ATT/T-Mobile Merger: What Does It Mean For You?

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By Admin on March 21, 2011 1:07 PM

The internet is abuzz with talk of the AT&T/T-Mobile merger--and with good reason.

AT&T has agreed to purchase the German carrier's U.S. operations for $39 billion. If approved, AT&T would control 42% of the U.S. cellular market, followed by Verizon at 31%. The remaining portions of the market are controlled by dozens of small carriers.

What exactly does this impending AT&T-Verizon duopoly mean for consumers?

To start, the AT&T/T-Mobile merger is not going to remain as is, without any government oversight. The companies must go through a pre-merger notification process with the Department of Justice's Antitrust Section, as well as garner approval from the Federal Communications Commission.

Admittedly, this process will not be easy. There will be a lot of argument about how to analyze the wireless market for competition purposes, and everyone will want a say. Including consumer groups and other competitors.

This, however, is a good thing for consumers.

The economic analysis that the agencies conduct includes consideration of prices, service and products. The DOJ and FCC will be looking closely at small carriers, what a duopoly will mean for prices, and how the merger impacts universal broadband and the spread of 4G technology.

There's no doubt that the AT&T/T-Mobile merger will be approved. But, it will be approved with pro-consumer caveats.

Conditions that can be placed on AT&T are numerous. In these situations, they often involve preservation of low-cost plans and an agreement to provide certain services or build out infrastructure. The FCC and President have been focusing on national broadband, which will likely be part of the deal.

There's no telling whether your actual cellular service will improve, but if the government does its job, your costs shouldn't really increase, and you should end up with more options from the two main carriers. But keep in mind that Verizon also has to play along, and there's no telling what the company will do.

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