AT&T Defends T-Mobile Merger: It’s a Good Thing, Really!

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In case you hadn’t heard, AT&T and T-Mobile could soon become one. But what does that mean for the rest of us?

All good news for AT&T customers, says AT&T Chief Executive Randall Stephenson, so, you know, take the following comments with a grain of salt.

Stephenson says that if the merger is approved, the network will improve up to 30 percent in some of the biggest U.S. cities, including New York City where wireless service is sometimes so bad you might as well jump on the subway and wait to chat in person. Those exorbitant charges for overseas roaming will come down, too, thanks to the much larger combined worldwide network. And in an appeal to your charitable side, AT&T’s merger will help with the U.S. Federal Communications Commission goal of making broadband widely available to everyone by offering the company’s Long-Term Evolution or LTE Technology to 46.5 million additional customers.

Better service is great, but the real concern for most AT&T customers (and frankly anyone who uses a cell phone) is how the merger would affect contract prices. Some parties are worried that by narrowing the competition floor to three companies, your monthly bill could skyrocket. Let’s give that a number: 80 percent of wireless cellular service would fall under AT&T-Mobile (see what we did there?) and Verizon.

No surprise then that Sprint’s been especially vocal in opposing the merger, saying “The transaction…would reverse nearly three decades of actions by the U.S. government and the courts that modernized and opened U.S. communications markets to competition. The wireless industry…could be undone by this transaction.”

In response, AT&T’s Stephenson argues that higher-bill phobia isn’t justified. When asked if there needed to be price restrictions in place for the merger to be approved by both the FCC and the Justice Department, Stephenson said “This is an intensely competitive industry… It is intense before we do this transaction, it will be intense after we do this transaction.” He also claims that over the last decade, prices fell on average 50 percent, despite five wireless provider mergers.

He has a point. An increased AT&T market presence would force Verizon to step up its LTE network game. And then there’s Verizon’s iPhone: AT&T had a monopoly on iPhone sales for years, but wound up introducing tethering plans and cheaper data options in response to Verizon’s iPhone 4 launch in February.

All of which means you’ll find reasonable arguments from both sides, and that we’ll just have to see which ones the FCC finds the most persuasive rolling forward.

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