The body blows between AT&T and the business and federal regulatory communities continue to mount. In July, the law firm of Bursor & Fisher established a website for AT&T customers to sign into a class-action lawsuit to fight the merger. Last week, AT&T launched a countersuit against the firm, stating that outside arbitration has no role to play in the proposed buy-up of T-Mobile.
Whatever the legal/contractual granules of the case, the lawsuit is clear evidence that fears and/or anger are growing over AT&T’s plans for T-Mobile (plans that mostly seem to be about suppressing T-Mobile as a competitor). The business community, within which companies are bought/merged/broken up on a fairly regular basis, is starting to show some worry as well.
Information Week has drawn reports from a number of smaller and mid-sized business leaders about their unease about the merger to create a Top 5 List of fears. Not surprisingly, a forced reduction in competition tops the list, as AT&T will have still less incentive to compete either to improve technologies or to hold down prices.
More pertinent to businesses and nonprofits than to individuals: organizations tend to buy multi-phone packages for their staffs that lock into specific carriers. AT&T and Verizon (without T-Mobile) will have over 80% of the cell-network market and could easily fix prices and contracts to each other’s benefit without outside competition.
Rattled nerves are also coming to those who provide the towers, satellites, and software infrastructure – the ‘backhaul industry’ – that make cell phones possible are worried that if the service-provider economy is reduced to two big players, they would suffer. Companies in the backhaul industry would have to land one of two big fish to have any chance at survival.
And who is to say the two big fish won’t meet to pick their winners and losers in that industry before any ‘open’ contract bidding would begin?
AT&T’s response to mounting pressure in DC against the merger, according to TheHill.com, is for companies to return the battle to the marketplace:
Rather than urging government to take that choice out of the hands of consumers, Sprint and CellSouth should get back to competing in the market. If they offer better service, or more attractive prices, they have the same chance to succeed. And in the end, consumers will decide which wireless provider they prefer.
True that. Of course, AT&T is willing pony-up $38 billion to ensure customers have one fewer choices in that so-called marketplace. In the marketplace of ideas, a growing number of consumers are deciding against AT&T.
