AT&T T-Mobile Merger Far From Done Deal

If you’re a customer of either AT&T or T-Mobile and wondering how the announced merger of the two wireless carriers will affect you, hold on a minute. This deal could easily come unraveled in Washington.

Late last week the Wall Street Journal raised the issue that a lot of people may have been thinking. How is the Federal Communications Commission (FCC) going to view a deal that reduces the number of wireless carriers in the U.S. while creating, by far, the nation’s largest mobile company?

It may view it with skepticism. The Journal quotes an FCC officials as saying the agency would not “just rubber stamp” the deal and that AT&T would “have a steep climb, to say the least.”

Anti-trust issues

A few blocks away from the FCC, lawyers at the U.S. Justice Department may have something to say about the proposed merger as well. In deals such as this, the Justice Department looks at ant-trust issues, to make sure the merger will not hurt competition. In markets where AT&T and T-Mobile are significant competitors, this could prove problematic.

If the deal is approved, 90 percent of the wireless business would be concentrated among just three companies – AT&T, Verizon and Sprint/Nextel. Of that, AT&T would have 43 percent of the business.

Will it be enough to derail the deal? Possibly, but AT&T is known in Washington for its lobbying power. The company says current customers of both companies will benefit from the union, because of expanded network coverage and additional spectrum.

Higher prices?

Critics of the deal, however, are likely to claim that the deal will result in higher prices for everyone. When the number of companies providing a service shrinks, costs to consumers almost always go up.

Another potential change for T-Mobile customers is the almost certain end to their unlimited data plan. T-Mobile currently has one, AT&T has moved to a tiered plan.

Lastly, there could be a consumer revolt among current T-Mobile customers. The blog eWeek reported over the weekend that anger and frustration is growing among some consumers. There is even an online site devoted to stopping the merger, where consumers can sign a petition against it.