US Government Sues To Stop AT&T, T-Mobile Deal - Shelly Palmer

Everyone says ATampampT was surprised I39m not sure why Everyone expected some kind of pushback Although considering the scope and complexity of the deal the Obama Administration39s lawsuit to stop the ATampampT39s 39Billion acquisition of TMobile did come very quicklyWhat are the issues quotWere the merger to proceed there would only be three providers with 90 percent of the market and competition among the remaining competitors on all dimensions including price quality and innovation would be diminishedquot said Deputy Attorney General James Cole That pretty much sums up the government39s position The merger is bad for consumers We will suffer greatly due to lack of competition The deal is bad for America etcATampampT says it needs to buy TMobile so it can acquire the spectrum it needs to satisfy a datahungry marketplace quotWe plan to ask for an expedited hearing so the enormous benefits of this merger can be fully reviewedquot said ATampampT General Counsel Wayne Watts Pretty much exactly what you39d expect ATampampT to sayEven if this deal lives passed this lawsuit and that39s a big quotifquot It will still have to be approved by the Federal Communications Commission and FCC Chairman Julius Genachowski has expressed his concerns about how the deal might impact competition too So look for a second fight that will be just as fierceAs you can imagine there are some very unhappy executives at both ATampampT and DT If the deal unwinds there are serious breakup fees and other issues that will make life generally miserable for the deal team and the bankers involvedAll of this misses the point This is not about ATampampT or TMobile or Verizon or Sprint or competition amp8230 it39s about how you and I will do life in a connected worldHere in America the government does not own our communications infrastructure big telecom companies do They are all quotfor profitquot ventures with shareholders and they exist in a world of extraordinary bureaucracy and regulation There are loopholes to be sure But on the whole private money builds the system and public money regulates itThis worked fine for the past 100 years or so 19th and 20th century networks were complex and high tech for their day but quotHoney hurry up it39s Auntie Gayle calling long distancequot didn39t require a lot of deep thought The people in power forced ATampampT to break itself up into smaller companies and the RBOCs Regional Bell Operating Companies were born They have reassembled over the past little while and now we have ATampampT and Verizon This has been a monumental game of chess with various divisions organizing and reorganizing themselves with the quothelpquot of government regulations into very profitable companiesWhich begs for the question quotIs America best served with two large infrastructure players or 112 large infrastructure players and two small ones that will either merge or exist the business leaving two large infrastructure playersquotHow should our connected future unfold In the Information Age the ability to quickly and efficiently move bits of data from place to place is the one and only key competitive advantage Should we abdicate our position as the most tech savvy country on Earth because the leadership doesn39t now how to structure policy around the issuePlay the two scenarios forward If the deal goes through you39ll have two huge wireless companies vying for customers ATampampT will finally be able to compete with Verizon39s network and in theory could actually offer a competitive product Now they really can39tIf the deal does not go through ATampampT will have to raise money and build out their network if they want to compete with Verizon which they do this will effectively put TMobile and Sprint out of business anyway Why Because ATampampT will have to compete on price while it builds and that will put so much pressure on TMobile and Sprint that they will not surviveEither way this deal goes we are going to end up with a two horse race So what is our government doing instead Making lawyers rich with our tax dollars and dollars from our wireless phone bills What will this lawsuit do to help American wireless consumers Absolutely nothingShelly Palmer is the host of NBC Universalamp8216s Live Digital with Shelly Palmer a weekly halfhour television show about living and working in a digital world He is Fox 5 New Yorkamp8216s Onair Tech Expert WNYWTV and the host of Fox Televisionamp8217s monthly show Shelly Palmer Digital Livingamp160 He also hosts United Stations Radio Networkamp8216s MediaBytes a daily syndicated radio report that features insightful commentary and a unique insiders take on the biggest stories in technology media and entertainment He is Managing Director of Advanced Media Ventures Group LLC an industryleading advisory and business development firm and the President of the National Academy of Television Arts ampamp Sciences NY the organization that bestows the coveted Emmyamp174 Awards Palmer is the author of Television Disrupted The Transition from Network to Networked TV 2nd Edition York House Press 2008 the seminal book about the technological economic and sociological forces that are changing everything and the upcoming Overcoming The Digital Divide How to use Social Media and Digital Tools to Reinvent Yourself and Your Career York House Press 2011 For more information visit shellypalmercomRead all Shelly39s MediaBizBloggers commentaries at Shelly Palmer ReportCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries

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US Government Sues To Stop AT&T, T-Mobile Deal - Shelly Palmer

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