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Deal to combine AT&T, T-Mobile raises questions
AT & T's surprise announcement of its intention to acquire T-Mobile USA is forcing federal authorities to face tough questions antitrust: can the consumer the United States get a good wireless service at a reasonable price, if they must choose between only two domestic firms?
This debate will be central to consideration by the government of $ 39 billion in cash and the agreement was announced Sunday. If approved, the acquisition will propel the former AT & T Verizon Wireless to become the largest mobile phone supplier country.
The agreement will combine AT & T Inc., the second largest mobile operator, T-Mobile USA, the fourth largest, which is now owned by Deutsche Telekom AG, Germany. And it could pave the way for Verizon to go after Sprint Nextel Corp., which is a distant 3 and the only vendor to remain national.
None of the small U.S. companies such as Leap Wireless, Metro PCS and U.S. Cellular, is a complete national coverage.
Officials from the Ministry of Justice and Federal Communications Commission could take a year or more to examine the agreement before deciding to block or allow to proceed to the substantive conditions.
"I am not convinced that this agreement is impossible," says Jeffrey Silva, an analyst with Medley Global Advisors. "But you raise a very, very heavy."
The inspection body will do in-depth analysis of each market to determine how many wireless options for consumers would be in communities throughout the country. And even if they permit a lot with the officers would probably require the new company to sell the property - including cell towers wireless spectrum and customers - particularly in markets that are too concentrated.
The big question that arises is whether the federal authorities the enormous cost of building a nationwide wireless network means that in a market dominated by only two companies is the best we can expect.
And if so, what kind of mergers, the government should impose on AT & T to prevent abuse of power?
"This market does not work, even before this merger," said Mark Cooper, research director at the Consumer Federation of America. "I want politicians to deal with the fiction that competition in this market is sufficient to protect consumers."
Cooper, meanwhile, would prevent federal regulators see AT & T from engaging in common practices in the industry, such as charging consumers with substantial costs for text messaging and terminate contracts before their expiration.
He would also like to see officials to impose strong "net neutrality" rules, AT & T wireless system, which ensures that subscribers are able to use applications and other applications on-line without operator interference.
net neutrality rules adopted by the FCC late last year to prohibit broadband providers to discriminate against online traffic, but give a lot of wireless companies flexibility in traffic on their systems.
Stifel Nicolaus analyst Rebecca Arbogast Company believes that government regulators will also consider the conditions which are intended to help small wireless providers compete.
These could include requirements for data roaming, which would require AT & T to enable small businesses in the region using its wireless network to send data traffic in places where they offer their own service. The FCC is considering the adoption of industry data on the scale of the rules of homelessness.
Government officials may also impose "special access" obligations, to ensure its rival mobile phone companies top lines owned by AT & T that have to link their towers to telecommunications networks and the broader Internet.
Smaller carriers - Sprint, in particular - that they pay high prices for access, because much of the critical network infrastructure is owned by large corporations to fixed telephony, AT & T and Verizon, which competes with the wireless arena .
If officials ultimately did not sign the proposed acquisition of AT & T T-Mobile, they are likely to require the company to sell combined wireless spectrum in certain markets. Hopefully, it would be that these waves - which are scarce - the wind in the hands of small players like Sprint and any step to restore some competition.
Wireless companies are clamoring for more on radio waves, to keep the explosive growth of online applications, mobile video and other broadband wireless applications. In fact, AT & T said that one of the key benefits of the transaction T-Mobile is that it allows both carriers' access to more spectrum, but AT & T is already broad range of spectrum will not be used for many years.
Both the FCC and the Obama administration is considering ways to free up more spectrum for wireless broadband.
T-Mobile's own failed struggles for more wireless spectrum may have helped push him into the arms of AT & T. The company has been vigorously lobbying Congress and the FCC to auction off a portion of the first radio waves released in the 2009 transition from analog to digital television signals.
T-Mobile hoped to bid on this spectrum and seemed to present convincing arguments to the FCC, who proposed auction of radio and television last year.
But in a setback for T-Mobile, the agency later withdrew the plan after running into opposition from public safety officials - and their allies in Congress - who wants to use the spectrum to build a national wireless network police, firefighters and emergency workers.
For its part, AT & T rejects the notion that the wireless industry is too concentrated.
James Cicconi, senior executive vice president of external affairs and law, said that consumers still have the possibility to choose between different mobile phone providers - including Leap, Metro PCS and U.S. Cellular - In many markets, even if the transaction is approved.
He added that the merger will have significant benefits for the public, such as AT & T is committed to cover 95 percent of U.S. population in speed wireless Internet access fourth generation, also known as 4G. This goes to the heart of a telecommunications policy objective over the FCC and the Obama administration, which promised to bring high-speed Internet for all Americans. See wireless as a key to achieving this goal, especially in rural areas, where it makes economic sense to build the fixed networks.
Other factors that might contribute to AT & T sells a lot to the government include its promise to invest more than $ 8 billion of its 4G network over the next seven years, and the fact that its workforce is organized. T-Mobile workers have no bargaining.
At this stage it is too early to know whether the merger will be approved. But clearly, Silva said that "there will be a rich mixture of very important policy and political considerations."
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