The 'most brazen merger proposal in history'?

Antitrust experts tell us what they really think about proposed AT&T, T-Mobile deal

Hyperbole surely is no stranger to Washington -- it almost deserves its own Cabinet position -- so it's no surprise that opposition to AT&T's bid to purchase rival wireless carrier T-Mobile USA is being expressed in rather blunt language.

Antitrust experts on Tuesday described the proposed merger of the No. 2 and No. 4 mobile carriers as potentially disastrous for consumers as well as the U.S. tech industry.

(Also see: AT&T, T-Mobile chief executives pitch merger to skeptical antitrust panel )

From IDG News Service's Grant Gross:

The deal is "about the most brazen merger proposal in history," said Ed Black, president and CEO of the Computer and Communications Industry Association (CCIA), a trade group that has pushed for strong antitrust enforcement in the tech industry.

Black said during a press conference in Washington that the deal -- which, if approved, would leave the two combined companies and Verizon Wireless to dominate the U.S. mobile market (and Sprint Nextel gasping for air) -- would be damaging to "mobile software vendors, equipment vendors, operating system developers and other tech companies," Gross writes.

"It is the view of most of the tech industry that innovation ... is driven by competition," [Black] said.

Except for when you're a giant corporation trying to dominate a market by killing off or buying up competitors. Then you realize that all this "competition" is counter-productive and costly, because "bigger is better" for consumers.

That was essentially the argument made before a congressional panel earlier this month by AT&T chief executive Randall Stephenson.

“It’s a very basic concept that in any industry, greater capacity is a fundamental driver of competition,” Stephenson said. “Over the last decade, U.S. wireless prices have steadily come down and this transaction will allow that to continue.”

And someday, if U.S. consumers are really lucky, there'll be only one large wireless carrier to serve them. Talk about a golden age. I bet wireless will almost be free!

Another antitrust expert, Richard Brunell, director of legal advocacy at the American Antitrust Institute (AAI), on Tuesday said if the U.S. Department of Justice and the Federal Communications Commission hewed to antitrust precedence, they would spike the proposed $39 billion deal.

Of course, what Brunell fails to understand is that the real competition facing AT&T comes not from major national carriers such as Verizon and Sprint, but from those vexing regional wireless providers nipping at its heels! AT&T has patiently tried to explain this, but no one in Washington really listens unless you write a big check to their re-election campaign.

However, hope springs eternal at AT&T, where a spokeswoman on Tuesday said:

"We are confident that regulatory approvals will be obtained after a thorough review of the facts and law, because of the significant consumer, public policy and economic benefits resulting from the transaction and because competition will continue to thrive."

Significant benefits!

If only those jaded antitrust officials could be as unselfish and civic-minded as AT&T.

From CIO: 8 Free Online Courses to Grow Your Tech Skills
Join the discussion
Be the first to comment on this article. Our Commenting Policies