FCC Stops Shot Clock On Merger Talks

 

Okay, Okay, so it’s not an actual shot clock, but the FCC has stopped it anyways.  The backstory is that the FCC normally gives 180 days to complete merger reviews, and they just stopped the T-Mobile and AT&T one at 83 days.  Stopping it isn’t a big deal, it has been done before, but the reason is very important.  In this case, they are stopping it to allow AT&T time to rework their economic model.  As Rick Kaplan, head of the FCC’s Wireless Telecommunications Bureau, Said:

“Within the past week, AT&T has indicated that, since filing its public interest statement supporting its proposed acquisition of T-Mobile and its opposition comments to various petitions to deny the merger, it has developed new models upon which it now relies.  Indeed, AT&T is now expressly relying on these models to bolster its arguments concerning the size of the efficiencies made possible by the merger as weighed against the potential anti-competitive effects.”

Michael Balmoris of AT&T said:

“AT&T has developed additional economic evidence that further confirms the tremendous efficiencies and consumer benefits resulting from this transaction, because this information, which we will submit next week, is detailed, we are not surprised that the FCC will take the time it needs to thoroughly understand our submission.”

The extra time will allow the FCC to evaluate and test the new evidence.  So it seems that AT&T is reworking their deal because their current one may not be working.  That doesn’t seem too confident to me.

WirelessWeek

 

 

Tags: , , , , ,

  • William

    I think we need more GSM competitors, not fewer.  I like GSM because of how easy the SIM cards are to use to change phones and how you can talk and use the internet at the same time.  Also, GSM’s global compatibility is a big plus.  (On the other hand, CDMA seems to have better coverage indoors, which is very important.)

    But despite my preference for GSM, I honestly have been thinking of switching from GSM to CDMA.  I find that the quality of service that both AT&T and T-Mobile deliver to be less than reliable.  Too many dropped calls, dead zones, and other problems that make communication unreliable and unusable.  Since neither has demonstrated, in my experience, the ability to build a reliable network (and have had plenty of time and bandwidth to do so), I would like to see new players in this field.

    I realize that AT&T will claim that they need this acquisition to build a better network, but they have been sitting on tons of unused bandwidth, have had plenty of time, and have plenty of cash, so that is a fat red herring.

    I would like to see more competition in the GSM arena so that other companies can develop this technology.  I find both large US GSM companies inadequate and unreliable at this time.  Merging them into one company will simply eliminate competition.  Neither company has a track record of delivering a quality network, in my experience.  We need more GSM competition, not less.

    • Juicebox

      I agree. I have already jumped onto the CDMA wagon. I think I’m liking this wagon more and more.

      • Anonymous

        Thinking same thing,  I went to Sprint store since their rates looked not too bad.  My very first cell service was Sprint in ’97-99, 200 minutes for $30 a month I think.  The whole CDMA thing was and still is better all over the Northeast at least as far as call coverage.  Verizon folks never complain about calling.

    • Anonymous

      Still have a T-Mobile line, but also a Virgin line too.  (Virgin=Sprint Company = CDMA).  I’m able to carry both phones around to compare signals.

      T-Mobile’s signal is always lousy in my house.  3G – 4G data has been isolated to one spot on a desk, or sitting by a pic window. Calls sometimes disconnect.

      The Motorola Triumph (A Virgin prepaid “Droid-like” phone) gets three bars everywhere in the house and 3G strong.

      From having Sprint before, I knew its signal was better all around in the home.

      Of course all this is personal and has nothing to do with the carriers.  Every home, office and use is different. When I’m not in my residence all signals are good.

    • Anonymous

      Still have a T-Mobile line, but also a Virgin line too.  (Virgin=Sprint Company = CDMA).  I’m able to carry both phones around to compare signals.

      T-Mobile’s signal is always lousy in my house.  3G – 4G data has been isolated to one spot on a desk, or sitting by a pic window. Calls sometimes disconnect.

      The Motorola Triumph (A Virgin prepaid “Droid-like” phone) gets three bars everywhere in the house and 3G strong.

      From having Sprint before, I knew its signal was better all around in the home.

      Of course all this is personal and has nothing to do with the carriers.  Every home, office and use is different. When I’m not in my residence all signals are good.

    • Tmoteader

      Even if t-mo and att merge I will stick with them, I enjoy GSM too much to let it go.

  • William

    I think we need more GSM competitors, not fewer.  I like GSM because of how easy the SIM cards are to use to change phones and how you can talk and use the internet at the same time.  Also, GSM’s global compatibility is a big plus.  (On the other hand, CDMA seems to have better coverage indoors, which is very important.)

    But despite my preference for GSM, I honestly have been thinking of switching from GSM to CDMA.  I find that the quality of service that both AT&T and T-Mobile deliver to be less than reliable.  Too many dropped calls, dead zones, and other problems that make communication unreliable and unusable.  Since neither has demonstrated, in my experience, the ability to build a reliable network (and have had plenty of time and bandwidth to do so), I would like to see new players in this field.

    I realize that AT&T will claim that they need this acquisition to build a better network, but they have been sitting on tons of unused bandwidth, have had plenty of time, and have plenty of cash, so that is a fat red herring.

    I would like to see more competition in the GSM arena so that other companies can develop this technology.  I find both large US GSM companies inadequate and unreliable at this time.  Merging them into one company will simply eliminate competition.  Neither company has a track record of delivering a quality network, in my experience.  We need more GSM competition, not less.

  • http://twitter.com/efjay01 Ef Jay

    There is no consumer benefit in the higher prices current T-Mobile customers will have to pay and the reduced choice for using an unlocked GSM phone of your choice. Is that really so hard to understand?

  • Anonymous

    There’s more evidence that this deal will be approved… basically that Verizon, like AT&T, is reporting outstanding second quarter numbers.

    Bottom line: AT&T and T-Mobile will argue that if the deal is not approved T-Mobile’s U.S. operation will tank and be no more.  This is the parties best argument, since Washington is not in the business of denying purchase/sale applications if the affect will be the seller closing its doors.

    This “impending doom unless a knight in shining armor comes to the rescue” argument is not unique.  It’s one that’s been advanced by airlines, oil companies, and communication companies, to name a few. This is AT&T/T-Mobile’s BEST argument and they know it. (And remember Borders.  It could not find a buyer for its stores, so now the company is liquidating all assets will be gone.  Same thing happened to CompUSA, and Circuit City.)

    And in my opinion, AT&T and T-Mobile are setting up events to bolster this argument. 

    As to the numbers: AT&T just reported great Q2 results (e.g., adding 1 million post-paid customers, increasing ARPU, etc.)

    Now we hear Verizon reporting similar glowing Q2 numbers. (E.g., increasing its subscriber base by 6.6 percent to 106.3 million customers and a 10.2 percent revenue increase to $17.3 billion for the quarter. Verizon’s DATA revenues increased $1.1 billion to $5.8 billion.

    And prepaids (Boost, Metro PCS, Virgin, etc.) are reporting increasing subscriptions.

    This all tells me that T-Mobile’s Q2 numbers will be down, again.  From the consumer side it also tells me that people are leaving the sinking ship; and the other carriers are providing speed boats to take them to waiting ships.

    The more disappointing quarters T-Mobile has, the more likely Washington is going to approve the deal. Bad numbers will assure acquisition approval.  Washington is not going to force T-Mobile to stay in business (it can’t do that, but it can deny the deal with the implication T-Mobile will continue business), especially if T-Mobile (in collusion with AT&T) says it will go belly up if the acquisition is not approved.

    AT&T and T-Mobile are probably in cahoots to create evidence to advance this argument. ;)