AT&T’s potential acquisition of T-Mobile has been stirring up a lot of controversy lately, and yesterday the U.S. Senate hit executives from both companies with some hard-hitting questions. Why is the merger necessary? Aren’t AT&T and T-Mobile direct competitors? AT&T CEO Randall Stephenson and T-Mobile CEO Phillipp Humm dodged most of these questions and fed the Senate answers that are straight out of the PR playbook – answers that we’ve already heard before.
Other carriers and their executives chimed in. ThisIsMyNext reports (emphasis my own):
Sprint CEO Dan Hesse and Cellular South CEO Victor Meena argued forcefully against the merger, saying that they wouldn’t be able to compete with a duopoly that Hesse quite charmingly referred to as “the Twin Bells.” (Meena later said it was “only a matter of time before Ma Bell came back as two sisters,” which took a solid second place in the metaphor competition.) Notably, Hesse admitted that allowing the merger would increase the chances of Verizon acquiring Sprint, which we haven’t heard Sprint say as directly in the past.
It’s bad enough that there are plenty of jokes surrounding AT&T’s return to monopolistic dominance, but to think that the U.S. would be forced to deal with a duopoly between AT&T and Verizon is undoubtedly bad for consumers.
The carriers are having a difficult time coming up with reasonably good excuses in favor of the merger, but there are few gems:
AT&T’s best argument of the day? A promise that it will build rural broadband covering 97 percent of Americans with entirely private funds, freeing taxpayer money to hit the remaining three percent.
The question is whether the good will ultimately outweigh the bad, and in my opinion the potential negative outcomes seem insurmountable. Lack of choice for consumers and control over such a huge market when it comes to pricing and technological options could stifle innovation even more. Count me in on the side of Dan Hesse and everyone else against the merger–it seems like it’s just a bad idea.