Leaked AT&T letter on the T-Mobile merger
August 13, 2011 10:47 AM Subscribe
Leaked AT&T Letter Demolishes Case For T-Mobile Merger. In trying to gain legal approval for a $39 billion T-Mobile buyout, AT&T has publicly claimed that they need T-Mobile to improve LTE coverage and that the merger would increase network investment. This document tells a different story, of AT&T telling investors that they would actually decrease investment in the network and that the actual cost to improve their LTE network is much less than the $39 billion they are spending on T-Mobile. AT&T has told Wireless Week that the letter contains no new information.
A corporation lying to the public about the reasons they seek to conduct a certain bit of controversial and needing-regulator-approval business?
This is my shocked face.
posted by hippybear at 10:52 AM on August 13, 2011 [4 favorites]
This is my shocked face.
posted by hippybear at 10:52 AM on August 13, 2011 [4 favorites]
I have read through almost all of the FCC filings related to the AT&T-T-Mobile merger (at least the publicly-available ones -- many documents are subject to a protective order) and I have to say that AT&T is right. Nothing in the accidentally-posted letter contradicts anything they've said. It does give some insight into their strategy, but it doesn't "demolish the case" for the merger.
Now, I happen think there are significant problems with the merger from a competition perspective. But there's nothing new here with respect to AT&T's claims about expanded LTE coverage (and I'd think it's likely that, if the merger is allowed to go through, that expanded LTE coverage will be a required condition by both the FCC and the DOJ).
posted by devinemissk at 11:00 AM on August 13, 2011 [1 favorite]
Now, I happen think there are significant problems with the merger from a competition perspective. But there's nothing new here with respect to AT&T's claims about expanded LTE coverage (and I'd think it's likely that, if the merger is allowed to go through, that expanded LTE coverage will be a required condition by both the FCC and the DOJ).
posted by devinemissk at 11:00 AM on August 13, 2011 [1 favorite]
The content of the letter isn't a surprise. It is that they actually wrote it down. Of course it would be cheaper for ATT to expand its LTE network itself rather than buy T-Mo. It is buying T-Mo to make a small competitor go away and buy their customer base to beat Verizon. Nothing more. They will still need to spend the exact same to roll out LTE to the smaller markets they would have without T-Mo. It isn't like T-Mo has LTE already or good coverage outside the same areas as AT&T.
posted by birdherder at 11:00 AM on August 13, 2011
posted by birdherder at 11:00 AM on August 13, 2011
Surprise, surprise.
It's the same old story: If you're a worker you can't have a union behind you, because consolidation gives you too much power, and, besides, competition on the merits is really the American way. If you're a corporation, it's the exact fucking opposite.
We even have entire government divisions to help it all along. The FCC hasn't looked out for the public in forever.
posted by Benny Andajetz at 11:20 AM on August 13, 2011 [27 favorites]
It's the same old story: If you're a worker you can't have a union behind you, because consolidation gives you too much power, and, besides, competition on the merits is really the American way. If you're a corporation, it's the exact fucking opposite.
We even have entire government divisions to help it all along. The FCC hasn't looked out for the public in forever.
posted by Benny Andajetz at 11:20 AM on August 13, 2011 [27 favorites]
I'm both wary of AT&T's claims about the coverage and the claim that the letter "demolishes" the reasons for the merger."l
posted by Ironmouth at 11:34 AM on August 13, 2011 [1 favorite]
posted by Ironmouth at 11:34 AM on August 13, 2011 [1 favorite]
Where is the letter?
posted by kuatto at 11:48 AM on August 13, 2011 [1 favorite]
posted by kuatto at 11:48 AM on August 13, 2011 [1 favorite]
The fact that these are the motives to which AT&T says are nothing new and yet this merger is being even considered is more telling than the reveal of the letter.
posted by JakeEXTREME at 11:48 AM on August 13, 2011 [2 favorites]
posted by JakeEXTREME at 11:48 AM on August 13, 2011 [2 favorites]
The thing that bugs me most about this isn't AT&T's suspect claims about coverage, or the fact that a more price-competitive service-oriented company is being swallowed up by a more expensive and apparently service-indifferent one (though thisall bugs me more than a little).
It's the fact that if this merger goes through, this is effectively the death of device-network independence in the United States.
The idea that your computer would only work with a given ISP is one most people would find utterly ridiculous, but most people already seem ready to accept that a given mobile phone is "a Sprint Phone" (or a Verizon Phone, or what have you). Unlocked GSM devices are rare enough, but they exist and if you chose to get one (or unlock a device you have), you can jump between two(!) whole providers.
If the TMo/AT&T merger goes through, unlocked GSM devices will just be AT&T phones. There will be no other GSM providers.
The only silver lining is that I think it's possible that mobile smartphones might become cheap enough that you can buy a decent one for less than the cost of a month of service and it won't matter so much.
posted by weston at 11:53 AM on August 13, 2011 [1 favorite]
It's the fact that if this merger goes through, this is effectively the death of device-network independence in the United States.
The idea that your computer would only work with a given ISP is one most people would find utterly ridiculous, but most people already seem ready to accept that a given mobile phone is "a Sprint Phone" (or a Verizon Phone, or what have you). Unlocked GSM devices are rare enough, but they exist and if you chose to get one (or unlock a device you have), you can jump between two(!) whole providers.
If the TMo/AT&T merger goes through, unlocked GSM devices will just be AT&T phones. There will be no other GSM providers.
The only silver lining is that I think it's possible that mobile smartphones might become cheap enough that you can buy a decent one for less than the cost of a month of service and it won't matter so much.
posted by weston at 11:53 AM on August 13, 2011 [1 favorite]
AT&T has told Wireless Week that the letter contains no new information.
Well, not new to AT&T, that is.
posted by Thorzdad at 12:00 PM on August 13, 2011
Well, not new to AT&T, that is.
posted by Thorzdad at 12:00 PM on August 13, 2011
Please let this be true and put a halt to this fucked up metaphorical land grab.
I don't want to be an AT&T customer. I like my phone just the way it is.
I actually kind of like T-Mobile as a company. They treat me ok even though I'm a penny-pinching pre-paid user. I have yet to find a pre-paid plan where I can buy minutes and I don't have to use them for an entire year. Most of those prepaid plans you lose purchased minutes if you don't use them in as little as 30 days, and they have crap like "daily usage fees" and all kinds of other ways to wring money out of people.
Sure, I still pay more per actual minute of phone use or SMS, but I spend as little as a couple of bucks on my phone in an entire month, so it's cheaper than shackling myself to even the cheapest monthly plans on any carrier.
Anyway, didn't we bust up AT&T for a reason? Is it time to do it again?
posted by loquacious at 12:02 PM on August 13, 2011 [7 favorites]
I don't want to be an AT&T customer. I like my phone just the way it is.
I actually kind of like T-Mobile as a company. They treat me ok even though I'm a penny-pinching pre-paid user. I have yet to find a pre-paid plan where I can buy minutes and I don't have to use them for an entire year. Most of those prepaid plans you lose purchased minutes if you don't use them in as little as 30 days, and they have crap like "daily usage fees" and all kinds of other ways to wring money out of people.
Sure, I still pay more per actual minute of phone use or SMS, but I spend as little as a couple of bucks on my phone in an entire month, so it's cheaper than shackling myself to even the cheapest monthly plans on any carrier.
Anyway, didn't we bust up AT&T for a reason? Is it time to do it again?
posted by loquacious at 12:02 PM on August 13, 2011 [7 favorites]
There will be no other GSM providers.
Hell, I didn't even think about that. In my alarming naivety I'd just assumed AT&T would keep operating the GSM networks. I also don't want a new phone, much less being forced to a new carrier.
posted by loquacious at 12:19 PM on August 13, 2011
Hell, I didn't even think about that. In my alarming naivety I'd just assumed AT&T would keep operating the GSM networks. I also don't want a new phone, much less being forced to a new carrier.
posted by loquacious at 12:19 PM on August 13, 2011
If you're a corporation, it's the exact fucking opposite.
THIS.
We need some meta-regulation that limits corporations to, say, $1 bn gross income. Or less. And no "industry lobby". *Then* we'd see some competition and value to the consumers. Not to mention a government that works for actual human beings a little bit.
posted by DU at 12:19 PM on August 13, 2011 [4 favorites]
THIS.
We need some meta-regulation that limits corporations to, say, $1 bn gross income. Or less. And no "industry lobby". *Then* we'd see some competition and value to the consumers. Not to mention a government that works for actual human beings a little bit.
posted by DU at 12:19 PM on August 13, 2011 [4 favorites]
I don't want to be an AT&T customer. I like my phone just the way it is.
Yeah, this is the thing. I didn't become a T-Mobile customer because I was avoiding AT&T (though so people are, it seems). I don't even remember why I picked T-Mobile. It was cheapest probably. I take a look at the other companies once in a while and, lo and behold, I'm still with T-Mobile.
Just about the only upside to this merger for me that I can see is that my best friend and I would be on the same network and could maybe talk to each other without it using minutes. There's a slim possibility that they'd try and position the T-Mobile brand 'downmarket', I suppose, and let us keep our cheaper rates. (Why do I think this? Was it ever floated as a possibility?)
posted by hoyland at 12:19 PM on August 13, 2011
Yeah, this is the thing. I didn't become a T-Mobile customer because I was avoiding AT&T (though so people are, it seems). I don't even remember why I picked T-Mobile. It was cheapest probably. I take a look at the other companies once in a while and, lo and behold, I'm still with T-Mobile.
Just about the only upside to this merger for me that I can see is that my best friend and I would be on the same network and could maybe talk to each other without it using minutes. There's a slim possibility that they'd try and position the T-Mobile brand 'downmarket', I suppose, and let us keep our cheaper rates. (Why do I think this? Was it ever floated as a possibility?)
posted by hoyland at 12:19 PM on August 13, 2011
I Wish These Parody Ads About the AT&T-Mobile Merger Were Funnier
posted by homunculus at 12:24 PM on August 13, 2011 [1 favorite]
posted by homunculus at 12:24 PM on August 13, 2011 [1 favorite]
I'd just assumed AT&T would keep operating the GSM networks
AT&T is GSM, just like T-Mobile. The issue with the merger is that, if it is allowed, there will be only one GSM provider in the US. Of course, right now just because you have a T-Mobile GSM phone doesn't mean you can move it to AT&T or vice versa (this works for some phones but not for all).
The bigger competitive poblem with the merger (and these arguments are all raised in various comments and petitions filed and available to read in the FCC docket) is that by buying its only GSM competitor -- and the low-cost competitor to boot -- AT&T is putting itself in the position of being able to raise prices not just prices for YOU (and any other retail customer) but also for wholesale customers like small wireless companies that don't actually own their own spectrum and buy capacity from larger providers. Those companies are generally buying from AT&T already because AT&T has the capacity to sell (and T-Mobile really doesn't), but the prices are constrained somewhat by the presence of a competitor. Without that competitor, AT&T could theoretically raise prices -- or worse, just decide to stop reselling to certain companies altogether, which would result in higher prices, particularly in rural areas. Of course, wholesale pricing and resale is also likely to end up being a required condition of the merger should it go through.*
*The problem with required conditions on such transactions is that they tend to have a finite life, around three or so years.
posted by devinemissk at 12:31 PM on August 13, 2011 [4 favorites]
AT&T is GSM, just like T-Mobile. The issue with the merger is that, if it is allowed, there will be only one GSM provider in the US. Of course, right now just because you have a T-Mobile GSM phone doesn't mean you can move it to AT&T or vice versa (this works for some phones but not for all).
The bigger competitive poblem with the merger (and these arguments are all raised in various comments and petitions filed and available to read in the FCC docket) is that by buying its only GSM competitor -- and the low-cost competitor to boot -- AT&T is putting itself in the position of being able to raise prices not just prices for YOU (and any other retail customer) but also for wholesale customers like small wireless companies that don't actually own their own spectrum and buy capacity from larger providers. Those companies are generally buying from AT&T already because AT&T has the capacity to sell (and T-Mobile really doesn't), but the prices are constrained somewhat by the presence of a competitor. Without that competitor, AT&T could theoretically raise prices -- or worse, just decide to stop reselling to certain companies altogether, which would result in higher prices, particularly in rural areas. Of course, wholesale pricing and resale is also likely to end up being a required condition of the merger should it go through.*
*The problem with required conditions on such transactions is that they tend to have a finite life, around three or so years.
posted by devinemissk at 12:31 PM on August 13, 2011 [4 favorites]
This merger would make ATT just big enough to split in anti-trust. Perhaps the GSM network should go a separate way than the cell phone service.
posted by psycho-alchemy at 12:34 PM on August 13, 2011
posted by psycho-alchemy at 12:34 PM on August 13, 2011
When the merger was announced, I said I was gone in 60 days. I have since changed it to "gone the day the merger is approved" because I am still holding out hope that it will not be.
AT+T is one of three companies on my Corporate Death Penalty list. (The other two being Bank of America and Comcast.) Yes, most big companies have something that one can complain about, but these three are sort of a Corporate All-Star Team of Bad For Customers.
posted by andreaazure at 12:34 PM on August 13, 2011
AT+T is one of three companies on my Corporate Death Penalty list. (The other two being Bank of America and Comcast.) Yes, most big companies have something that one can complain about, but these three are sort of a Corporate All-Star Team of Bad For Customers.
posted by andreaazure at 12:34 PM on August 13, 2011
these three are sort of a Corporate All-Star Team of Bad For Customers
Here is The Consumerist 2011 "Worst Company In America" contest results, complete with NCAA playoff style bracket and company info on all the lucky participants of every round.
BP may have one this year, but I'm sure you'll be pleased to see that all of your choices made it at least to the semi-finals.
posted by hippybear at 1:01 PM on August 13, 2011 [2 favorites]
Here is The Consumerist 2011 "Worst Company In America" contest results, complete with NCAA playoff style bracket and company info on all the lucky participants of every round.
BP may have one this year, but I'm sure you'll be pleased to see that all of your choices made it at least to the semi-finals.
posted by hippybear at 1:01 PM on August 13, 2011 [2 favorites]
Well, can’t say I’m surprised.
Christ, what a bunch of assholes.
posted by spitefulcrow at 1:10 PM on August 13, 2011
Christ, what a bunch of assholes.
posted by spitefulcrow at 1:10 PM on August 13, 2011
It's okay. AT&T is a singular (cingular? *heh*) person under the law, and their logo is vaguely sphincter-like. You can use "Christ, what an asshole" to refer to the company.
posted by hippybear at 1:16 PM on August 13, 2011
posted by hippybear at 1:16 PM on August 13, 2011
Im (not) sorry, when you buy a camera, you ARE a photographer.
posted by ReWayne at 1:18 PM on August 13, 2011
posted by ReWayne at 1:18 PM on August 13, 2011
That Consumerist worst company list needs to only include companies that people cannot avoid doing business with. Companies like Dell, Best Buy and Radio Shack are avoidable in comparison to companies like Koch Industries and Blue Cross who spend billions on lobbying efforts to fuck consumers endlessly.
posted by any major dude at 1:23 PM on August 13, 2011
posted by any major dude at 1:23 PM on August 13, 2011
any major dude: that list is compiled by Consumerist users, and is based on customer service issues (mainly), as far as I've gleaned over a few years of reading the website.
You're welcome to join the site and nominate the companies you feel should be on it for next year's brackets.
posted by hippybear at 1:29 PM on August 13, 2011
You're welcome to join the site and nominate the companies you feel should be on it for next year's brackets.
posted by hippybear at 1:29 PM on August 13, 2011
Im (not) sorry, when you buy a camera, you ARE a photographer.
If it's a camera phone, though...
posted by dirigibleman at 1:52 PM on August 13, 2011
If it's a camera phone, though...
posted by dirigibleman at 1:52 PM on August 13, 2011
Anyone got quantitative numbers on wffect on competetition if the merger goes throuigh. Like HH numbers?
posted by Ironmouth at 2:02 PM on August 13, 2011
posted by Ironmouth at 2:02 PM on August 13, 2011
Ironmouth, I believe HH numbers are usually filed with the FCC under a protective order (and DOJ wouldn't make them public). So they're probably not available, although I imagine there are probably some public white papers/reports out there that make educated guesses (though I'd say those guesses are likely to be inaccurate depending on who wrote/funded the paper).
posted by devinemissk at 2:14 PM on August 13, 2011
posted by devinemissk at 2:14 PM on August 13, 2011
I'll also note that what numbers there are out there (ranging from 2000 to 2600) seem to be based on the wireless market only and there are other market segments that regulators are probably concerned about.
posted by devinemissk at 2:24 PM on August 13, 2011
posted by devinemissk at 2:24 PM on August 13, 2011
A merger between AT&T and T-mobile doesn't simply mean higher prices, but shittier service. See The Five Levels of ISP Evil.
posted by jeffburdges at 2:52 PM on August 13, 2011 [1 favorite]
posted by jeffburdges at 2:52 PM on August 13, 2011 [1 favorite]
As soon as Sprint get's iPhone I'm gone.
posted by humanfont at 2:52 PM on August 13, 2011 [1 favorite]
posted by humanfont at 2:52 PM on August 13, 2011 [1 favorite]
...effectively the death of device-network independence...
This.
Monopoly isn't just a game, folks.
Amazing how we break up unions now, instead of monopolies, provide assistance and for corporations instead of people, forgive big business and condemn the individuals to prison for much less egregious crimes.
I absolutely hate the way we've turned into an oligarchy.
Fuck capitalism.
posted by BlueHorse at 2:56 PM on August 13, 2011 [5 favorites]
This.
Monopoly isn't just a game, folks.
Amazing how we break up unions now, instead of monopolies, provide assistance and for corporations instead of people, forgive big business and condemn the individuals to prison for much less egregious crimes.
I absolutely hate the way we've turned into an oligarchy.
Fuck capitalism.
posted by BlueHorse at 2:56 PM on August 13, 2011 [5 favorites]
a.t.&t. has more union employees than any other company in the USA. It might be a good thing for the middle class / unions if att stays strong and grows. Just grist for the mill.
posted by jcworth at 8:06 PM on August 13, 2011
posted by jcworth at 8:06 PM on August 13, 2011
ps - T-Mobile is a non-union shop. Likely the T-Mobile workers that make the transition are bout to get a very nice upgrade in lifestyle. T is one of few corporations that have both 401k matching and still have a pension.
posted by jcworth at 8:09 PM on August 13, 2011
posted by jcworth at 8:09 PM on August 13, 2011
*sigh*
It really would be nice to keep two notionally nationwide SIM-card-using carriers in the US. Verizon has committed to not using USIMs in their LTE phones, as I understand it. Having to call my provider and pay a fee to switch phones really irks me. At least in Verizon's case the switch can be done on the website for free, but that only works if you have web access, which may not be the case if you're switching because you already dropped your smartphone in the lake.
(I have both spare phones and spare unactivated SIMs around for just such an occasion. Saved my ass a couple of times, when I've left my phone at the office, which is over a hundred miles away)
posted by wierdo at 10:24 PM on August 13, 2011
It really would be nice to keep two notionally nationwide SIM-card-using carriers in the US. Verizon has committed to not using USIMs in their LTE phones, as I understand it. Having to call my provider and pay a fee to switch phones really irks me. At least in Verizon's case the switch can be done on the website for free, but that only works if you have web access, which may not be the case if you're switching because you already dropped your smartphone in the lake.
(I have both spare phones and spare unactivated SIMs around for just such an occasion. Saved my ass a couple of times, when I've left my phone at the office, which is over a hundred miles away)
posted by wierdo at 10:24 PM on August 13, 2011
> a.t.&t. has more union employees than any other company in the USA.
but how does that break down across service/division? Verizon and Verizon Wireless are separate companies, the first union & the second not, for "competitiveness" reasons.
posted by morganw at 12:32 AM on August 14, 2011
but how does that break down across service/division? Verizon and Verizon Wireless are separate companies, the first union & the second not, for "competitiveness" reasons.
posted by morganw at 12:32 AM on August 14, 2011
AT&T Mobility is a union shop, as was Cingular. I'm not sure if AT&T Wireless was or was not unionized before Cingular bought it.
posted by wierdo at 9:02 AM on August 14, 2011
posted by wierdo at 9:02 AM on August 14, 2011
Isn't it that the tech folks are union, but the sales folks in the malls stores are not?
posted by smackfu at 8:10 AM on August 15, 2011
posted by smackfu at 8:10 AM on August 15, 2011
Certainly the folks working for the third party resellers aren't. I'm not sure if store salespeople are CWA members or not.
posted by wierdo at 9:45 AM on August 15, 2011
posted by wierdo at 9:45 AM on August 15, 2011
Hmm..actually, this BGR article makes it pretty clear that many salespeople are also union members. Call center employees also appear to be unionized in some locations, which surprises me.
I guess union workers aren't such a big problem, after all.
posted by wierdo at 9:53 AM on August 15, 2011
I guess union workers aren't such a big problem, after all.
posted by wierdo at 9:53 AM on August 15, 2011
Union workers are only a big problem when they place their well-being ahead of the health of the organization as a whole. Just like how corporations aren't a big problem in general, only when they place the well-being of the workers below their profit margin.
It's finding that sweet middle ground in which both workers and the corporation thrive which is important for both parties. Sadly, either party can forget this is paramount, and once the balance tips in either direction, the entire endeavor falls apart.
posted by hippybear at 9:18 PM on August 15, 2011
It's finding that sweet middle ground in which both workers and the corporation thrive which is important for both parties. Sadly, either party can forget this is paramount, and once the balance tips in either direction, the entire endeavor falls apart.
posted by hippybear at 9:18 PM on August 15, 2011
hippybear wrote: Union workers are only a big problem when they place their well-being ahead of the health of the organization as a whole. Just like how corporations aren't a big problem in general, only when they place the well-being of the workers below their profit margin.
If you listen to the screaming from the yokels on the right, you'll hear that unions are inherently wrong, as they limit the free use of capital.
posted by wierdo at 5:50 AM on August 16, 2011
If you listen to the screaming from the yokels on the right, you'll hear that unions are inherently wrong, as they limit the free use of capital.
posted by wierdo at 5:50 AM on August 16, 2011
If you listen to the screaming from the yokels on the right
But I pay attention to reality, not screaming yokels.
posted by hippybear at 4:01 PM on August 16, 2011
But I pay attention to reality, not screaming yokels.
posted by hippybear at 4:01 PM on August 16, 2011
hippybear wrote: But I pay attention to reality, not screaming yokels
Very noble. Unfortunately, ignoring the screaming yokels just leads to them building up a critical mass, like the Tea Party.
posted by wierdo at 7:19 AM on August 17, 2011
Very noble. Unfortunately, ignoring the screaming yokels just leads to them building up a critical mass, like the Tea Party.
posted by wierdo at 7:19 AM on August 17, 2011
It's really not noble to base one's approach on reality. But I never said I "ignored" the screaming yokels. I said I don't pay attention to them. People can blather all the bullshit and nonsense they want, but it has no bearing on reality.
Where we've gotten in trouble is that we've lost the ability to clearly and concisely tell the bullshitters and nonsense-blathers that what they are saying is detached from reality, and how and why. Unfortunately, we also have a strong anti-intellectual, book-larning-is-wrong sentiment in this country, and explaining reality to people who have beliefs grounded in bullshit requires that people actually have to listen to a line of reasoning which reminds them of being in school.
I know I'm fighting a losing battle, and generally only hope that my body gives out before we're truly a country run by unschooled screaming yokels who have elevated ignorance and superstition above actual thought. It's a fight I can't fight on my own, and nobody else seems to be willing to tell people that thinking clearly about complex subjects is worthwhile, so I hope I die before they all take over.
posted by hippybear at 4:57 PM on August 17, 2011
Where we've gotten in trouble is that we've lost the ability to clearly and concisely tell the bullshitters and nonsense-blathers that what they are saying is detached from reality, and how and why. Unfortunately, we also have a strong anti-intellectual, book-larning-is-wrong sentiment in this country, and explaining reality to people who have beliefs grounded in bullshit requires that people actually have to listen to a line of reasoning which reminds them of being in school.
I know I'm fighting a losing battle, and generally only hope that my body gives out before we're truly a country run by unschooled screaming yokels who have elevated ignorance and superstition above actual thought. It's a fight I can't fight on my own, and nobody else seems to be willing to tell people that thinking clearly about complex subjects is worthwhile, so I hope I die before they all take over.
posted by hippybear at 4:57 PM on August 17, 2011
US Justice Department Files Complaint to Block AT&T, T-Mobile Merger.
There's some hope yet.
posted by weston at 11:08 AM on August 31, 2011 [1 favorite]
There's some hope yet.
posted by weston at 11:08 AM on August 31, 2011 [1 favorite]
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posted by The Devil Tesla at 10:48 AM on August 13, 2011