Here's a test for Obama's FCC and Justice Departments

[d-ray657]

This is the type of situation I thought the Anti-trust laws were made for. AT&T has reached an agreement to buy T-Mobile. (http://www.washingtonpost.com/business/economy/atandt-agrees-to-buy-t-mobile-usa/2011/03/20/ABt59R3_story.html) This will create a significant amount of economic/market power in one carrier, and will significantly reduce competition. If this is not anti-competitive activity, the anti-trust laws need to be re-written.

Regards,

D-Ray

[finnbow]

It certainly deserves scrutiny. However, in these parts, Verizon is still the carrier of choice in terms of network coverage and reliability.

[d-ray657]

You would agree, though, wouldn't you, that an action removing a significant competitor in the market is not a good thing for consumers?

Regards,

D-Ray

[finnbow]

I suppose so. Until I saw the graphic in your link, I had no idea that T-Mobile had that size of a customer base.

[JonL]

I'm surprised T-Mobile had that many subscribers, and I'm also surprised that AT&T has more (not by many) than Verizon. Around here people who have AT&T seem to complain a lot, and people who have Verizon seem to be reasonably content. I've been with Verizon since about forever (around 1994), and I've got no complaints except for the cost. I think all the carriers are priced similarly though, and the Verizon customer service has truly been exemplary from day one.

[BlueStreak]

I'm surprised T-Mobile had that many subscribers, and I'm also surprised that AT&T has more (not by many) than Verizon. Around here people who have AT&T seem to complain a lot, and people who have Verizon seem to be reasonably content. I've been with Verizon since about forever (around 1994), and I've got no complaints except for the cost. I think all the carriers are priced similarly though, and the Verizon customer service has truly been exemplary from day one.

I have AT&T. I hate them. As soon as my contract is up, I'm going elsewhere.

Dave

[merrylander]

To bad Verizon could not do as well by their land line subscribers, but I still think Judge Greene was an idiot.

[noonereal]

It certainly deserves scrutiny. However, in these parts, Verizon is still the carrier of choice in terms of network coverage and reliability.

indeed, verizon is the gold standard that one is compelled to use you travel for business

there is no real competition in the cellular markets now

[DarkDefender]

Going from 4 national carriers to 3 can't possibly be advantageous for the consumer in terms of pricing in the future. If people complain about AT&T coverage so much, why wouldn't AT&T put some of that $39 BILLION towards improving its wireless infrastructure rather than scooping up a rather small, albeit the fourth largest, competitor.
It's as though the break up of AT&T that happened 27 years ago is in the process of morphing back into a single massive telecommunications company.

As far as cell phone service goes, when is the US going to accept what is basically the world standard with GSM phones? I'm still baffled how this hasn't caught on.

[d-ray657]

In addition to my concern for consumers - and workers - in general with more and more concentration of economic power, I have a small personal stake. We have had the same contract rate with T-Mobile for 6 or 7 years. It is a really good deal, with unlimited family texting for 10 bucks a month and plenty of hours for my family's needs. We have also gotten used to free calls to any T-Mobile user. I hate to think what the increase would be if AT&T is allowed to take over.

Regards,

D-Ray

[whell]

In addition to my concern for consumers - and workers - in general with more and more concentration of economic power, I have a small personal stake. We have had the same contract rate with T-Mobile for 6 or 7 years. It is a really good deal, with unlimited family texting for 10 bucks a month and plenty of hours for my family's needs. We have also gotten used to free calls to any T-Mobile user. I hate to think what the increase would be if AT&T is allowed to take over.

Regards,

D-Ray

My $0.02 is that cell phones are becoming a market where the growth opportunities are limited. Market penetration for cell phones is already high. So, continued growth / profitability may depend on delivery of new / differentiated services, network speed and delivering content via handheld devices.

You're also starting to see the proliferation of discounted rate service providers delivering basic phone service and texting for a flat monthly fee. This will further erode the opportunity for growth of new cell phone service from the larger carriers.

It would seem then that the big guys will become more about delivering content and network capacity than basic cell service. It would make some sense to expand network capacity - in this case via acquisition - then focus on content and premium services and lease network capacity to the discount providers.

If even some of the above is ATT's business case for acquiring T-Mobile, then market dominance plays a small role, if any, in the acquisition.

[d-ray657]

My $0.02 is that cell phones are becoming a market where the growth opportunities are limited. Market penetration for cell phones is already high. So, continued growth / profitability may depend on delivery of new / differentiated services, network speed and delivering content via handheld devices.

You're also starting to see the proliferation of discounted rate service providers delivering basic phone service and texting for a flat monthly fee. This will further erode the opportunity for growth of new cell phone service from the larger carriers.

It would seem then that the big guys will become more about delivering content and network capacity than basic cell service. It would make some sense to expand network capacity - in this case via acquisition - then focus on content and premium services and lease network capacity to the discount providers.

If even some of the above is ATT's business case for acquiring T-Mobile, then market dominance plays a small role, if any, in the acquisition.

But wouldn't T-Mobile be providing content and premium services as well? I know that T-Mobile's customer service is top notch. To the extent that T-Mobile has developed a loyal customer base, wouldn't that provide T-Mobile with a competitive advantage over a significant portion of the potential customer base for the premium services? Wouldn't having a smaller group of national companies who would be able to provide national coverage create higer prices for the discount companies who, under your theory, would lease network access?

In any event, when the Sherman Act is properly applied, it does not require intent to monopolize for some aspects of its coverage. At a certain point creating greater market share through the acquisition of competitors is inherently anti-competitive. I can't imagine a scenario where this further consolidation of the communications industry is anything but another bite out of the consumers' a**.

Capital has become more and more concentrated over the past several years. No doubt, that is one of the factors contributing to the widening wealth gap. Not only does the market power assist the larger companies in establishing their pricing structure, it also assists them as a buyer - whether of other goods and services or of labor.

Regards,

D-Ray

[whell]

I think the cell phone biz in Europe is still a growth biz. Deutch Telecom now gets to focus on it's home turf while making a good return on it's initial investment in T-Mobile. ATT gets expanded capacity on a 4G network, expanded 4G coverage, an expanded customer base and revenue stream. It also can leverage those resources to compete for content and more favorable terms for equipment to deliver content.

All that said, there's still opportunity for smaller providers to offer discounted services and rate plans. There are still plenty of dinosaurs like me who couldn't be bothered watching TV or video content on my phone, or surfing the web on it. I just want a phone to be a phone.

[d-ray657]

It also can leverage those resources to compete for content and more favorable terms for equipment to deliver content.



Utilizing acquired competitor's resources for a competitive advantage - doesn't that sound like the exercise of monopoly power?:confused: Yeah, it's a great business deal for AT&T - it gives it market power.

Like you, I'm not all that interested in the entertainment aspects of a cell phone, although I would like to have mobile access to Google and other research tools. A data plan is not in the budget right now, though.

Regards,

D-Ray

[whell]

Utilizing acquired competitor's resources for a competitive advantage - doesn't that sound like the exercise of monopoly power?:confused: Yeah, it's a great business deal for AT&T - it gives it market power.

Like you, I'm not all that interested in the entertainment aspects of a cell phone, although I would like to have mobile access to Google and other research tools. A data plan is not in the budget right now, though.

Regards,

D-Ray

Not really. Its no worse than Walmart or Home Depot using volume to obtain more favorable terms than competitors. Or a large company gaining more favorable term from suppliers than a smaller competitor based on volume purchasing.

It also doesnt deserve any more or less scrutiny than Sprint's purchase of Nextel a couple of years ago, IMHO.

[d-ray657]

Not really. Its no worse than Walmart or Home Depot using volume to obtain more favorable terms than competitors. Or a large company gaining more favorable term from suppliers than a smaller competitor based on volume purchasing.

It also doesnt deserve any more or less scrutiny than Sprint's purchase of Nextel a couple of years ago, IMHO.

Sprint's deal should have received more scrutiny than it did - and this is coming from Sprint's hometown.

It is a little weak to refer to Walmart to prove that a practice is not anti-competitive. Sam was retail's version of the industrial robber barons. He would use all sorts of arm twisting and market power to get the cheapest price on everything. If he couldn't get the price he wanted, he would remove all of a particular product from his stores. He would also destroy the small local entrepreneurs when he moved into a small town, using his purchasing power to undercut the local until the local was gone. Then his prices went up. Don't get me started in Walmart's employment practices. Walmart is about as far from the model of a good corporate citizen as you could find.

Regards,

D-Ray

[merrylander]

I suspect part of the plan is the battle between the cellphone makers and the network providers. For years the network people wanted a smart network with dumb terminals. The cellphone makes see it from the opposite viewpoint. I doubt that AT&T and Verizon want to simply be providers of raw bandwidth.

[bhunter]

I suspect part of the plan is the battle between the cellphone makers and the network providers. For years the network people wanted a smart network with dumb terminals. The cellphone makes see it from the opposite viewpoint. I doubt that AT&T and Verizon want to simply be providers of raw bandwidth.

We also need to consider the cable networks and their interests in the mix. Every player wants to offer content and not just bandwidth...an advertising window into their customer's life. And yes, the baby Bells have been on the road to consolidation for several decades. Here in San Diego, ATT is regularly soliciting me for my Directv account. I'd like to know how much bandwidth is used today and the cost of installing that bandwidth. This must also include the cost of right of way and damage/repairs to infrastructure damaged by the installation of the bandwidth.

[whell]

It is a little weak to refer to Walmart to prove that a practice is not anti-competitive. Sam was retail's version of the industrial robber barons.

OK, fine, then pick your poison. GE, GM, Ford, IBM, Kellogg, Pfizer, Proctor and Gamble....


We also need to consider the cable networks and their interests in the mix. Every player wants to offer content and not just bandwidth...an advertising window into their customer's life. And yes, the baby Bells have been on the road to consolidation for several decades. Here in San Diego, ATT is regularly soliciting me for my Directv account. I'd like to know how much bandwidth is used today and the cost of installing that bandwidth. This must also include the cost of right of way and damage/repairs to infrastructure damaged by the installation of the bandwidth.

ATT nearly killed themselves in the late 90's and early 2000's trying to become a cable company. The business case was that terrestrial phone service was a dying business, DSL would never achieve the speed of cable or wireless, so they spent huge sums of money to buy their way into the cable business. They bought up cable companies like MediaOne, hung a king's ransom in fiber optic, then was forced to sell it off at fire sale prices when the dot com bubble burst, and nearly went broke in the process. Comcast became one of the primary beneficiary of ATT's folly, picking up a number of ATT's former cable markets. But, ATT wasn't aiming to be a cable provider. They realized then that content was king, and they wanted to be able to deliver content to consumers.

Fast forward to 2011. Devices can grab content wirelessly at ever increasing speeds. Cellular networks are one source of content delivery. But so it satellite. So are the ever increasing number of "hot spots". And there are other methods of content delivery on the drawing board. Hell, I'm not sure kids today know how to use their cell phones to place an actual call. Its all about texting, and text messaging takes far less bandwidth to deliver a message versus an actual cell call.

I'm not worried about consolidation in the cellular marketplace. It had to happen at some point, and I doubt this will be the last we hear of it. Cellular service providers will face competition from ever increasing content delivery providers, as well as changes in consumer behavior.

And one more thing, to put a twist on this. As cell phones become ubiquitous, should we be concerned about protecting watch makers from the cell phone industry? You hardly see kids wearing watches anymore. If they want to know the time, they pull out their cell phone. An unintended consequence of the proliferation of cell phones to be sure, but the cell phone has changed consumer behavior, and watch makers have taken a bit of a financial hit from it.

[d-ray657]

Do you worry about consolidation in any marketplace? Isn't there a point in which the essence of the free market - competition - has been eliminated?

As far as the alternative poisons to competition, GM, IBM, etc., I would bet that each one of them has committed violations of the antitrust laws and gotten away with it. Corporate culture has become "It ain't illegal if you don't get caught."

Regards,

D-Ray

[whell]

Do you worry about consolidation in any marketplace? Isn't there a point in which the essence of the free market - competition - has been eliminated?

As far as the alternative poisons to competition, GM, IBM, etc., I would bet that each one of them has committed violations of the antitrust laws and gotten away with it. Corporate culture has become "It ain't illegal if you don't get caught."

Regards,

D-Ray

I don't know if I can state that I'm not concerned about it in "any" marketplace. I do believe that it is WAY more difficult to contemplate how a single individual or business can dominate an industry or marketplace today, versus 1890 when the Sherman Act was originally minted.

[noonereal]

I don't know if I can state that I'm not concerned about it in "any" marketplace. I do believe that it is WAY more difficult to contemplate how a single individual or business can dominate an industry or marketplace today, versus 1890 when the Sherman Act was originally minted.

as usual, i don't agree with your lack of concern :o

[merrylander]

Bandwidth on cable, whether Comcast or AT&T is relatively limitless. Bandwith on wireless is limited, there is only so much bandwidth between DC and green light. Why do you think the Funny Cookie Company took away all those TV channels.

[whell]

Bandwidth on cable, whether Comcast or AT&T is relatively limitless. Bandwith on wireless is limited, there is only so much bandwidth between DC and green light. Why do you think the Funny Cookie Company took away all those TV channels.

As I understand it, you need lots of bandwidth for voice communications. You need little bandwidth for data. So, to push content won't make that much of a dent in the capacity of a cellular network.

[whell]

as usual, i don't agree with your lack of concern :o

Go figure.

So, provide examples where you believe a particular business or individual can singularly squelch competition. Anti-trust laws are not meant to stifle competition, even cut-throat competition. They are meant to keep a business or an individual from impeding or destroying the ability to compete. Pretty hard to see how that could practically be accomplished in this day and age.

[noonereal]

Go figure.

So, provide examples where you believe a particular business or individual can singularly squelch competition. Anti-trust laws are not meant to stifle competition, even cut-throat competition. They are meant to keep a business or an individual from impeding or destroying the ability to compete. Pretty hard to see how that could practically be accomplished in this day and age.

we have many industries that are effectively a monopoly

banking insurance healthcare oil ...

you are a number and all the monopoly abuses are present in these industries even though they have competing companies

[whell]

we have many industries that are effectively a monopoly

banking insurance healthcare oil ...

you are a number and all the monopoly abuses are present in these industries even though they have competing companies

Well, you've just named 4 of the most heavily regulated industries there are. So, how can heavily regulated industries be monopolies?

An industry cannot, by definition, be a monopoly, unless the industry is controlled by a single individual or company. Besides being regulated, none of the above industries are controlled by a single entity (unless that entity is the US Government which regulates them, but states also regulate in most of the industries you mention). And, as you state above, there is competition among businesses in each industry, so how can there be a monopoly of competition exists?

[hillbilly]

In addition to my concern for consumers - and workers - in general with more and more concentration of economic power, I have a small personal stake. We have had the same contract rate with T-Mobile for 6 or 7 years. It is a really good deal, with unlimited family texting for 10 bucks a month and plenty of hours for my family's needs. We have also gotten used to free calls to any T-Mobile user. I hate to think what the increase would be if AT&T is allowed to take over.

Regards,

D-Ray


Sounds like our Verizon. Here, everyone we know only uses Verizon and it is great to talk all you want to with other Verizon users without using ANY minutes. We also pay the few bucks extra for unlimited texing because even if our kids keep track of texting, .. other kids will still send a blue million text a day to our kids phones even if our kids do not reply. Plus the texting plan is unlimited to any wireless user and is great if they want to text someone who isn't Verizon. If we didn't have this plan, it'd cost a fortune on the first bill and I'd take a sledge hammer to our phones.

Here's how I feel about our internet. I'm about ready to take a sledge hammer to this dsl box as we pay about 100.00 a month for the SLOWEST DSL money can buy ( here ). Takes 9-16 minutes to load a 3 minute low-quality music video ( lyrics version only because the video versions can take a half hour per song to load ). There are ''NO'' other choices for service in our area. Oh, our one and only internet provider does offer faster speeds .. but not for the price we are paying ( wich is FAR to much as it is ). I took my computer tower to my brother inlaws house two counties away where they have other options and this machine loaded the same video's just about instantly in the blink of an eye .. and loaded the higher quality ones within a few seconds. He pays half of what we are paying, except he has lightning fast internet speed thats more than twice the speed of the Very Best our local provider has to offer. Starting at about 100 a month ( after fine print charges and taxes ), we can only afford the very basic dsl thats really only barely faster than our dial-up was. Our speed is about 128kbps during the day and at times I get lucky after dark and speed will be 384kbps to 420 wich at very best times the speed is still less than half a mb. Two counties away my brother inlaw gets an avg of 12mb speeds during peak times for half of what we are paying. Only difference is now our kids can do homework online as before they had to take turns using dial-up. Teachers also hate it because they have to let their compters up-load ALL night on school nights in order for it to get into the system for the next day .. and there's times when the shool systems still haven't received it all when the teachers get to school and are ready to start classes. The speed is just to slow for the school network to operate well. It's nonsense. I remember when a guy came asking me to vote for him and I told him that I wasn't going to vote for him or anyone else that was asking to run the local company because everyone in charge were local yolkals and everyone running for position was a local yolkal that like money too and, I, like many other folks am tired of being dicked on internet.

[d-ray657]

A basic tale of life without competition. That's why I don't want to see the telecom companies swallowing the other ones - or the airlines, or the auto makers, or the banks and so on and so on. That's also how they get too big to fail.

Regards,

D-Ray

[bhunter]

Bandwidth on cable, whether Comcast or AT&T is relatively limitless. Bandwith on wireless is limited, there is only so much bandwidth between DC and green light. Why do you think the Funny Cookie Company took away all those TV channels.

We're talking two different definitions of bandwidth? You from the telecom analog side and me from the digital transfer side. I never liked the information theory definition of bandwidth, but I guess it goes back to Shannon's paper.

[whell]

A basic tale of life without competition. That's why I don't want to see the telecom companies swallowing the other ones - or the airlines, or the auto makers, or the banks and so on and so on. That's also how they get too big to fail.

Regards,

D-Ray

In most communities where cable services are provided, the lack of competition is supported by local government. Community governments contract with cable providers, and many communities, the above example included, have chosen to contract with a single provider. The local governments collect the "franchise fee" (you'll see it, or some similar reference, as a line item on your cable bill) from the cable company. Cable operators want long - term contracts with the communities they serve due to the initial and on-going investment in infrastructure to ramp up and maintain service in a community or market.

Of course, cable providers were actively seeking to hang more fiber optic and expand their network capabilities in the late '90's and early 2000's so that they could "spend their way in" to communities and compete. In our fair city, the city council around 2000 debated it and voted - somewhat surprisingly - to maintain a single provider. Then the dot com bubble burst, and thereafter cable providers were loath to spend the resources necessary to establish service in new markets.

[merrylander]

As I understand it, you need lots of bandwidth for voice communications. You need little bandwidth for data. So, to push content won't make that much of a dent in the capacity of a cellular network.

A single voice channel uses 64 kbit/s, 56kbit/s in NorAm thanks to the carrrier systems we developed. The biggest problem with voce transmission is delay, it is very delay intolerant resulting in echo if not properly handled.

Data on the other hand does not care much about delay, hence packet switching. However if you are looking at things like streaming of video and audio, delay is very important.

You will get very good quality voice over 56 or 64 kbit/s using PCM and excellent quality using ADPCM. Try running voice over the internet (VOIP) and you need at least double the bandwith and here echo cancelling is a fine art.

[merrylander]

The thing was that when telecom was only Mother Bell it was regulated, service was pretty darn good and MTTR was very good. Since deregulation service went to hell in a handcart, MTTR is measured in days not hours. Long distance rates dropped, but local service rates went through the roof.

We now have folks like Vonage and Skype who are pretty much taking a free ride over the Internet, but you need broadband to make either one function, so they really are not cheaper after all.

[whell]

The thing was that when telecom was only Mother Bell it was regulated, service was pretty darn good and MTTR was very good. Since deregulation service went to hell in a handcart, MTTR is measured in days not hours. Long distance rates dropped, but local service rates went through the roof.

We now have folks like Vonage and Skype who are pretty much taking a free ride over the Internet, but you need broadband to make either one function, so they really are not cheaper after all.

Rates for stand - alone phone service went up. However, most folks package services from their provider now, and rates for packages are actually much more favorable. I can get home phone (including local, local toll and long distance), braodband internet and video via either ATT U-Verse or the local cable provider for about $100/month (I don't have cable/video service, so my actual cost is less). I was paying more than that for phone and DSL not more than 8 months ago.

[noonereal]

Rates for stand - alone phone service went up. However, most folks package services from their provider now, and rates for packages are actually much more favorable. I can get home phone (including local, local toll and long distance), braodband internet and video via either ATT U-Verse or the local cable provider for about $100/month (I don't have cable/video service, so my actual cost is less). I was paying more than that for phone and DSL not more than 8 months ago.

it bundled in a way to compel me to retain a service i do not need

it's not favorable at all

it's strong arming through pricing

[d-ray657]

it bundled in a way to compel me to retain a service i do not need

it's not favorable at all

it's strong arming through pricing

That's what's called a tying arrangement. Illegal under the anti-trust laws if anyone would bother enforcing them.

Regards,

D-Ray

[whell]

That's what's called a tying arrangement. Illegal under the anti-trust laws if anyone would bother enforcing them.

Regards,

D-Ray

What's illegal about it, if I make the choice? If agree to a one year term of service in exchange for a service at a specified rate, and I have a choice of providers that offer the same or similar services, I'm not seeing the illegality of that. I'm also not seeing anything anti-competitive about it. What am I missing?