Meet the AT&T, T-Mobile merger opposition

Meet the AT&T, T-Mobile merger opposition

Yesterday’s U.S. Judiciary Subcommittee hearing about the merger between T-Mobile and AT&T provided arguments on both sides of the fence. We’ve covered the topic of spectrum usage recently as argued by those in favor of the merger, and those who are opposed. Today we’re going to focus on what the opposition had to say. The opponents against the merger included Sprint CEO Dan Hesse, Cellular South CEO Victor H. Meena and Public Knowledge president Gigi Sohn.

Dan Hesse

Dan Hesse’s main issue with the merger is about competition. Hesse said that “Sprint was born of competition” and the combined strength of AT&T and T-Mobile would create a duopoly of the cellular market in the United States. Hesse referred to a super-powered AT&T and Verizon as the “Twin Bells.” He argued that phone manufacturers could be discouraged from working with anyone other than AT&T and Verizon.
Phone manufacturers won’t be considered evil for doing this. The people that control those companies have to make money. They want their products to reach as many relevant customers as possible. Despite what AT&T’s CEO Randall Stephenson thinks, customers will flock to a carrier that possesses a device that everyone wants. Hesse also said that the new operating systems created for devices will be built with the Twin Bells in mind.
“AT&T’s acquisition of T-Mobile will turn back the clock on wireless competition,” Hesse said.
Hesse later said that Sprint wouldn’t necessarily be unable to compete in a market that consists of a duopoly, but it will make it very difficult. When asked, Hesse said it is possible that Sprint will be forced to sell out to Verizon or AT&T after the merger.

Gigi Sohn

Sohn started her testimony by referring to a petition created by Public Knowledge. She said that over 1,000 people signed the petition in opposition to the merger. The effects from the merger in her opinion could be devastating to employees. She insists that thousands of jobs will become redundant in the wake of the merger. She also said that GSM services will be monopolized in the United States. This would give GSM device manufacturers no choice but to attempt to negotiate with just one company. Sohn also said application markers would suffer due to lack of competition.
“ATT has a history of blocking innovating applications,” Sohn said.
AT&T traditionally blocked Android apps that weren’t native to the Android Market. The company is loosening its reins by allowing Amazon Appstore applications to be installed on its phones.
Sohn also accused AT&T of inefficiency because it operates three different networks.

Victor H. Meena

Meena did not mince words. In regards to the merger he said, “We [Celluar South] can find nothing good about it.” If the Twin Bells were to exist, Meena said the only thing smaller cellular providers can do is wait their turn to be devoured. Sprint would become a takeover target and would likely be purchased by Verizon. As Meena put it “There is no third option.” Either the market will enter a duopoly, or the merger can be denied which can potentially usher in a new era of competitiveness in the wireless industry.