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AT&T Takes America Back to the 'Monopolistic' Future
AT&T's plan to take over T-Mobile has set the stage for Washington's high-tech policy battle of 2011.
AT&T Inc. on Sunday, March 20, 2011 said it will buy T-Mobile USA from Deutsche Telekom AG in a cash-and-stock deal valued at $39 billion, becoming the largest cellphone company in the U.S. (Photo credit: AP Photo/Seth Perlman and Roberto Pfeil)
But that's not all that's at stake. This proposed deal paints a dark scenario for the future of all communications -- a future that looks increasingly like a bygone era of monopoly control.
If AT&T succeeds, it will form a communications colossus to rival Ma Bell. Two companies, AT&T and Verizon, would control close to 80 percent of the mobile marketplace in America - a percentage that could exceed 90 percent, if, as many anticipate, Verizon buys Sprint.
For the hundreds of millions of American people who rely on handheld phones and wireless Internet devices, this equation spells disaster.
Ma Bell Muscle
As more and more people are turning to handheld devices to go online they face fewer options in a marketplace dominated by massive, vertically and horizontally integrated companies. The net result for consumers is higher prices for fewer choices. Competitors trying to innovate in this space with open networks and devices will face formidable obstacles to entry put in place by a duopoly that sees openness as anathema to profits.
AT&T is poised to exert its full political might to get this merger done, and the communications giant is accustomed to getting its way in Washington.
Its lobbyists have their own hall pass at the FCC, where they've visited the agency more than any other corporation. It has spent more on congressional campaigns than any other corporation in documented history. And AT&T even has the ear of the president -- in the person of telecom-lobbyist-cum-White-House-Chief-of-Staff William Daley.
Merger Myths
AT&T's PR machine is spinning like crazy to convince Americans that they've got our best interests at heart ... and that their friends at the Department of Justice and FCC should rubber-stamp this merger.
AT&T executives and flacks now say the "synergies" of the deal will lower prices and improve "quality of service for customers," and that it will "expand America's workforce" providing thousands of new jobs for our economy.
But when was the last time a merger actually created jobs for Americans and not more pink slips? This merger is no different. It puts the jobs of nearly 40,000 U.S. T-Mobile employees at risk. Many of the jobs at retail stores and call centers will be eliminated, and there will be more jobs lost as the cost-cutting effects of this merger ripple through the broader economy.
They say the T-Mobile takeover "strengthens and expands U.S. mobile broadband infrastructure," and that it helps us "achieve policymaker goals of deploying broadband to 95 percent of the country, including smaller, rural communities."
But according to recent Commerce Department data, wireless services are already available to 95 percent of Americans. If this merger goes through, industry analysts speculate that AT&T will decommission as many as 40,000 wireless towers, reducing the quality of coverage for hundreds of thousands of Americans.
They say the merger "enables the next era of American innovation and continued growth of U.S. high tech industry."
But the merger would allow AT&T to exert even greater gatekeeper control over what happens on the wireless Web. In the past, the company has been suspected of blocking competing services -- like Skype, Google Voice and Slingbox. AT&T's expanded control over the handset market would stifle innovation in devices. Look no further than AT&T's own record of "crippling" handheld phones - like the Motorola Backflip -- that can do more than what the company wants.
They say the overall average price-per-minute for wireless services has declined 50 percent since 1999, "during a period which saw five major wireless mergers."
But that figure is highly misleading. While the cost to consumers for voice services has dropped, the sum total of charges on mobile phone bills has steadily increased, according to J.D. Power and Associates. Added costs include spiraling rates for texting and data services as well as hidden handset subsidies. With less competition among carriers, we can expect AT&T to charge you even more.
(Those who will feel this worst are the 34 million T-Mobile customers who pay on average 20 percent less for mobile service than AT&T customers. Even should AT&T agree to honor existing T-Mobile contracts for their remaining length, these customers will surely see higher prices when those contracts expire.)
There is nothing about having less competition that will benefit the new generation of smart phone users. Before rushing to sign off on yet another mega-merger, the FCC and the Justice Department should confront the very real problems of runaway consolidation in the wireless market.
The Obama administration, which is keenly aware of this deal, has yet to say no to a massive corporate merger ... despite a June 2008 pledge by then-candidate Obama to act "against the excessive concentration of [media] power in the hands of any one corporation, interest or small group."
But the negatives of AT&T's takeover of T-Mobile are too large for even this president to ignore.
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23 Comments so far
Show AllAT&T is like one of those horror movie monster blobs who gets broken to pieces then reassembles itself into something bigger and more horrible than before. But it's just another big corporation. They're there and they're doing what big corporations continue to do. The momentum to break them up and cut back on their power just isn't there now.
It's good, though, to keep reminding people that when the president was a candidate the president did promise, as Tim Karr says, to be "against the excessive concentration of power in the hands of any one corporation, interest or small group." I hope during one of his rare press conferences someone asks him: "Sir, in June 2008, you said [same quote here]. How we doing with that?"
Another reason telecoms are merging is to grow to the point that they are too big to fail.
After seeing the huge taxpayer funded bailouts the too-big-to-fail banksters received (and continue to recieve), companies in other industries are jumping on the too-big-to-fail gravy train.
Team Obama's low interest rates in an unregulated business environment are enabling mergers in all industries. These mergers are resulting in higher prices for consumers, more jobs lost and an ever growing bailout liability that will assure that cuts in domestic programs become more widespread.
wouldn't surprise me to see Verizon & AT&T apply to become Bank Holding Companies (a la GMAC) so that they too will be eligible for any future TARP-like no-interest loans.
I remember that when Ma Bell was dismembered, stores in NJ began selling T-shirts and sweat shirts bearing the words: "Breaking up is hard to do". My sister laughed, and bought one. She was then a mid level manager for AT&T.
Trylon
Richard Daley Obama's Chief of Staff and former Secretary of Commerce in President Bill Clinton cabinet, was the President of SBC Communications, Inc, now AT&T. AFL-CIO, President Richard Trumka agrees with the merge. After the merger 30 millions T-Mobile subscribers will be paying 20% more and there will be jobs loss.
It make me wonder, when will CD posters here, who still supports the Union, Democrats and Obama will ever wake up!
So who do you propose that we support? Boehner and McConnell? Palin? Newt? And what is wrong with the unions? the only thing that keeps us any rationality of a living wage and to fight off the corporate masters.
You make no sense, republicans will not come to the rescue.
jujubaby,
".....So who do you propose that we support? Boehner and McConnell? Palin? Newt?"
Tell me the different between the Repug and the current batch of crooks? The different as I see it, when the Democrats screw us we remain silence. When the Repug screw us we raised hell with massive protest in Wisconsin and elsewhere. This is not more or less the same but even more brutal and heartless than the people you mentioned in your posting. Below just a few example:
1-Richard M Daley, Obama Chief of Staff - Former AT&T CEO, etc.
2-Net Neutrally - Dead. Dubya tried but failed.
3-Two wars continue, Obama started a new one in Libya.
4-Obamacare, still not affordable and continue to increase.
5-Social Security system toward insolvency. Dubya failed
6-Drones killing innocent death in Pakistan.
7-Continuation unrelenting support of Israel killing of innocent victims.
8-More brutal photos, more gruesome than Abu Ghraib Prison photos.
9-Banks continue foreclosed even more than 2010.
10-Unemployment, continue with some new jobs created, temp $7.0/hrs.
11-More deep water drilling, just announced a few days
12-Continuation of FAT KATS pay and bonuses, while sitting on piles of cash.
13-Anti-War Protesters, including Daniel Ellsberg, Hedges and Ray McGovern.
14-Continue spying of US citizens
15-Continue talk, talk and more talk of Democracy, freedom etc...
16-Spokesman PJ Crowley fired for saying “stupid” Manning torture.
17-Unrelenting support for the Saudi, Bahrain, Yemen - regimes.
Team Obama never met a merger they didn't love !
Of course this will happen. The Corporations' control of the U.S. government is almost 100% complete. Anti-trust, regulations - all such things are almost extinct, with the complicit help of the corporations' paid whores in positions of power in every department and office in the federal and state governments.
Nothing should surprise anyone anymore, when it comes to the continuing takeover of the U.S. by the corporate ruling elite.
America is a fascist oligarchy. Period. Obvious as hell to anyone with a brain to think. Fascism: "The merging of state and corporate power for the benefit of each." Mussolini - that fallen fascist dictator - defined fascism as "corporatism."
Welcome to the Fascist States of America.
During the NPR funding debate, I've been arguing that the real solution is media deconsolidation. So what do we see? More media consolidation. Bill Clinton and the Democrats passed the 1996 Telecommunications Act that allowed more consolidation. Obama's FCC appointees passed compromised internet net neutrality rules in December; now lets see how this plays out. I'm not optimistic. Also,besides the damage of having information being controlled by fewer corporations, how convenient it would be for our government to have to go through fewer carriers to track our electronic information.
As someone who has covered the telecom industry since the Ma Bell divestiture, this deal stinks for consumers. I don't see how anyone in their right mind would permit this merger to through. Humpty Dumpty is coming back, fatter and greedier than ever. This is all about control--which translates into ever increasing charges for users.
I'm not sure this is necessarily a bad thing. It's not as if our telecommunications industry is doing all that great. I don't like monopolies but maybe we need fewer and bigger companies with more government regulation. Maybe we can force them to reinvest profits into infrastructure and force them to have more transparent billing procedures. All this so-called "competition" seems a bit inefficient anyway. Why do we need multiple cell towers for every zone? The story also cries about rising prices but we also have had larger data streams and so yes, we should pay more. That's what you get with competition. Competitors need a steady or increasing stream of revenue and what the customer gets in return is more data.
We will not get "more government regulation." We will get NO government regulation. We will end with one provider, and you will get, as AT&T is now implementing, smaller capped data streams, lower speeds, less range.
Competition is good for consumers, but it is absolute anathema to businesses. There has not yet been a deregulation in any field which did not ultimately lead to fewer competitors, higher rates, and poorer service, until such time as the public outcry became so intense that the bought-and-paid-for big business advocates who make up the Legislative (and in some cases Executive) branches of government became afraid that the general public might well stop being well-behaved victims and start lighting torches and sharpening pitchforks.
ONLY when the "rulers" realize that Kochsucking has an adverse effect on one's life expectancy will they be induced to at least pretend to remember who it is they're supposed to represent.... and they will only do this until such time as the natives become pacific again.
Business interests are not and never have been at all interested in the actual welfare of their customers except as that welfare reduces their effort to turn extortionate profits... And for the mega-corporations, the welfare of US citizens is no longer significant in that regard, as the growing markets for both production and consumption are in Asia.
And this will not change in our lifetimes, unless there is a total global economic and social collapse. At this point if the US government approached the transnationals and said "Shape up or ship out," the trannies would, without exception, be gone within 48 hours.
Thanks to those who recommended Jack London's "The Iron Heel". After reading it, none of this is a surprise anymore.
Hmmm
As they say; Power corrupts and abolute power corrupts absolutely.
It is NO coincidence that AT$T ends up with all marbles. No company in American history has done more to facilitate the ILLEGAL assault on our civil liberties by the government than AT$T. This is their reward for treason.
It would appear as if the past is now prologue to the future, as Ma Bell has arisen from its' Anti-Trust breakup into a corporate colossus even scarier than it's prior tech predecessor.
http://en.wikipedia.org/wiki/Robber_baron_(industrialist)
http://www.dinarislam.com/wp-content/uploads/2010/06/Robber-Barons-modern.jpg
Says it all.
This deal probably stinks, but that has more to do with the sad history of deregulation.
There was a time, now decades past, when public utilities were recognized as necessary for the common good, and regulated accordingly. But that, of course, was when government wasn't so thoroughly in the pocket of big business. The old Bell system actually worked well, was predictable, and priced fairly. Now companies come and go, the pricing structures are often deceptive, and service becomes ever more disjointed and unreliable. There are some areas where the unregulated "Free Market" mentality leaves us all open to a confusing exploitation and less-than-satisfactory results. These days, unfortunately, there is no one on the side of the consumer.
These all started with the past Republican administrations and their de-regulation policies. I have believed for a long time that AT&T has become too big, too powerful and too monopolistic. It has to be broken off again. I hope we will have another brave judge in this country who would do that; because I have no hope in Obama's administration (although he is a democrat).
This is very bad news, and it comes following the FCC's caving on net neutrality, allowing Verizon (and Google) to carry out their bandwidth-throttling schemes on mobile devices.
Now, you get AT&T in the picture - the company that refuses to stay broken up. It's reassembling its "natural monopoly" bit by bit.
You only have to look abroad to see that U.S. telcos are quite happy to jack up the rates while delivering poorer quality service. That's certainly true of high-speed broadband services - hence the need to throttle down peoples' bandwidth. And there isn't competition already in the United States. Still, the U.S. local exchange carrier monopolies, now with a foothold in the long distance market, see bandwidth-intensive smartphones as their next big cash cow. They are looking to grab mobile spectrum, even though that too has been monopolized.
Anyone who has been thinking that Obama will honor his pledge about stopping concentrations of power hasn't been paying attention. He also said he'd go after the telcos that tapped the nation's phones for George W. Bush, which included AT&T, but he quickly flipped on that as a Senator, even during his Presidential run. Voters apparently didn't pay attention and voted for him anyway. AT&T was one of the sponsors of the 2008 Democratic National Convention in which contributions are essentially unlimited. So, Obama owes AT&T big time for that, and he always comes through for his corporate constituents.
Done deal, and it will be yet another crime by this administration.
Thoughts_Into_Action
Please do not feel offended, I too a whiner, I try to tell you what I know. Not to trust the Repug, Democrats, Unions, MoveOn and Obama.
You should do a search on Obama's Chief of Staff Richard M Daley. He's one of the sons of the late Mayor of Chicago. President of AT&T before the name changed from SBC, worked for Goldman Sachs, Lobbyist and much more...
Don't expect any help from this asshole corporate shill of a president.