Comment on FCC Blasting AT&T T-Mobile Deal | Jeff Kagan Tech Analyst

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Jeff Kagan

Tech Analyst

     

The FCC made public a 109 page report on the AT&T, T-Mobile merger. The FCC said the merger would limit competition in nearly every US city and it would leave to higher prices.

AT&T was against the FCC release of this report. The report said of the 100 largest markets in the United States, this merger would leave only one with signficant wireless competition.

That is one of the main problems with this planned merger. The report said the market without T-Mobile would give AT&T unilateral incentive to raise prices and that would encourage both Verizon Wireless and Sprint Nextel to do the same.

The report also said it found little evidence that this deal would improve wireless network quality.

AT&T has made it a point to say this merger would create thousands of new jobs in the US, however this FCC report said the deal would result in a net loss of direct jobs.

We still don’t know whether this deal will be done or not. If we recall, in the 1990′s, SBC tried to acquire AT&T and was shot down by the FCC. However several years later SBC did acquire AT&T and took its name.

Perhaps the company is trying to take the same path here.

Regulators have to make sure the marketplace isn’t harmed. They have to make sure competition remains vibrant, prices low and innovation high.

I like AT&T, however we must be very careful with next steps.

We have seen countless mergers in the last decade or so, but at some point there are so few companies left that one more large merger could harm the competitive marketplace.

We may be at that line right now.

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

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Jeff KAGAN| Tech Analyst w Atlanta based jeffKAGAN.com

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