Today, it was announced that AT&T plans to buy up T-Mobile for a cool $39B. This would combine both nationwide GSM providers into the single largest wireless company in the country and bump us down to three such companies. A lot of fiber naysayers like to point to wireless as an example of robust telecommunications competition in the country, but, ignoring the wide gulf of differences between wireless and wireline telecommunications, how can we have a competitive market with just three nationwide carriers?
I’d argue that we can’t. Sprint will continue to be a bit player in the space since they don’t have much in the way of wireline assets and Clear is a boat anchor around their neck. Smaller and largely regional cell providers like Cricket and US Cellular don’t get the hot devices people want and often get chained down in pre-paid pricing plans. The MVNOs live and die by the terms set by larger carriers. The big companies sit on a mountain of unused spectrum which prevents new entrants to the market from even taking hold.
In short, we’re witnessing the wireless space do the exact same things that make us hate the wireline space. This merger will mean higher prices, less consumer choice, and more regulatory capture than ever. Sadly, I expect the same thing to happen that always does when a bad deal is put before the regulators: the state PUCs and PSCs will hand-wring and sign off on what they know is a bad deal using conditions that they know either won’t be met or would have been anyway, and the FCC will just rubber-stamp the decision with minimal oversight or review. And the whole time, we’ll be told that it’s a good deal for consumers.