Say no to AT&T’s mobile monopoly

[Commentary] AT&T's purchase of T-Mobile should be blocked by US regulators and the Department of Justice.

Unless they are stopped, Verizon and AT&T are on their way to replicating in mobile the power they exert in fixed-line telephony and broadband – lack of competition means most consumers can only choose between one phone company and one cable company. In spite of the clear antitrust problem – AT&T already has 96 million subscribers and, with Verizon, controls 80 percent of the industry’s earnings before interest and depreciation – it is sure enough that it will clear regulatory hurdles to agree to a $3 billion break-up fee if it fails. The deal, it appears to believe, is as good as done.

The first irony of this is that AT&T is one of the symbols of the past determination of regulators not to be dissuaded by big business from imposing antitrust law. The original AT&T phone system – founded by Alexander Graham Bell – was broken up by the DoJ in 1982 into “Ma Bell” and the “Baby Bells”. Now the DoJ may stand aside as AT&T turns itself into Ma Mobile.

The second irony is that AT&T announced its bid as Ofcom, the UK telecoms regulator, unveiled a design this week for a spectrum auction that diminishes the potential pay-out to the UK Treasury in order to ensure that at least four mobile phone companies will operate fourth-generation (4G) networks. It feared going down the path that AT&T is forcing the US along.

The third is that the US confusion of standards – with a split between CDMA and GSM third-generation technology – is likely to be ended by operators moving to a unified 4G standard, known as LTE. That would not only cut costs but make it easier for consumers to switch among networks, and harder for their providers to trap them.

The US already performs badly in fixed-line broadband services in terms of price and speed compared with other countries, hurt by Verizon and AT&T having shrugged off the imposition of competition. The last thing the US now needs is AT&T, which already has mobile operating margins of more than 40 per cent, pulling that trick again. Come on, DoJ. Just say no.