Justice Department blocks AT&T's T-Mobile deal

[Kompresshun]

I was very excited to see this today, not that I didn't see it coming. Thank God that somebody has enough sense to see that it shouldn't happen. They're the last person on earth that i'd want to see purchase T-Mobile, but I hope T-Mobile can continue on it's own, because i'm rooting for them to move ahead as a carrier. AT&T needs to DIAF

http://blogs.suntimes.com/sweet/2011/08 ... _by_j.html

[Jesda]

I wish government was less involved with business.

[Encryptshun]

"Less involved" is pretty broad, Jesda. Care to elaborate?

[Jesda]

No interference in mergers and acquisitions
No subsidies, especially in agriculture and defense
Dramatically simplified tax laws
Fewer regulations that directly affect product development (CAFE)

[Encryptshun]

So you don't think that anti-trust regulation is necessary?

[sbird1]

No interference in mergers and acquisitions
No subsidies, especially in agriculture and defense
Dramatically simplified tax laws
Fewer regulations that directly affect product development (CAFE)

laissez faire laissez faire laissez faire laissez faire laissez faire laissez faire laissez faire

[hannibal]

Wow, Jesda. That's a little too laissez faire.

Monopolies are good for a business, but are harmful to consumers.

[sbird1]

Well that's true, but I would hardly say that AT&T has a monopoly. They may have had one at one time, but I'd say the mobile phone industry is fairly competitive in it's current form.

[Jesda]

Wow, Jesda. That's a little too laissez faire.
Monopolies are good for a business, but are harmful to consumers.

The purest monopolies are typically enforced and supported by government; the most common monopolies have historically been government agencies or so-called services. These types of monopolies are also maintained through price fixing, anti-competitive regulations, and explicit limitations of services and competition (like fixed routes for airlines).

A de facto monopoly, the kind that statists typically cite as a concern in a free and open market, does not generally exist in a large and free economy. They tend to exist in closed societies with limited communication and mobility.

[frapjap]

^ All I could think of when I read that was electric and gas companies. All of which suck.

[szh]

Well that's true, but I would hardly say that AT&T has a monopoly. They may have had one at one time, but I'd say the mobile phone industry is fairly competitive in it's current form.

Um ... actually, If AT&T is/was allowed to purchase T-Mobile, it would be a [sort of] monopoly. Let me elaborate ... warning: long read ahead!

The older telecom "multiple available sources" was required in an era when technologies were the same for everybody (Analog cellular at 800MHz). After digital came along, there were two fundamentally incompatible technologies available: CDMA and GSM. In the CDMA camp, you had Verizon, Sprint, Alltel , US Cellular, as the larger footprint giants - to a larger or smaller degree. In the GSM camp, you had AT&T and to a much lesser degree for footprint, T-Mobile. By the way, CDMA had AMPS as a fall-back and the pre-GSM technology at AT&T called TDMA had AMPS as a fallback - with GSM, there was no Analog AMPS fallback possible.

Even with this state of competition/affairs in CDMA, the availability of some CDMA at 800MHz and some at 1900MHz was causing difficulties. In the old days, you could take an analog phone from any carrier to any another carrier - no issues whatsoever! However, with Sprint and Verizon for example, the FCC let them get away with putting constraints on the phones so that they could not be moved from carrier to carrier - even though they phones ad the same protocol and the same spectrum support. You could get identical CDMA phones from Sprint and Verizon (look at the Samsung i730 as an example - still sold on eBay sometimes) but you cannot use the Sprint version on Verizon and vice-versa.

This was a subtle way the carriers prevented the phones from being transferred like in the old analog AMPS days - lead to lesser benefit for customers/consumers. The argument was "we subsidized the phone cost", but after the 2 year contract subsidy was completed, you still could not move to another carrier and keep the same phone - you had to get a new phone (only the number could be moved).

Frankly, the FCC has been asleep at the switch in allowing much/some of the past mergers (like the Verizon acquisition of Alltel), but even there at least, some competitions still exists (Sprint and US Cellular are independent of Verizon) - assuming you are willing to overlook the handset incompatibility issue. However, if AT&T is/was allowed to buy T-Mobile, then the 2G GSM and 3G W-CDMA (also called HSDPA, HSUPA, HDPA, etc.) technologies would only have one large nationwide carrier supporting them - and this IS a monopoly situation that AT&T (post-merger) could easily exploit to the detriment of their customers. You could already see the trend with the recent "no more unlimited data plans" that T-Mobile is/was going towards (in prep for any AT&T purchase).

On the whole, while I generally prefer less government regulation, I am also glad the DOJ at least has the sense to catch on to this, even though the FCC was not properly objecting to it like they should have! So, I am glad somebody was listening and watching ... the bottom line: preventing AT&T from buying T-mobile is better for the customers and consumers in the long run.

By the way, this issue is going to be repeated with the next-gen data technology called LTE. You may not be aware of this, but Verizon is restricting device and handset manufacturers from supporting the different bands - for example, both AT&T and Verizon have LTE deployments at 700MHz, but LTE device vendors are prevented from supporting each other's bands within that spectrum. So, AT&T LTE units at 700Mhz cannot operate in the Verizon LTE bands at 700MHZ. In today's "soft-radio" world, the specious argument of "it cannot be done to operate in both Verizon and AT&T bands at 700MHz" is unacceptable.

Artificial "restraint of trade" constraints ... that do not benefit the customer! I wonder if the FCC is watching this LTE issue at all?

The bottom line: preventing AT&T from buying T-mobile is better for the customers and consumers in the long run - thumbs up to the DOJ finally!

Z

[Dattebayo]

But Jesda must be right, he has the pants of justice?

Also, it makes me wonder how people can make such broad generalizations about business like "the market will adapt" or "monopolies don't exist". (like they know for sure, ugh. You can't possibly know that)
For example: For most home-related products, have you ever tried to buy anything for cheap and not shopped at Home Depot or Wal-Mart? Good lord, everywhere else I go I will end up paying 30% or worse more! That's not a monopoly? Sure, I guess you COULD purchase the item somewhere else, but when spending a whole lot more, how can you adapt under those conditions? It will snowball like that until you either cave in or lose your money. It could kill a small business not to use them. Either way makes for a very unfair market advantage and can hurt the consumer when that company experiences problems of their own.

[LEMHEAD16]

Jesda for President 2012

or Ron Paul President Jesda VP Ticket.

You'd get my vote

[sbird1]

However, if AT&T is/was allowed to buy T-Mobile, then the 2G GSM and 3G W-CDMA (also called HSDPA, HSUPA, HDPA, etc.) technologies would only have one large nationwide carrier supporting them - and this IS a monopoly situation that AT&T (post-merger) could easily exploit to the detriment of their customers. You could already see the trend with the recent "no more unlimited data plans" that T-Mobile is/was going towards (in prep for any AT&T purchase).

On the whole, while I generally prefer less government regulation, I am also glad the DOJ at least has the sense to catch on to this, even though the FCC was not properly objecting to it like they should have! So, I am glad somebody was listening and watching ... the bottom line: preventing AT&T from buying T-mobile is better for the customers and consumers in the long run.

Z

Man, all that jargon is confusing. I guess I just don't follow that industry close enough to really know what is going on. T-Mobile just seems like such a pee-on, insignificant company to be attracting so much attention from this merger. Thanks for the explanation, Z, now I just have to figure out what you said.

As for Ron Paul... F*** YEAH

[szh]

However, if AT&T is/was allowed to buy T-Mobile, then the 2G GSM and 3G W-CDMA (also called HSDPA, HSUPA, HDPA, etc.) technologies would only have one large nationwide carrier supporting them - and this IS a monopoly situation that AT&T (post-merger) could easily exploit to the detriment of their customers. You could already see the trend with the recent "no more unlimited data plans" that T-Mobile is/was going towards (in prep for any AT&T purchase).

On the whole, while I generally prefer less government regulation, I am also glad the DOJ at least has the sense to catch on to this, even though the FCC was not properly objecting to it like they should have! So, I am glad somebody was listening and watching ... the bottom line: preventing AT&T from buying T-mobile is better for the customers and consumers in the long run.

Man, all that jargon is confusing. I guess I just don't follow that industry close enough to really know what is going on. T-Mobile just seems like such a pee-on, insignificant company to be attracting so much attention from this merger. Thanks for the explanation, Z, now I just have to figure out what you said.

Sorry for all the jargon! Yes, it is confusing. It is probably why the FCC was not watching the previous mergers carefully - they didn't see the technology things going awry either!

Anyway, the DOJ caught on correctly here (I helped my boss testify at a DOJ / Congress session some months ago on this merger - probably influenced it! ). Bottom line is: preventing this acquisition is good for the consumer in general.

Z

[Encryptshun]

It'll be interesting to see what, if anything, will come up about Google's acquisition of Motorola Mobility.

[szh]

It'll be interesting to see what, if anything, will come up about Google's acquisition of Motorola Mobility.

They will be able to defend handset patent lawsuits more effectively.

Will not impact availability of cellular service much ... not unless Google is also successful in buying spectrum (which they have tried ...)

Z

[Encryptshun]

If I'm Google, my strategy is to remove cellular from the equation and integrate consumer broadband, GPS, cloud storage, and voice connectivity through a satellite network. If I were going to do that, I might buy a mobile phone company so I could quietly produce a next-gen series of satellite phones that integrate well into the MFD space.

[szh]

If I'm Google, my strategy is to remove cellular from the equation and integrate consumer broadband, GPS, cloud storage, and voice connectivity through a satellite network. If I were going to do that, I might buy a mobile phone company so I could quietly produce a next-gen series of satellite phones that integrate well into the MFD space.

But, satellite phone service is not a panacea, unfortunately. Some fundamental problems that get in the way:

(a) Range to the satellites (in the LEO orbits) is much higher than to local towers. So latency is an issue.

(b) The cost of deploying LEO satellites is high - they are low enough that they have short lifetimes (air drag in the upper atmosphere) and need to be replaced periodically - many millions of dollars to do so!

Look at the folks doing satellite service in the past: GlobalStar, Iridium, Teledesic and Orbcomm (data only) - all went through one or more bankruptcies (more will happen, I predict) and the cost of the handset and the services can be quite expensive. The only viable remaining one that has any potential is Lightsquared, and they are having to deploy ground cellular towers in major cities to compensate for issues with distances to satellites for their future LTE-only service.

Z

[skydragoness]

szh: Thank you for posting that, most people don't know that T Mobile is the only other GSM network besides AT&T (is US Cellular too?)

I am a T-mobile customer [stop laughing] for the past.. oh 6 years probably (4 yrs out of contract). Never had an issue in my time with them and I was rather annoyed when I heard about the potential merger with AT&T. I've heard a lot of shiesty s*** about them from my mom and also my friends (crappy customer service, charges/crazy fees, etc).
But, I figured if that was going to happen may as well renew a contract with a snazzy new phone+data plan and get "grandfathered-in" with a good monthly rate from T-Mobile vs. waiting around or switching to another carrier (well, Sprint was going to be my next choice).

So if this merger isn't going to happen, does this mean the "no more unlimited data plan" is still going to stay in effect? Sprint is the only one with unlimited data (but I'm not so inclined to switch to them since they're coverage isn't any better than T-mobile IMO)

[Kompresshun]

I am a T-mobile customer [stop laughing] for the past.. oh 6 years probably (4 yrs out of contract). Never had an issue in my time with them and I was rather annoyed when I heard about the potential merger with AT&T. I've heard a lot of shiesty s*** about them from my mom and also my friends (crappy customer service, charges/crazy fees, etc).
But, I figured if that was going to happen may as well renew a contract with a snazzy new phone+data plan and get "grandfathered-in" with a good monthly rate from T-Mobile vs. waiting around or switching to another carrier (well, Sprint was going to be my next choice).

So if this merger isn't going to happen, does this mean the "no more unlimited data plan" is still going to stay in effect? Sprint is the only one with unlimited data (but I'm not so inclined to switch to them since they're coverage isn't any better than T-mobile IMO)

I love T-Mobile, I had them back when they started out as Powertel and then went to Voicestream, all the way up to when they became T-Mobile. The only reason I don't have them now is their coverage and I prefer to have a phone that I can depend on to get service, i'm sure I could get by with them, but that's really the only reason.

We ran away FAST from AT&T 2 years ago and haven't looked back, their service was horrible, customer service was horrible, they constantly overcharged us and the list goes on and on. We stuck with them for 3 years, but finally dumped them when we found out that Sprint would give us nearly double the discount(Healthcare worker) that we were getting with AT&T, gave us a MUCH MUCH better family plan, gave us a $100 credit to switch and a ton more features. We've been with them for 2 years now and couldn't be happier, excellent customer service, and we get great coverage for where we go.

So far more than 20 of our family members and friends have dumped their AT&T service and switched to Sprint, and more have at least dumped AT&T to get away from them. I know Sprints service isn't perfect for everyone, but everybody we know has been satisfied with it and haven't had any issues with coverage around here. I've been pretty much all over the southeast with my phone and haven't had any issues with coverage.

As far as the data plans go, I wouldn't be surprised to see T-Mobile go back to unlimited, but in the same sense tiered data plans really aren't that bad either. I prefer an unlimited plan, but I could live with a tiered data plan, seeing as I don't usually exceed 2GB personally.

[skydragoness]

Yeah that's my issue with T mobile, I seem to get good coverage except for the obvious places: the boonies. Although I was outside of Roanoke two weekends ago and I noticed my phone hopped onto AT&T's network and I had a bar or two.
Seems like Verizon wins in coverage in rural areas. How are rural areas for you on Sprint?

[Kompresshun]

Seems like Verizon wins in coverage in rural areas. How are rural areas for you on Sprint?

If you're looking for good reliable coverage everywhere, Verizon is where it's at, but it comes at a price obviously. I have no issues on the back roads around Lexington, in fact I get coverage where I didn't with AT&T now. I live about 15-20min away from the city and I don't have any issues with coverage, no matter where i'm at. I get decent coverage out in the boonies of TN too.

I've also heard that Sprint is supposed to use Verizon towers for roaming, and roaming is free on most plans they offer. I've only roamed 2-3 times since i've had their service though and it wasn't anywhere around me, it was in Florida.

I will say that Sprint really isn't as good of a deal if it's just for you only, you save a lot more money with 2 or more people on the plan. It's still cheaper than Verizon though and you get unlimited data, texting, and ect, plus free navigation as well.

[zacmil]

How are rural areas for you on Sprint?

I just thought I'd weigh in here. I just switched to sprint a few weeks ago and I definitely live in the boonies. The coverage is passable, but not really what I'd call great. When I'm at home I can get good enough coverage, but I pass through several dead spots on my way into town. If you want reliable coverage in rural areas, you're going to want to stick with Verizon or AT&T.

I've also heard that Sprint is supposed to use Verizon towers for roaming, and roaming is free on most plans they offer. I've only roamed 2-3 times since i've had their service though and it wasn't anywhere around me, it was in Florida.

Sprint does roam off of Verizon towers, but there is one little caveat. If they decide that you roam too much, they reserve the right to kick you to the curb. Granted, they have to provide notice, it could still be inconvenient. Also, I've noticed most of our handsets seem to want to hit Sprint towers rather than Verizon towers. My phone constantly searching for a signal really takes its toll on my battery.

[Dattebayo]

If you want reliable coverage in rural areas, you're going to want to stick with Verizon or AT&T.

I think that if you had bothered to travel much, you would find that statement to be a raging fallacy.
Verizon tends to work best in Urban areas both inside and out of buildings. AT&T works in urban areas, but not really so well in buildings. They both also tend to have good connections is some rural areas, but not all. AT&T has barely any rural coverage that isn't right off a freeway. Verizon has more, but it's more of a 50/50 chance of getting a reliable signal. I have a client in TN who is way out in the boonies, and I barely get enough signal for Verizon to work. AT&T is a bust even tho they advertise good signal in the area. I have a feeling they falsify information in those coverage maps because they are generally inaccurate...

[Kompresshun]

Verizon tends to work best in Urban areas both inside and out of buildings. AT&T works in urban areas, but not really so well in buildings. They both also tend to have good connections is some rural areas, but not all. AT&T has barely any rural coverage that isn't right off a freeway. Verizon has more, but it's more of a 50/50 chance of getting a reliable signal. I have a client in TN who is way out in the boonies, and I barely get enough signal for Verizon to work. AT&T is a bust even tho they advertise good signal in the area. I have a feeling they falsify information in those coverage maps because they are generally inaccurate...

^Right on the money

I have had every major carrier out there and every single time i've had AT&T, they're coverage area was nowhere near what they advertised. Verizon had excellent coverage, but as Dave said getting a reliable signal was a crap shoot. Sprint has definitely improved since the last time I had them, which was years ago.

I've learned that when i'm shopping for a carrier, I don't choose based on their coverage area, because it's usually a steaming pile of crap to make them look better. I also have found that most carriers usually give you 30 days before you're locked in for the whole contract, so if their service blows within that 30 days, just take it back and go with someone else. Ask them about it when you're buying the phone and see what the terms are, but with Sprint they told me that they had a 30 day full money back satisfaction guarantee with their service.

[Jesda]

The doom-and-gloom outlook overlooks the forward march of technology itself.

In a decade or more, GSM and CDMA may be entirely irrelevant, and I'm unwilling to use the force of government to restrict enterprises from seeking efficiencies out of a narrowly perceived belief that the technological status quo will be around forever. There may have been merit to this perspective a century ago, but the rapid growth in human population, widespread expansion of low-cost communication, and the emergence of global economic powers invalidate most concerns over any kind of imagined technological hegemony.

The barriers and regulations you create now (with the help of government) may be with us for decades, and their unintended consequences could linger.

[MinisterofDOOM]

While I agree with Jesda's sentiment, as a current T-mobile customer I could NOT be happier to see this blocked. I was with AT&T years ago, and they were absolutely terrible to deal with. I've been very happy with T-mobile and have been dreading the merger since its announcement. I'm glad I won't have to deal with AT&T once again.

The doom-and-gloom outlook overlooks the forward march of technology itself.

My reply is knowingly short-sighted and selfish: I DO NOT want to be an AT&T customer. I don't give a damn about 10 years from now. NEXT year, I want to be free of AT&T, and I don't want to have to buy a new phone or sign a new contract or do any sort of s*** to achieve that. I signed up with T-mobile almost a decade ago and I did so for a reason. If I wanted to be an AT&T customer I'd have gotten a contract with them. IF this sort of thing were to happen, it had better damn well come with provisions for people like me to escape our contracts penalty-free. My contract doesn't say s*** about AT&T controlling my service. AT&T is trash, and I will not be forced into doing business with them.

[Encryptshun]

I think we're missing a critical outcome of this decision.



I swear it's like Liv Tyler and Kelly Lebrock (the '80s hot Kelly Lebrock, not the marshmallow currently masquerading as Kelly Lebrock) had a kid.

[Jesda]

My reply is knowingly short-sighted and selfish: I DO NOT want to be an AT&T customer. I don't give a damn about 10 years from now.

Don't be an AT&T customer. If you have a wallet, vote with it.


What you're unintentionally suggesting is that it's okay for a federal agency (or a court, in this case) to interfere with business on matters that don't pose a threat to life or safety, all in the name of your preference and convenience. By allowing federal intervention, not only are potential operating efficiencies lost, carriers are then justified in asking regulators to control the type and quantity of data used by consumers. They effectively become utility providers, coddled and controlled, unable/unmotivated to innovate, invest, and adapt.

The tech sector has been the exception to American business, moving too swiftly and changing too dramatically for regulators to effectively intervene.

Look at Microsoft. The DOJ considered breaking up the company, and just 5 years after the case was settled, the operating environment changed dramatically. Previously perceived threats and barriers were quickly destroyed through competition as new players took over. Microsoft's platform dominance is being threatened in high-growth categories by Apple and Google among others.

That kind of competitive dynamic produces far more 'convenience' for you, the consumer, than rigidly refusing to adapt to changes in products and services.

The DOJ's actions (backed strongly by Microsoft's direct competitors -- http://perspicuity.net/sd/pub-choice.html) were based on their belief that the future of technology was hampered by Microsoft's position. They predicted wrongly and the results of their actions could have been disastrous. Government is not prescient. It merely reacts to its perception of reality, and the ability of government to comprehend and understand technology is limited, as limited as your grandmother trying to double-click.