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Consumer Affairs

New York to Probe AT&T/T-Mobile Deal

Acquisition would create a “duopoly” that would dominate the airwaves

03/29/2011 | By | ConsumerAffairs.com | Cell Phones & Smart Phones

photoNew York Attorney General Eric Schneiderman says he is launching a full-scale review of AT&T’s proposed acquisition of T-Mobile. The proposed merger would create the nation’s largest wireless company with a total of 130 million subscribers nationwide, opening the door to a near-duopoly shared by the merged firm and Verizon Wireless. 

"Cell phones are no longer a luxury for a few among us, but a basic necessity. The last thing New Yorkers need during these difficult economic times is to see cell phone prices rise," said Schneiderman. "Affordable wireless service and technology, including smart phones and next generation handheld devices, are the bridge to the digital broadband future. We want to ensure all New Yorkers benefit from these important innovations that improve lives.

T-Mobile, a subsidiary of Deutsche Telekom, is a provider of choice for millions of New Yorkers and currently has 34 million customers nationwide, making it the fourth-largest wireless company in the country.

Consumer advocates have expressed fears that the proposed merger would start a process of consolidation that would lead to two firms – AT&T and Verizon – controlling nearly 80% of wireless subscribers nationwide and dominating the U.S. wireless business. Many observers think that third-place Sprint, already struggling with high subscriber turnover, would be unlikely to survive in an AT&T/Verizon-dominated world.

Schneiderman said he will closely scrutinize AT&T's argument that the merger has the potential to produce some benefits, such as expanding the coverage of AT&T's next generation broadband wireless network to rural areas in upstate New York that are underserved and have poor wired broadband connectivity.

Supporters argue that the merger might improve broadband service for T-Mobile customers by fulfilling some of their spectrum needs through access to AT&T's advanced network. The Attorney General’s review will weigh the benefits to New Yorkers against the anti-competitive risks posed to them, Schneiderman said.

 

 

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