said spectrum. This way, the telcos are not wasting resources competing among themselves too much but also having ability to develop, import and export products and services that are compatible with the rest of the world**. It's also, *cough* better for competition because if you also disallow carrier-locking, then consumers have the best choice of phones, carriers and international options when travelling.

Instead, what do we get? Carrier locking continued unabated, carrier crapware forced upon users, incompatible spectrums, incompatible phones, lack of spectrum, patchwork coverage, patchwork mobile protocols, and so on. Tell me where are the benefits for consumers? Where is the real competition?

Until Apple the telco industry was one of the most bloated, arrogant and clueless industries in the US. What exactly has the FCC done?

**Motorola's CDMA-exclusives eg. cost them global growth, among other things. If the Droid was not CDMA-Verizon-whatever-exclusive it could have at least come out swinging against Samsung and Apple all around the world. Instead, "Bye Bye Moto"... to cruelly paraphrase their famous ads.
post #26 of 30
Quote:
Originally Posted by ChristophB View Post

You might be insane. Seek treatment. Today's AT&T is Southwestern Bell aka SBC buying the AT&T long haul and wireless replacing AT&T wireless with their Cingular. Verizon even bought up parts of the oringal Ma'Bell broken up by the central planning committee you hold pure. Forget it. Go back to reading the works of Marx.

Not everyone that disagrees with you is a closet communist (the marxist thing doesn't even really apply here). I'm not following part of your statement though. AT&T wireless was already a relatively large carrier before they purchased Cingular.
post #27 of 30
Quote:
Originally Posted by ChristophB View Post

I goess the public interest is better served with t-mobile just going out of business and we can all pay for the bankruptcy proceedings.

It's NOT going out of business. T-Mobile is profitable. Profits are down but not in the red.

http://www.businesswire.com/news/hom...r-2010-Results
http://www.tmonews.com/2011/08/t-mob...000-customers/
http://www.t-mobile.com/company/Inve...iewArchive=Yes

Dont ever trust anything a corporation says.
post #28 of 30
Quote:
Originally Posted by geoffrobinson View Post

Let's be honest. The FCC commissioners really dig the T-Mobile girl.

Well then the FCC needs to ask AT&T to keep the T-Mobile girl employed, and problem solved.
post #29 of 30
Quote:
Originally Posted by anantksundaram View Post

So, you want to maximize consumer surplus.

Well, then what you're proposing is that assets be sold to the lowest bidder, no?

Do you find putting words in other peoples' mouth an effective debate tactic?

I don't care who buys TMO, if anyone, as I think just about any buyer other that Verizon or ATT would be better for the market than either of those two. The fact that ATT bid so exorbitantly only signals just how much profit they expect to squeeze out of TMO. The best case is that DT sells its stake to some other company hoping to break into the mobile business and TMO continues to operate as it has, which it looks like is exactly what will happen.
post #30 of 30
Looks like the ATT and TMobile merger may now be officially abandoned. ATT has pulled the merger request as well as filing notice of a $4B charge-off related to the merger efforts. Similar to Google's exposure if their Moto deal isn't approved, ATT had agree to give Deutsche Telekom $3B if the deal wasn't finalized. The other $1B was removing the value of the added TMobile spectrum from their books. (Don't know why they had already added it in anyway)

http://www.theverge.com/2011/11/24/2...om-fcc-records
melior diabolus quem scies
Reply
melior diabolus quem scies
Reply
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: General Discussion
AppleInsider › Forums › General › General Discussion › FCC chairman finds AT&T, T-Mobile merger not in public interest, seeks hearing