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AT&T to America: Let Us Take Over and We’ll Give You All Broadband
For most of the twentieth century, AT&T held a monopoly over telephone service in the United States. National sentiment at the time could best be characterized by comedienne Lily Tomlin’s puckish character Ernestine, an employee of the “Phone Company,” who famously taunted audiences: “The next time you complain about your phone service, why don't you try using two cups with a string? We don't care. We don't have to — we're the Phone Company.”
Thankfully, in 1984, the Department of Justice broke up “Ma Bell” to foster competition in the telecom industry and bring down the heavily inflated price of phone service. The effort to lower prices by increasing competition was successful.
Today, however, we are on the precipice of revisiting that history. AT&T’s proposed purchase of T-Mobile would bring the wireless industry to a near duopoly — with two entrenched companies dominating the market. If the merger is approved, AT&T and Verizon would control 80 percent of the wireless market, leaving Sprint the only meaningful competitor against two giants. With the proposed merger, AT&T is trying to create “Ma Cell” and set American consumers back 30 years.
The Federal Communications Commission can prevent this from happening. The Commission is required by statute to approve wireless mergers only when doing so would benefit the public interest. Somehow, AT&T has argued that the merger would lower prices, create jobs and increase competition, even though basic principles of economics and history tell us that concentrated markets lead to the exact opposite in each case.
Fortunately, some congressional leaders see through AT&T’s rhetoric. Senator Herb Kohl (D-Wisc.), chairman of the Senate Judiciary Antitrust Subcommittee, submitted a letter last week to FCC Chairman Julius Genachowski and Attorney General Eric Holder urging their agencies to reject the merger. Senator Kohl wrote that the merger “will eliminate head-to-head competition between AT&T and T-Mobile, reduce an already concentrated national cellphone market from four to three competitors . . . , [and] pose a substantial danger to consumers of higher cellphone bills and fewer choices for service.” Representatives Ed Markey (D-Mass.), Anna Eshoo (D-Calif.) and John Conyers (D-Mich.) also submitted a letter questioning the merger and urging careful examination of its consequences, expressing concern that the acquisition “could reduce competition and increase consumer costs at a time our country can least afford it.”
This week, Sen. Al Franken, (D-Minn.) joined the growing chorus of legislators calling on the regulators to do what the evidence demands of them: reject this merger as a harm to the public interest. (If you look carefully, you can spot Sen. Franken in the Ernestine video linked above, from about 35 years ago. He was clearly ahead of the curve on this one.)
Moreover, a merger isn’t even necessary to secure the benefits AT&T proclaims. AT&T wants us to believe that the merger would permit expansion of its high-speed mobile broadband services to more rural areas using T-Mobile’s cell tower infrastructure and spectrum assets. Even supposing that AT&T’s claims of network congestion and spectrum shortage were valid, what prevents AT&T and T-Mobile from entering into an agreement that permits them to share these resources without merging? And what prevents AT&T from spending a fraction of the $39 billion it has offered for T-Mobile to invest in its own network and spectrum holdings to alleviate these supposed problems? Clearly, there are alternatives to a competition-killing merger that would provide AT&T the spectrum relief it claims to need.
AT&T insists that it needs T-Mobile’s spectrum licenses in order to expand its LTE network to underserved rural areas and to provide coverage to 97 percent of Americans. It may seem generous of AT&T to spend $39 billion to deploy mobile broadband services to these areas, but the fine print bears reading: AT&T has already promised to blanket the country in HSPA+, another high-speed mobile broadband technology. While LTE is slightly faster, it doesn’t change the fact that AT&T purports to require T-Mobile’s spectrum to make good on a promise it is already committed to fulfilling.
In short, the proposed merger is not really about bringing mobile broadband to rural America. AT&T has more than enough spectrum to do that today, if it is so concerned about rural deployment. What’s more, Verizon is already building out its LTE network to cover these areas, despite having many more subscribers and only two-thirds the amount of spectrum that AT&T would hold after the merger. The reality is that AT&T wants to bring AT&T’s LTE network to rural Americans and reduce competition at the same time, so that Ma Cell can price-gouge its newest consumers.
Don’t be fooled by claims that this merger would serve the public interest, despite what AT&T and its cronies would have you believe.
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Show AllYou can now add; "Monopolies bring lower consumer prices and better service" to the list of B/S being sold to the American People. "Tax cuts lead to a balance budgets" "We don't have a revenue problem, we have a spending problem" (After massive tax cuts throw the budget out of balance.) "Government never created a job" Used over and over by politicians that owe their very own jobs to the government.
Who are you going to believe the politicians or your lying eyes and ears?
Yes. And don't forget the other big lie, "Social Security and Medicare are contributing to the federal deficit." When, in fact, they are funded separately on their own out of separate payroll deductions, and don't contribute ONE PENNY to the federal deficit.
It amazes me anyone votes at all anymore. Politicians have always been famous for lying, but today it seems as if that is literally ALL they do. Period.
Oh, and "Shared sacrifice" where raising taxes on the rich are completely off the table.
Yes, despite the fact that the rich comprise a whopping 1% of the population, and 74% of Amereichans in almost every poll state they want to raise taxes on the rich and corporations. Anyone who thinks we have a functioning democracy needs to put the crack pipe down. If it isn't blatantly obvious by now that our "representatives" don't give a flying fuck about us - and ONLY care about their fellow rich - then it never will be.
Who knew, NC-Tom?
In our dystopian Through the Looking Glass world, the corporate and political authorities again blithely seek to turn an old-fashioned "prejudice" upside down.
It turns out that the old "trustbuster" mentality of skepticism toward monopolies is all wrong!
The telecommunications industry is leading the way in touting consolidation on every level as a consumer-friendly, win-win-win form of "bundling".
It assures both investors and customers that a monolithic telecommunications Combine will provide improved, more profitable, and cheaper service-- and the only cost is a little necessary and inevitable "pain" at the beginning as redundant workers are turned loose during the adjustment process.
The present-day overclass-manufactured dominant paradigm can be expressed by only slightly paraphrasing quondam General Motors President Charles Wilson's testimony before Congress in 1953:
"... for years I thought what was good for our country was good for [insert corporation name here], and vice versa. The difference did not exist. Our company is too big.”
When it was discovered that AT&T allowed the NSA to set up a spy room in its San Francisco call center to listen in on American's communication without a warrant the company should've lost its corporate charter and every employee who participated should've been brought up on charges. The assets of AT&T should've been seized and promptly returned to the public.
To even consider giving a criminal organization such as AT&T monopoly control over the communications of tens of millions of Americans is bizarro-world, ass-backwards.
Where's Rod Serling when we need him to put this injustice into perspective?
T-mobile refused to allow the NSA access to their customers calls. I suspect this is one of the reasons for the merger that doesn't get mentioned in public.
Same with Joe Nacchio former CEO of Qwest Communications. He refused to play ball with the NSA so they went after him for insider trading.
Flash forward to 2011: Insider trading is now legal (for Hedge Funds and Wall Street Casino Banks via their High Frequency Trading Machines implanted on the floor of the NYSE).
Today the Empire attempts to destroy their enemies with rape charges...Assange, Strauss Kahn, Qadaffi's Army etc.
Being charged with rape has replaced being charged with insider trading for enemies of the state.
Bill Schapp gives expert testimony on this insidious propaganda technique.
A must watch: http://tinyurl.com/3hp8xe3
Excellent post, Cygnus. I've not ever known prices for cable TV or broadband to come down, although that's the reason used every time to justify these telecom mega-mergers.
The purpose of mergers is to enhance revenues and therefore profit for the corp any increase in customer service is qn accident, unforseen and very short lived. I don't need ulrafast broadband...I'm very happy with what I have, I don't want cable I don't want dish I just want a phone and a relaible way to access the net, if a download takes two minutes instead of 30 seconds I really don't care! Can anyone out there think of an example where deregualtion, increased competition etc etc BS BS have IMPROVED service or made said service cheaper then please let me know.
everyone, please see the movie "Idiocracy"... we're on our way there ... wtf? it feels as though we're in slow-mo falling off the cliff!
First of all, the DOJ didn't "break up" AT&T in 1984. AT&T agreed to voluntarily divest itself of the local bell companies in exchange for the DOJ dropping its antitrust suit. AT&T wanted to get into the computer business but its hands were tied because of its status as a regulated monopoly. The divestiture was AT&T's idea, and was not something it was forced to do.