Ready for AT&T-Mobile?—
San Francisco residents and those around the country who use AT&T or T-mobile for their wireless carrier needs may suddenly wake up one day and find the two have merged in a gigantic conglomerate which will essentially own 80% of all cell-phone contracts in the nation.
Not according to Senate’s Antitrust Subcommittee chairman, Sen. Herb Kohl (D-Wis.). He feels that a merger between AT&T and T-mobile would hurt the public and relayed these sentiments to the Federal Trade Commission (FTC) by stating:
“…this acquisition … would likely cause substantial harm to competition and consumers, would be contrary to antitrust law … [and] should be blocked by your agencies.”
Of those who are actually in favor of the planned merger, the oddest support comes from the Communications Workers of America union.
This group believes that the merger would create more jobs. But history shows that when companies merge, jobs are inevitably cut due to overlapping positions or downsizing to make the new venture more streamlined and cost effective.
Can the Senate really do anything?
While all the tough talk from Sen. Kohl sounds good, that’s about all that can be said about it–the Antitrust Subcommittee lacks the authority to block the merger but can help influence other government agencies that do have the clout to stop it.
Bigger is not always better
While a merger benefits investors in these two companies, the long-term consequences for consumers are not as clear. Will the merger mean a virtual monopoly, and if so, how will this affect the industry?
Of course, Americans always root for the underdog, so Verizon and Sprint may suddenly see increases in their businesses if the merger becomes a reality.
But right now it’s all speculation.