Comment on AT&T Rebuttal to the FCC | Jeff Kagan Tech Analyst

Print  | 

     

Jeff Kagan

Tech Analyst

     

The weak part of AT&T position is it is only concerned with AT&T. Agreed, this merger with T-Mobile would be good news for AT&T, however the problem is it would not be good for the industry. The marketplace has changed in the last few years.

We have seen so many mergers during the last decade, and AT&T has played a role in them, and I have supported them all. In fact there will still be many mergers in today’s wireless space between smaller players that I will still support. If AT&T wanted to merge with a much smaller competitor I think that would stand a much stronger chance of being approved.

However today the marketplace is different from a few short years ago. Today there are very few, very large players. Today the US Government has to make sure the marketplace remains competitive and healthy.

It’s not just AT&T. I think both AT&T and Verizon would have a difficult time acquiring T-Mobile.

On the other hand I can see Sprint Nextel or other smaller firms being successful with similar plans.

The reason is simple. If AT&T mergers with T-Mobile it will be good news for AT&T, but will push the top two carriers, AT&T and Verizon too far ahead in the marketplace. That limited number of competitors will harm competition, increase prices and reduce innovation.

If Sprint Nextel could acquire T-Mobile or other company and get larger, that would strengthen the three way leadership in the wireless space.

Three main competitors are a much healthier industry than two. It’s like that in every industry.

I have known AT&T, and SBC before the acquisition for quite a long time and I like them. They have done an incredible job of building an successful organization. However they must understand the rules are different when you are a company the size and scope of AT&T.

Acts AT&T takes significantly impact the entire industry. When that impact is good or neutral fine. However when that impact is harmful, that is not fine.

Regulators must not only look at what is good for the companies who want to merge, but they must also be very concerned with leaving the marketplace healthy and competitive.

Already the largest carriers own most of the spectrum and that gives them the lead in offering wireless data services which leaves smaller players out in the cold. Smaller players need access to spectrum. That is why they support the efforts of Lightsquared. It is another solution for these smaller players.

Without that, these smaller players would be limited to offering voice with a slow wireless data connection. In the next few years voice will only represent roughly 3% of wireless traffic. The rest will be data. That is the scope of this larger problem we are facing.

AT&T can be expected to just be concerned with AT&T, but the regulators must also be concerned with the larger marketplace.

While I have not always agreed with the regulators, in this case I think they are right.

This is more important than just this one deal. This is about the future and health of the industry.

We have a wireless data spectrum problem which we need to solve for the entire industry. This is a problem which goes beyond AT&T. It affects every competitor and every customer.

That is what we need to focus on now.

* * * * * * * * * * * * *

These comments may be quoted in news stories.

Please attribute to Jeff Kagan, Tech Analyst with www.jeffKAGAN.com

If you would like to discuss, call me at 770-579-5810 or send an email to jeff@JeffKAGAN.com

To be added or removed from this mailing list for comment, please send me an email.

* * * * * * * * * * * * *

Jeff KAGAN| Tech Analyst w Atlanta based jeffKAGAN.com

Analyst sharing perspective on the changing industry for 25 years

~ Also Columnist, Author, Consultant, Speaker

~ Column http://www.ectnews.com/perl/section/jeff_kagan/

Phone 770-579-5810 Email jeff@jeffKAGAN.com Web www.jeffKAGAN.com

Other press releases from Jeff Kagan

• Apple iPhone Sales Weaker Than Expected | Jeff Kagan Industry Analyst - January 14th, 2013
• Will FACEBOOK Launch Phone This Week? | Jeff Kagan Industry Analyst - January 13th, 2013
• Nokia Not Out of Woods Yet | Jeff Kagan Wireless Analyst - January 10th, 2013
• Why Microsoft Windows 8 Holiday Sales Were Soft, Jeff Kagan Tech Analyst - January 5th, 2013
• Sprint Nextel Acquiring Clearwire for Wireless Data | Jeff Kagan Industry Analyst - December 17th, 2012