Fear the ‘twin Bells’: Petitions seek to halt AT&T takeover of T-Mobile

By Stephen C. Webster
Wednesday, June 1, 2011 13:20 EDT
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Mobile phone carrier Sprint and an Internet advocacy group filed petitions this week with federal regulators seeking to halt AT&T’s $39 billion acquisition of competitor T-Mobile.

“The merger would remove one competitor from the already consolidated mobile market, leaving Verizon and Sprint as the only other major competitors,” the Electronic Frontiers Foundation (EFF) wrote in a letter to the Federal Communications Commission.

“It would result in a single carrier controlling almost 42 percent of wireless subscribers, with approximately 128 million customers and a monopoly in the GSM service marketplace. The merger would also result in two companies, AT&T and Verizon Wireless, controlling nearly 80 percent of the U.S. wireless market.”

In a separate petition, Sprint called the potential for a Verizon-AT&T dominated market reason enough to fear the “twin Bells.” Sprint officials have already provided testimony regarding the merger to the Senate Judiciary Committee.

“This proposed takeover puts our mobile broadband future at a crossroads,” Vonya B. McCann, Sprint’s senior vice president of Government Affairs, said in a prepared statement. “We can choose the open, competitive road best traveled, and protect American consumers, innovation and our economy, or we can choose the dead end that merely protects only AT&T and leads the rest of us back down the dirt road to Ma Bell.”

EFF also warned that the merger would aid the formation of a mobile broadband duopoly, with two major firms virtually cornering the market on wireless data transfers. AT&T and Verizon have both recently instituted tiered bandwidth packages that charge users more depending on how much data they use each month. The group insists that the merger will ultimately lead to higher prices for mobile broadband.

“When there are only three choices, consumers have less ability to ‘vote with their feet,” EFF wrote. “This prevents the market forces from serving their corrective role when a carrier acts in a discriminatory manner or otherwise treats its customers poorly, whether by promulgating unfair or unfriendly policies or by failing to fulfill its stated policies in practice. Equally important, new innovators providing network-based services have less ability to reach the public if they have to navigate powerful self-interested gatekeepers with near monopoly power rather than an open playing field of competitors.”

AT&T insists the merger would be a positive economic factor that would help spread broadband access to over 97 percent of Americans.

Stephen C. Webster
Stephen C. Webster
Stephen C. Webster is the senior editor of Raw Story, and is based out of Austin, Texas. He previously worked as the associate editor of The Lone Star Iconoclast in Crawford, Texas, where he covered state politics and the peace movement’s resurgence at the start of the Iraq war. Webster has also contributed to publications such as True/Slant, Austin Monthly, The Dallas Business Journal, The Dallas Morning News, Fort Worth Weekly, The News Connection and others. Follow him on Twitter at @StephenCWebster.
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