FCC Pledges Extensive Review Of AT&T/T-Mobile Deal, Chairman Hints At Lack Of Competition

Sure, Deutsche Telekom may be losing money on T-Mobile over here in the US, but look at the system that’s in place. Verizon and Sprint still rely on CDMA in order to do anything (and that’s the main reason that Verizon STILL can’t do data/voice simultaneously), while AT&T and T-Mobile are the main TDMA/GSM providers. Sure, there’s a tiny bit of spectrum overlap at 900 MHz, but T-Mobile also operates in the 1.8 GHz range. AT&T has done an extremely poor job of both their network development AND customer service, so much so that it’s only logical (for them) to buy up the competition. Problem is, nobody else is able to compete with AT&T because of their access technology. The reason GSM is wildly popular in Europe is that not only are the devices unlocked, but much like everything else, country borders include their RF spectrum. It’s entirely possible that you could go through several countries within a day’s travel, but you need to ensure that your equipment is going to work in each country you pass through. No way around it.

Here, it’s a bit different. It’s just a giant expanse, but we can’t seem to get past the fact that a lot of people have the ol’ NIMBY attitude when it comes to any sort of infrastructure project (substation, tower, highway, etc.). If people understand the fact that a couple of extra cell towers, as “hideous” as they may look (which people really need to get over), may provide the right amount of connectivity and coverage, there wouldn’t be so many issues with specific carriers. Also, this whole “subsidizing” thing is a pain, too. People are beginning to catch on to the fact that they can get a phone off of eBay or (horrors) bring one back from overseas and it’ll work here with the right SIM card inserted. T-Mobile’s had it right to let market forces work to get subscribers (although it’s a pain with the ETF in place right now) with the EM+ plans. That’s choice. AT&T and VZW want nothing to do with that model because they know they’ll end up losing more money. DT’s not happy about it, sure, but that’s because people don’t want to do the simple math and say, “Hey, I’m paying less per month on my service because I’m not locked into anything, and I don’t HAVE to buy a new phone from the provider if I don’t want to.”

And don’t forget their awesome line up of upcoming android phones

And AT&T better be ready with an answer on what it intends to do with T-Mobile’s 42,000 thousand employees.

Fact is, with an acquisition AT&T biggest headache is labor costs. Obviously AT&T does not intend to absorb T-Mobile’s monthly payroll, that’s in the billions. That expense is the main reason acquiring companies fire most of the acquired company’s employees.

But in these hard economic times and the fragile recovery period, Washington is not going to let AT&T add thousands to the nation’s unemployment rolls. In fact, in looking closely at this transaction Congress and regulators could be bowing to pressure from the White House, to not approve this deal (or at least delay until after the 2012 election) . Reason: the nation simply can’t afford to lose that many jobs.

Sidenote: Unemployment concerns and “what to do about T-Mobile employees” could be the bases for Washington to get concessions from AT&T, significant stipulations, if you will.

And I still think that the way AT&T might deal with all the headaches is to agree to operate T-Mobile as an “intact” separate division or entity, for at least the next five years, during which time AT&T can slowly absorb or fold T-Mobile into AT&T. That’s the only way I see AT&T mollifying people and entities opposed to this deal.

If they base it off of the factors that are mentioned, the ‘merger’ should clearly not go through. So, I put my faith in them staying true to their word for how they’ll make a final decision in this review.

We are in for a dramatic and exciting ride for the rest of this year! I just hope we don’t see a lot of these little victories only to be sold off like cattle.