Facebook Weighs In Behind AT&T

Most consumer organizations are solidly againstAT&T'sproposed $39 billion takeover ofT-Mobile, citing the usual arguments about fewer players, less competition and so forth and a surprising number of news outlets have parroted the argument that T-Mobile is a low-cost provider.

But several high-tech companies that are heavily invested in wireless communications have come out in support of AT&T. Facebook has became the latest, joining Microsoft, Yahoo, Blackberry manufacturer Research In Motion and a number of Silicon Valley venture-capital firms.

Why? In a filing with theFederal Communications Commission(FCC), the firms say they buy AT&T's argument that the deal will strengthen its network and make wireless broadband available to more of the nation.

"The challenge of keeping pace with consumer demand and continuing to lead globally in wireless broadband services and products requires that we tackle the issue on multiple fronts," the companies said in their filing. (Google and Apple are staying mum, at least for the moment).

Consumer friendly?

T-Mobile, owned byDeutsche Telekom, is often portrayed by those who oppose the deal as a consumer-friendly, low-cost player that gives customers a fairer break than AT&T and its fellow behemoth, Verizon Wireless.

Perhaps, but judging from the nearly 2,000 complaints filed about T-Mobile with ConsumerAffairs.com in recent years, its customers encounter the same glitches, dropped calls and billing disputes as customers of the bigger carriers while making do with a network that exists mostly in major population centers.

"I was on a Family Plan for over 10 years with T-Mobile. ... I had poor reception throughout the years and was told that they were erecting more towers in the area and that would solve the 'no service' problem," said Lisa of Langhorne, Pa."We got the Android Mytouch 3G phones because we were told that we would have better reception and less dropped calls. That did not happen in fact the phones had poor reception and more dropped calls especially after an upgrade to their system in the winter of 2010. In fact our phones went dead and all information was lost."

Nor did T-Mobile do anything for Phoenix, who lives in a low-income section of Boston.

"On 11/15/10 I moved from one location in Jamaica Plain, MA to another about 1.5 miles away in the same city. I had been a T-Mobile customer for over 5 years without coverage issues at my former location. However, I immediately discovered I had low/no coverage at my new location," she told ConsumerAffairs.com. "I called T-Mobile customer service to complain and was told a tech would investigate.

"Two weeks later, I was told a service tech visited the neighborhood and reported that I live in a low coverage area, but T-Mobile has no plans to improve coverage and I would be held responsible for the early termination fees if I closed the account," she said.

Rural non-service

T-Mobile customers hoping to make calls in rural areas must hope that T-Mobile has negotiated a favorable deal with another carrier to provide "roaming" service, whereas AT&T and Verizon Wireless both provide service on their own network in most of the country. No. 3 carrierSprintis somewhere in between.

It's worth noting that no law prevents T-Mobile from building out its network nationwide, just as nothing prevents it from developing and deploying a robust 4g network that truly matches the speeds attained by AT&T, Verizon and Sprint.

The only thing stopping either of these things from happening is that T-Mobile's German masters choose not to spend the money to make them happen. Instead, the parent company is investing heavily in the European markets where it is a much stronger player than in the U.S.

T-Mobile has been steadily losing customers in the U.S. It lost 99,000 in the first quarter of 2011, more than triple the number it lost in the fourth quarter of 2010.

T-Mobile USA CEO Rene Obermann has told regulators and Congress that his company lacks the spectrum space to deploy a true 4g network and has said that Deutsche Telekom is unable to cough up the financial assets available to acquire more spectrum, even if it was available.

Running out the clock

Instead, T-Mobile continues to hold its U.S. customers to rigid contract terms, milking them for monthly fees while basically running out the clock on its American venture.

This is perhaps why AT&T's bid also wins the support of many rural interests, labor unions and the governors of several thinly-populated states.

Vast sections of the country, after all, are without broadband service of any kind – no cable, no FiOS or Uverse and no wireless broadband. This is a blow to the economic, educational and cultural hopes of these areas and a particularly cruel one given all the advantages that were promised rural areas back in the days when the "Information Superhighway" was being rapturously promoted.

Oh it was built, all right. But like a real superhighway, there's no off-ramp to the small towns, farms and ranches that dot flyover country.

Nevertheless, antitrust law being what it is, it's likely the deal will be held up or, at the very least, AT&T will be forced to dismantle some or all of its business to satisfy the regulators and litigators who for much of the history of telecommunications have had more power than the lowly consumer.

Knowledgeable consumer advocates are hoping for at least a partial return to the days when telecommunications firms had to commit to provide service to their entire service area, not just the parts of it that were most profitable.

If AT&T is willing to commit to that, consumers might actually be the winners.