by Mark Ciavola
Today, the U.S. Department of Justice filed an anti-trust suit to block AT&T’s impending merger with T-Mobile. There are many opinions from many people clogging up Facebook and Twitter feeds, but so many of these people don’t fully understand the issue or the facts involved in this case.
Having worked for AT&T Wireless in 2001, and having survived two mergers – one when Cingular (SBC) bought AT&T Wireless, and a second when SBC bought AT&T – I understand this issue all too well. So I thought I’d shed some light on the issue from the perspective of the companies, the employees, and the consumer.
The most important thing to be aware of here is T-Mobile’s current condition. The 4th largest wireless company in the U.S., T-Mobile has been forced over the years to keep their prices low in order to compete with larger companies like Verizon and AT&T. Furthermore, they have had to accept customers that Verizon and AT&T turn away because of credit requirements, leaving them with far more customers who don’t pay their bills. Fiscally, T-Mobile is not set up for long-term success, and their sale will happen – whether to AT&T or not.
The one advantage AT&T has in this deal is that they operate a GSM network, just like T-Mobile. Verizon uses CDMA and Sprint uses CDMA and the old Nextel’s iDEN.
All that jibberish means that the AT&T and T-Mobile networks are the most compatible, and would avoid the lengthy and costly conversion that was required when Sprint merged with Nextel – even having to offer a special phone that would access both networks for two years after the deal.
Now, from the consumer’s point of view, this deal would allow some 120 million Americans to realize a larger coverage area, more retail outlets, and an improved buying power which will result in an increased selection of devices and a wider array of available services – including T-Mobile customers finally having access to the iPhone.
Don’t believe me? Simply look back to when AT&T and Cingular merged. Never before had so many wireless consumers enjoyed such a large network, expanded choice in devices, and an unbelievable amount of phones priced at $50 and below – often free with contract extension.
And, because both AT&T and Cingular used GSM technology, customers enjoyed improved coverage overnight.
Not to mention that AT&T’s service has suffered tremendously because of the high-bandwidth content being accessed by iPhone users – and expanding their network overnight will ease this congestion. As an AT&T customer, I eagerly await this.
The biggest complaint from the Justice Department is that this merger will stifle competition across the U.S. However, I direct you to companies like TracFone, MetroPCS, U.S. Cellular, and Cricket (the 5th – 8th largest wireless companies in the U.S.) as perfect examples of low-cost – and often no-contract – alternatives to the large companies.
In addition to these choices, there are often concessions made by companies in merger deals such as this. When Cingular acquired AT&T, the new company had to divest its control of several smaller markets to regional carriers – something I am sure would occur here as well. Although I feel compelled to mention that those customers living in the divested areas end up with worse coverage and less choices, because the government chooses to intervene in this manner.
Next up: Employees.
When AT&T Wireless was purchased by Cingular (SBC), several things changed. For one, the new company saw increased purchasing power when it came to negotiating benefit costs for employees. In addition, while there were some initial layoffs because of duplicate positions and redundancies (myself included), the company continued to grow (and I returned as well).
Employees also were able to be part of the largest wireless company in America, which resulted in increased sales – which means increased commissions for sales folks and more job security for everyone else.
Who would argue that T-Mobile employees are better off because they work for the 4th largest company with the worst coverage of the four major carriers? In addition, because T-Mobile is forced to accept low-credit customers to keep up with the larger companies, many of their sales result in cancellations, and therefore commission chargebacks.
Also, T-Mobile does not offer the iPhone – the most sought after wireless device in America.
This merger would change all of that, and keep the standard of living constant for AT&T employees, but be a tremendous boon for T-Mobile workers.
The one downfall I see for T-Mobile employees is that they would have to deal with the Communication Workers of America (CWA), which is a foul organization posing as a pro-worker union. Although most people against this merger seem to love unions, so I guess this would also be a positive for them.
The labor agreement CWA and AT&T negotiated while I was there was good for Cingular employees, but terrible for AT&T workers – who had a far better deal before the union showed up.
One thing I’d like everyone reading this to remember, is that America is far behind Europe and Asia when it comes to wireless coverage and services. The reason for this is that we demand free phones and low-priced plans, leaving carriers with far less money to re-invest in their networks – which is very expensive. In Europe, there is no such thing as included minutes, free nights & weekends, unlimited text messaging, etc. Because of this difference in culture, created by the carriers themselves when they offered free phones in exchange for contracts, we will never be on par with the rest of the wireless world.
One way American companies can close that technology gap is by continuing to increase their subscriber base, and by creating and selling new services which generate additional revenue.
This merger will help achieve that. It will help offer AT&T’s 97 million consumers and T-Mobile’s 33 million consumers the best in what wireless can offer.
AT&T/Cingular has the most grueling and stringent testing phase for all products and services, and has world-class training programs for its employees to better service its customers.
At no time has T-Mobile ever been a top-tier carrier – and I say that as both a consumer, and as someone who lived the mobile phone culture for seven years.
This merger would be a plus for all involved – except Verizon and Sprint who would realize lower market share.
Verizon and Sprint should realize that they will receive 3-4 million new subscribers from customers who leave the newly combined AT&T/T-Mobile for a variety of reasons – including owing AT&T a previous debt, or disliking AT&T. But I guess they aren’t thinking that far ahead.
In the end, however, the Justice Department is overstepping its bounds by interfering with the free market. They do not understand the wireless industry, they are simply attempting to “protect consumers” by not allowing the 120 million AT&T and T-Mobile customers to enjoy a better experience – while assisting Sprint and Verizon in preventing AT&T from once again becoming the largest wireless carrier in America (until Verizon once again retakes the lead – which it did after the AT&T/Cingular merger, and will again).
The government does not increase competition, private industry does. See TracFone, MetroPCS, U.S. Cellular, and Cricket as examples.
The Justice Department needs to focus on the real challenges in our country – instead of suing states for enforcing the law, banning online poker, and refusing to investigate voter intimidation cases.
Until then, it’s hard to take them seriously.
Recently, many of us heard about the bullying done to a resident of Quartzsite, Arizona, by the Chief of Police, Jeff Gilbert. This story had me quite riled up that I had to voice my concerns to Sheriff Don Lowrey of La Pa County, La Paz County Attorney Sam Vederman, and Arizona Attorney General Tom Horne.
My July 16th letter to them is as follows.
Attorney Sam Vederman
1320 Kofa Ave
Parker, AZ 85344
Sheriff Don Lowery
1109 Arizona Ave
Parker, AZ 85344
Attorney General of Arizona
1275 W Washington St
Phoenix, AZ 85007-2926
I am writing as a private citizen of the United States concerning the recent behavior and conduct by the Quartzsite Chief of Police, Jeff Gilbert. It has come to light on Facebook, Fox News and other media outlets as of late.
A resident of Quartzsite, Jennifer Jones, was initially allowed to speak during a Call to the Public segment of the Quartzsite city council meeting on June 28th. She was given the floor to freely speak about corruption occurring within the City of Quartzsite. As per the video on YouTube, Chief Gilbert, unconstitutionally had Ms. Jones arrested for no reason other than speaking out against the perceived corruption. I believe that her Constitutional rights as per the First Amendment were blatantly and grossly violated because Mr. Gilbert and associates did not like the message she had.
A few days later, Chief Gilbert has attempted to declare martial law in Quartzsite, while attempting to have Mayor Ed Foster removed from power. This apparently stemmed from the events of a July 11th city council meeting. This meeting was deemed illegal because of the events occurring during the June 28th city council meeting. A later video shows the Mayor declaring the meeting null and void and walked out of the meeting. However, the city council continued with the meeting, even after the Mayor walked out of it.
Thus, I urge you to initiate an immediate investigation into the actions of Chief of Police Gilbert and others in the grave violation of Ms. Jones’ civil liberties as pertaining to Article 2, Section 6 of the Constitution of the State of Arizona, and to the First Amendment to the Constitution of the United States.
Derek J Witt
I honestly didn’t think I was going to get a response from any of the aforementioned persons. Surprisingly on July 19th, I received the following response from the Attorney General’s Office of Constituent Services.
Thank you for contacting the Arizona Attorney General’s Office regarding your concerns.
Our office has opened an investigation into the allegations of open meeting law violations. This investigation is being conducted through the Office of the Solicitor General, Open Meeting Law Enforcement Team.
Regarding allegations of misconduct on the part of law enforcement officials, this office does not have jurisdiction over local law enforcement and therefore does not have the authority to conduct such investigations. The appropriate agencies to report police officer misconduct would be the United States Dept. of Justice or the FBI.
In regards to criminal activity and public corruption, if someone has evidence of criminal wrongdoing they should submit their complaint / information in writing to the Arizona Attorney General’s Office to the attention of the Special Investigations Section at 1275 W. Washington Street, Phoenix, AZ 85007.
Please note, our Office acts as legal counsel for State Agencies in Arizona and, therefore, cannot act as a private attorney to individual citizens. This means we cannot give legal advice, opinions or interpretation of law to individuals.
Thank you again for contacting our offices.
Office of Constituent Services
Arizona Attorney General’s Office
Apparently, numerous complaints were made to the Arizona Solicitor General’s Open Meeting Enforcement Team (OMET) about the illegal conduct of the city council and the Chief of Police. Even Mayor Ed Foster submitted a complaint to the OMET.
As per the response that Mayor Foster received, OMET consolidated the open meeting violation complaints, and opened an investigation into allegations of Open Meeting Law violations by Chief of Police Jeff Gilberts and others. As many can see on this Youtube video, Jennifer Jones was illegally arrested during an apparently obvious violation of said Open Meeting Laws.
And apparently, other Youtube Videos are surfacing. These demonstrate further gross violation of Arizona State Law, and of the Constitution of the State of Arizona and of the United States. We, as private citizens, must continue to put the spurs upon the likes of Chief of Police Gilbert, and of members of the Quartzsite City Council. The declaration of martial law solely because being called out on perceived corruption cannot stand!
I pray that the State of Arizona stands up for its own citizens and protects them against gross constitutional violations as done by those members of the Quartzsite City Council and Chief of Police Gilbert.
If the budget/debt ceiling debate doesn’t focus voter’s on 2012 nothing will. After cramming ObamaCare through Congress using a parliamentary procedure (Reconciliation) meant for routine spending bills not massive entitlement bills; after cajoling and threatening and “rewarding” (we call it something else in the private sector) loyal party members with scads of taxpayer money for pet projects if they voted to support ObamaCare; after listening to Nancy Pelosi so aptly declare: “We have to pass the bill to know what’s in it…” if you were still sitting on the sidelines, now is the time to engage in the debate.
Let’s set aside the $1.whatever Trillion spending boondoggle that is ObamaCare. Let’s focus instead on the question of spending and the sustainability of spending of our federal government.
Fact: in 2011, the US is projected to spend $772.4B on pensions, $874.4B on health care (before the effects of ObamaCare spending kick in in 2014), $417.1B on welfare, $254.5B on interest on the accumulating debt (projected to be in excess of $15 trillion by the end of FY 2011) and $830.9B on defense. Compare the budget in 2011 to the budget in 1961.
Just fifty years ago federal spending on pensions was $12.8B ($760 billion less than we pay each year to retirees in 2011). Health care costs were $1.6B ($872.8 billion less than 2011, and this is before the enormous costs of ObamaCare commence. It should also be noted here that despite exponential growth in health care payments since 1961, our health care system and availability of health care to the poor was so egregiously wanting, that we had to pass Obama‘s $1 trillion solution to fix it. What we couldn’t do with $872 billion surely we can accomplish with $1 trillion more! ) Welfare costs were $3.2B. Our interest payment on debt outstanding was $7.5B and our defense spending totaled $57.0B.
Consider: Since 1961 the federal budget has expanded 3,735%. According to the government’s own cost of living calculator. $10.00 in 1961 is worth the equivalent of $75.49 in 2011. In other words, while the average citizen in the United States has experienced a 654% increase in living expenses since 1961, the government has expanded its budget by 3,735%.
And is borrowing over 40 cents for each dollar spent.
This is the debate of 2012. Obama wants tax increases–more of your money–rather than to temper spending. And this is before the effects of the inflationary monetary policies of QE2 etc. seep into the economy and turbo charge consumer prices. The question for each of us: are his policies sustainable, effective, or for that matter, constitutional.
What is the primary purpose of government after all?
To protect her citizens from harm. And that includes reckless economic harm.