Sufficiently confused? Decidedly undecided? You are not alone. TCO opined a few months ago—tentatively—that the merger is a good thing for consumers, but the Justice Department disagrees.
Every coin has two sides, though in Washington we often see one side simply screaming “Headsheadsheads!” while the other side screams “Tailstailstails!” The louder voice prevails; meanwhile the true value of the coin is left ignored. The fight over the AT&T and T-Mobile merger, which would give AT&T over 40% of the wireless communications market share, is no exception.
I mean, of course the merger will benefit consumers by consolidating companies, making production more efficient and therefore driving down costs. But of course it will decrease competition, effectively creating a duopoly of AT&T and Verizon, which will drive up prices.
And of course it will hurt the job market, eliminating the inefficient overlaps between the two companies. But of course it will help the job market; otherwise why would the majority of labor groups support the merger?
Customer service, at least, will improve as AT&T is able to operate on a larger scale and allocate a more efficient group to assistance. But of course customer service will suffer; after all, what incentive is there for AT&T to provide higher-quality customer service if there is only one viable wireless alternative? (And have you ever tried calling Verizon for assistance? Not exactly a friendly substitute.)
Sufficiently confused? Decidedly undecided? You are not alone. TCO opined a few months ago—tentatively—that the merger is a good thing for consumers, but the Justice Department disagrees. Yesterday the Department filed an antitrust suit against AT&T, the United States’ second-leading wireless company (for a copy of the United States’ Complaint click here).
The reality is the DOJ will use the legal action as leverage in merger negotiations. “If you agree to terms X, Y and Z, we will drop our suit and allow the merge to proceed.” But until that day, we’re left guessing and arguing as to the true pros and cons of the merger.
Left guessing. Of course.
Assisted by David Martin