Thursday, September 1, 2011

US Sues to Stop AT&T Buy!


The Justice Department moved Wednesday to block AT&T's $39 billion plan to buy T-Mobile, claiming that combining the two wireless giants could stymie competition and innovation. I believe that this is fantastic news. This is what the government is for! To protect it's people. If this merger goes through it could set a dangerous precedent. Escalating costs are endangering the American way of life for those in the lower and middle classes. Every day we demand the government do something about gas prices, which they are largely powerless to affect, but here, we have laws and policy to protect our citizens from being taken advantage of!
lazytechguys.com


While some people might say that Sprint and Nextel were able to Merge, so it's only fair that AT&T and T-Mobile are able to merge as well. I call bull crap. The real difference is that Sprint + Nextel = 10 or 20% of the market. AT&T + T-Mobile = more like 40%. Also, at the time Sprint bought Nextel, there were more players (this was also before Alltel was acquired). So the landscape was left with Verizon, AT&T, Alltel, Sprint, T-Mobile. 5 carriers. By contrast, AT&T is trying to sell us on a future with 3 carriers as being a "SUPER COMPETITIVE MARKET!!"


Services and technology, which enjoy some of the fastest growing demographics can keep raising their prices. Some of these services, like cell phones, are going to become even more necessary than they already are since most of us have replaced land-lines with them. When they are left as our own source of phone communication, they'll be free to do what they want unless to regulate them properly now. Of course our economy will suffer if companies are allowed to get fat and lazy like this. Why would they innovate and create new jobs if they we are all ok with them letting maintain the status quo and still make more money for it. The Dept. of Justice needs to stand firm on this and show AT&T that AT&T isn't the one who keeps the public's best interest in mind. 
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2 comments:

  1. AnonymousSeptember 4, 2011 at 5:02 PM

    Ryan I agree with many of your stances in your post. While I’ll admit I’m a big free market capitalist and would not have been horrified if the deal went through, I can’t help but notice a few things that frighten me. Like you said, if T-Mobile would have been acquired, that would have left only three major cell phone service companies left. While they all claim they compete with each other, I can’t but help notice some eerie similarities in much of the pricing. While collaboration in price fixing is illegal, it is not illegal to set your process the same as the competitors and have all companies raise and drop prices at the same time so long as they’re not actually collaborating. If AT&T raises their prices, Verizon would quickly follow suit and there would be no real competition. Deep down, I feel that the government breaking up this deal was a good thing for cell phone consumers around the country.

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  2. AnonymousSeptember 5, 2011 at 4:48 PM

    Blocking a deal like this is not always a good scenario. If cell phones were necessary elements of the economy, such as food products and housing, I would whole-heartedly agree with you. But for a free-market service like cell-phone coverage, this deal is for the good. While a potential monopoly takes place in the U.S. short-term, let's not forget that a free-market is forever correcting. This opens the door for new technologies to be brought to the table, as well as more competitive cell-carriers such as orange UK or even T-mobil Deutsch to make larger moves in the american market. Smaller cell carriers such as straight-talk, Revol and Virgin mobil could also piggy-back off the two giants, which would take AT&T from a consumer service to an industry back-support.

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