Analysis: AT&T absorbs T-Mobile, now most powerful carrier in US

Posted by David Gomez

AT&T announced yesterday that it has reached a deal to acquire T-Mobile. It cost AT&T $39 billion to become the most powerful carrier in the US.

According to Ars Technica, AT&T confirmed a $39 billion deal with T-Mobile's parent company, Deutsche Telekom, that will see T-Mobile's become part of AT&T, making them the largest cellular carrier in the U.S., and the only one offering GSM phones.
    
Thus far the fawning corporate media has sort of stood in awe of the deal. They haven’t really been reporting about how the AT&T takeover of T-Mobile is actually bad news for consumers. They have been talking about it like it’s some kind of quasi noble act where there are no victims and that AT&T is only in this position because they are the best at what they do. So far the only people in the media who get how bad this deal might be for consumers is the tech media, but we’re only talking about a very small percentage of the press. That’s not enough to inform the voting public.
    
The main thing that AT&T is good at is getting regulators to look the other way because surely this is the type of thing that antitrust and monopoly laws were created for. AT&T’s customers will most likely feel like victims before long when innovation is stalled and their rates are raised.

And because of this buyout, US telecommunications customers will have one less alternative to turn to if AT&T’s service turns out to be less than what they desire. But I get the feeling that’s what AT&T wants, they want to dominate the market until they are the only one standing. Then maybe the government will come in and have to break them up 1984 divestiture style.

I sure hope history doesn’t repeat itself, but it looks like that’s where we’re headed to be honest. And the maddening thing is that the consumer is going to suffer because of it.

Of course I’m not the only one who thinks this AT&T/T-Mobile deal is a bad thing. Media and telecommunications advocacy group Free Press excoriated the deal in a press release.

"A market this concentrated -- where the top four companies already control 90 percent of the business, and two of them want to merge -- means nothing but higher prices and fewer choices, as the newly engorged AT&T and Verizon exert even more control over the wireless Internet,” said Free Press Research Director S. Derek Turner.

Telecommunications overcharging advocacy group, Stop the Cap! has also been active posting many articles today about just awful the AT&T/T-Mobile deal is for consumers. Here’s a good quote that sums a lot of this telecom madness up.

“AT&T gets the country’s only other major carrier using the same technology it does — GSM — and picks up the potential of more robust coverage in the urban and suburban areas T-Mobile focuses on.  AT&T will also follow the time honored tradition of buying something they cannot afford outright — they will finance it with a generous credit line arranged by J.P. Morgan Chase,” said Stop the Cap! Founder and Editor-in-chief, Phillip Dampier.

This is an issue that puts the exchange of information and communications at risk through higher prices, and big banks are involved.  Are you noticing a pattern here in these huge economic/political decisions? They all seem to involve mega corporations and the banking cartel. When the telecommunications barons don’t have enough cash to fund their own transactions they have to call in the people who missed the housing bubble and collapsed the housing market to make their deal a reality.

Technically the deal has to pass with regulating authorities before it can be final, but since Comcast was allowed to merge with NBC Universal recently, it seems hard to believe the Obama administration would begin to worry about consumer protections now.

You might be happy to know that AT&T is promising that its worst-rated service will improve with the acquisition of second worst-rated T-Mobile, or might just think it’s all a pack of lies, take your pick. There are some people who thought Obama would be a bad president for big business because he’s a socialist liberal.

Those people are wrong. Obama is a good business president if you are in the business of ripping off your customers and assuming monopolistic control over your industry. 2011 is shaping up to an awesome year for the big media and telecommunications barons.