5 Despicable Things About AT&T's Mega-Merger With T-Mobile
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When was the last time a merger actually created jobs for Americans and not more pink slips? This merger is no different. And yet that hasn't stopped AT&T from wrapping itself in the flag by noting that T-Mobile is a subsidiary of a German company.
But T-Mobile USA is based in Bellevue, Washington and employs nearly 40,000 U.S. citizens. The plain fact is that AT&T plans to put these American jobs at risk. Their executives say the plan to save $40 billion through merger "synergies." This means that many of the T-Mobile jobs at retail stores and call centers will be eliminated. The planned shuttering of thousands of wireless towers will result in the firing of an untold number of technicians. And there will be more jobs lost as the cost-cutting effects of this merger ripple through the broader economy.
4. This merger is a raw deal for American innovation.
The merger would stifle innovation both in devices and on the network. The combined carriers would be able to leverage an unfair amount of market power to prioritize which handsets get used, what technologies work on those handsets and which Apps you'll be able to upload from the network (Imagine AT&T prioritizing it's own inferior voice recognition and navigation applications over those offered by Google or a innovating startup).
According to the Wall Street Journal, handset manufacturers are remaining mum on the deal, possibly out of a "fear of angering a powerful customer" in AT&T, which can make or break a device by simply deciding to allow it on its network.
Would a merged AT&T permit any device innovation that challenges its bottom line? Using history as a guide, the likely answer would be, "no."
5. The merger is a threat to free speech and openness on the wireless web.
AT&T along with Verizon has fiercely opposed any wireless Net Neutrality requirements, with AT&T brokering a deal with the FCC to ensure they have the legal right to block online content and charge application developers additional tolls just to reach AT&T customers.
The FCC's weak Net Neutrality decision was the result -- exempting mobile services from openness protections based on Chairman Julius Genachowski's assumptions that competition existed in wireless.
With further consolidation AT&T and Verizon will be in an even stronger position to play gatekeeper on the wireless web, picking winners and losers, limiting our ability to connect and share information and ultimately slowing the pace of mobile Internet innovation.
The fact of this merger shows how the U.S. must have strong Net Neutrality rules, according to Sen. Dick Blumenthal of Connecticut: "Regulatory approval should contain strict conditions to ensure that consumer concerns about cost, access, choice, and competition are adequately addressed. Moreover, such high wireless market concentration raises serious potential net-neutrality concerns that should be addressed. The largest mobile network in the nation must not be allowed to limit access to content in a discriminatory manner."
Timothy Karr is the author of MediaCitizen, a weblog about the future of America's media. He is the campaign director of Free Press. From September 2003 through February 2005, Karr was executive director of MediaChannel.org and Media for Democracy.