Web Only / Views » May 10, 2011
AT&T Wants to Monopolize Everything
If you've managed to avoid AT&T's shoddy cellular service, I'd like to extend my congratulations—and then my condolences.
If you’re one of AT&T’s 96 million customers, no doubt you’ve experienced the frustrations of dropped calls or weak signals, even in the middle of a metropolis. The sleekest apps and Luke Wilson’s charm can’t hide the fact that AT&T’s network is sometimes akin to paying for a four-star meal, but getting a frozen dinner.
I’d go even further: iPhone users stuck on AT&T’s network have been victimized by one of the greatest cons in recent years. The company has convinced millions of people to shell out big bucks for a service that it doesn’t have the wireless capacity to properly offer.
If you’ve managed to avoid AT&T’s shoddy cellular service–most likely by signing a contract with T-Mobile, Verizon or Sprint–I’d like to extend my congratulations, and then my condolences. In March, AT&T announced plans to acquire T-Mobile’s 34 million customers in a $39 billion merger deal, further securing both AT&T’s empire and its suckiness – and making it harder to avoid them. With a combined 130 million customers, AT&T/T-Mobile would control the mobile communications of two-fifths of all Americans. Not all cell phone users in America – all Americans. (There are 302.9 million wireless subscriber accounts in the United States – -just 8 million less than the country’s population.)
But before AT&T sets out to conquer the country, it should commit to serving the customers it already has. The company has significantly underinvested in its own infrastructure, but still wants to grow its customer base – all while telling us things will actually improve. On April 29, one week after AT&T began the official merger review process conducted by the Federal Communications Commission, the company filed a 400-page document with the agency outlining the public benefits for this merger and arguing it will stimulate the economy and promote innovation.
Those claims are rotten. In reality, this deal is simply about eliminating a competitor and entrenching AT&T’s market dominance. AT&T is using the slogan “Mobilize Everything” to sell the deal, but it’s real goal is to “Monopolize Everything,” as Free Press Research Director S. Derek Turner has said. Welcome back, Ma Bell. The proposed merger would further consolidate the national wireless market, leaving just three national carriers and giving Verizon and AT&T control of nearly 80 percent of the market – and further disadvantaging smaller regional carriers and Sprint, calls that scenario “an entrenched duopoly.”
In a speech on the Senate floor last week, Sen. Al Franken (D-Minn.) said the merger would raise prices for consumers and decrease consumer choice in the marketplace. I agree: The public shouldn’t have to endure more bad behavior from AT&T as a result of an unnecessary and harmful merger. As Turner argues:
AT&T is falling back on its tired claim that this merger would give it the opportunity to improve service and deployment of its wireless network, but the fact is, AT&T doesn’t need to merge with anyone to remedy the problems it created for itself by chronically under-investing in its network. It’s already sitting on plenty of unused spectrum, and it continues to earn record profits. It’s simply a false choice to ask Americans to pay higher prices, endure poor customer service and sacrifice innovation in exchange for fulfilling deployment promises that AT&T has already made.
AT&T is lobbying hard to pass this merger, and spending millions to make sure Congress sways its way. To get a sense of its lobbying prowess, check out this number: AT&T, the second highest donor to members of Congress between 1989 through 2010, spent more than $46 million wooing lawmakers during that period, including $4 million just during the last election cycle, according to the Center for Responsive Politics.
Congress, the FCC and the Department of Justice–the Washington headquarters of which, incidentally, gets terrible AT&T coverage–are evaluating the merger. AT&T will appear before the Senate Antitrust Subcommittee on Wednesday, May 11, to plead its case. The FCC and the Department of Justice should reject this bid and see it for what it really is: AT&T’s attempt to Monopolize Everything and restore Ma Bell.
Megan Tady works for Free Press, an advocacy organization that opposes the proposed merger.
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Megan Tady is a blogger and video producer for Free Press, the national nonprofit media reform organization. She writes a monthly InTheseTimes.com column on media issues. Follow her on Twitter: @MegTady.
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