It is hard to avoid becoming cynical when watching the federal government interact with big corporations like AT&T. So when AT&T announced it would merge with T-Mobile, giving AT&T and Verizon a combined 3 out of 4 cellular subscribers, I thought two things:
1) What a terrible idea. Higher prices, fewer jobs, less choices, etc.
2) The Federal Government will likely not prevent it - instead opting for some minor concessions that no one will bother to enforce.
Sometimes, it is very good to be wrong.
Cecilia Kang of the Washington Post, decodes the language from Wall Street to explain the biggest winner from the federal government blocking the merger: consumers.
“Without the combination, we think the wireless industry will be further weakened by continued hypercompetitive activity, particularly regarding subscriber acquisition costs,” said Nomura Securities analyst Mike McCormack.
That means customers can still get lower rates as the industry competes for their dollars. T-Mobile, for example, will continue to be a low-cost competitor, according to consumer advocacy group Consumers Union. A survey showed that data plans from T-Mobile were $15 to $50 less per month than those offered by AT&T.
An excellent reminder that what is best for Wall Street is not what is best for the 99%. Big companies like AT&T find competing for customers a hassle that lowers their profits -- they consider a market with four sellers to be hypercompetitive. In wireline, they have acquiesced to the "competition" of two competitors -- cable and DSL.
This is one reason communities build their own networks -- the private sector is not truly competitive when it comes to ISPs and most communities have no prospect real of improvement absent a public investment.
But we should rejoice in this victory -- because we earned it. Without the hard work of many grassroots groups, it is hard to imagine the Department of Justice or FCC standing up to such a powerful corporation.
Some quotes from some of the many organizations responsible for protecting the 99% of us who don't benefit from higher prices and fewer choices.
Andrea Quijada of the Media Literacy Project:
“The end of AT&T’s campaign to eliminate mobile competition and jobs is a gift to working class New Mexican families this holiday season. However, we know that this decision was not the result of AT&T putting people before profit. This result was won by media justice advocates and our allies in New Mexico and nationwide. Though we are certain this is not the last we’ve heard from AT&T/T-Mobile, we want to take a moment to acknowledge this victory for consumers.
The National Hispanic Media Coalition spoke out against the merger and celebrated its demise:
"AT&T has finally accepted that its bid for T-Mobile has run its course. NHMC is very pleased that the FCC and the DOJ have so justly put the little guys ahead of giant corporations in their review of this merger. Latinos pay more for cell phone service than any other ethnic or racial group, paying the most on AT&T and the least on T-Mobile. In addition, because T-Mobile's workforce is nearly 50% people of color, and an estimated 20,000 T-Mobile employees would have lost their jobs as a result of this merger, Latinos and other people of color would have been disproportionately harmed. For these reasons, NHMC has worked hard over the past seven months to educate people about the harms of merger. We are ecstatic to have defeated it," comments Jessica González, NHMC's Vice President of Legal and Policy Affairs.
The Center for Media Justice issued these comments:
amalia deloney, Media Policy Field Director of Center for Media Justice stated, “Since AT&T first announced its intent to takeover T-Mobile, the Center for Media Justice has continuously raised concerns about what role a duopoly would mean for historically marginalized communities— particularly communities of color and America’s poor who disproportionately rely on access to mobile broadband to find employment, access healthcare, advance their education and organize for social and economic justice.”
This holiday season, millions of folks across the country will not be blind-sided by high phone bills, and T-Mobile employees – many of whom are people of color and all of whom are nonunion- will get to keep their jobs. Today marks an important victory for rural and poor communities, people of color, and the hard workers of America who simply can’t afford to pad the pockets of the corporate CEOs.
And finally, the Media Acess Project:
Today’s announcement proves that law trumps politics. This anti-competitive transaction clearly exceeded permissible standards. AT&T and T-Mobile thought they could push it through by using lobbyists and political pressure, but the FCC and Department of Justice held firm.