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What Does Proposed AT&T and T-Mobile Merger Mean?

What Does Proposed AT&T and T-Mobile Merger Mean?

Welcome to the Media Consortium’s column, Wavelength, your bi-weekly field guide to the world of media policy. Over the next four months, we’ll be compiling great content, connecting the dots, building context, and reporting how media policy impacts the lives of everyday people. From the ongoing battle over Net Neutrality to the wild world of Internet regulation, from partisan crusades to media accountability, the Wavelength is here to keep you in the know.

This week, we’re focusing on major mergers, holding telecom giants accountable, and the revolving door at the Federal Communications Commission (FCC).

So, without further ado, let’s take a spin through the media zone.

AT&T to Absorb T-Mobile?

On Sunday, AT&T announced it had reached an agreement with T-Mobile to buy the mobile phone service provider for $39 billion. As reported in the New York Times, the deal would “create the largest wireless carrier in the nation and promised to reshape the industry.”

The immediate upshot is that the number of nationwide wireless carriers would drop from four to three, with Sprint Nextel running a distant third behind AT&T/T-Mobile and Verizon. Another impact could be higher rates for current T-Mobile customers. Advocates of the deal suggest it could improve AT&T’s oft-criticized service, resulting in fewer dropped calls. However, critics note that the roughly $3 billion in projected annual cost savings will likely come at the expense of workers at the hundreds of retail outlets expected to close, if the deal goes through.

Both the Justice Department and the FCC have to sign off on the merger before it can be approved, a process that could take up to a year.

House adds insult to NPR’s injury

On St. Patrick’s Day, the Republican-controlled House voted 228-192 to end federal funding for NPR. The move came on the heels of a secretly recorded video from conservative activist James O’Keefe that purportedly showed NPR fundraiser Ronald Schiller expressing support for Islamic fundamentalism and disavowing the Tea Party as “racist” — leading Schiller and NPR CEO Vivian Schiller (no relation) to resign. The video was later revealed to be excerpted and heavily edited from a longer video which places Schiller’s remarks in context.

At TAPPED, Lindsay Beyerstein watched the entire two hour video, and notes that:

O’Keefe’s provocateurs didn’t get what they were looking for. They were ostensibly offering $5 million to NPR. Their goal is clearly to get Schiller and his colleague Betsy Liley to agree to slant coverage for cash. Again and again, they refuse, saying that NPR just wants to report the facts and be a nonpartisan voice of reason.

As reported in the Washington Times, the Democratic-controlled Senate is unlikely to pass the bill, making NPR’s federal funding safe — for now. However, the timing of the vote suggests that House Republicans are essentially endorsing O’Keefe’s questionable tactics, showing that their dislike of the so-called liberal media is of greater concern.

Telecoms add ramming to their list of illegal practices

A recent AlterNet story by David Rosen and Bruce Kushnick details sneaky, unethical, and possibly illegal telecom tactics, the most recent of which is “ramming.”

“Ramming” happens “when a phone company’s customer is put on a service plan or package s/he did not need or want or cannot even use.” According to the article, “An estimated 80 percent of phone company customers have been overcharged or are on plans they did not need or even order. These and other scams can cost residential customers $20 or more a month extra and small business customers up to thousands of dollars a month.”

These practices are insidious because modern telephone bills are so cryptic that it’s not easy for even the most astute customer to figure out they’ve been duped.

Powell’s next move

Last Tuesday, former FCC chair Michael Powell announced that he has taken over as president of the National Cable and Telecommunications Association. Leading media advocacy organization Free Press snarkily congratulated Powell via a statement from Managing Director Craig Aaron:

If you wonder why common sense, public interest policies never see the light of day in Washington, look no further than the furiously spinning revolving door between industry and the FCC.

Former Chairman Michael Powell is the natural choice to lead the nation’s most powerful cable lobby, having looked out for the interests of companies like Comcast and Time Warner during his tenure at the Commission and having already served as a figurehead for the industry front group Broadband for America.

AT&T imposes monthly usage caps

Finally, we’ve got more bad news for those unlucky enough to have AT&T as their Internet and cable service provider. As Truthout’s Nadia Prupis recently reported, AT&T customers who use the company’s U-Verse cable TV service and DSL hi-speed Internet services in the United States can expect a bump in their monthly bills if they exceed a new usage cap — 50GB for DSL customers and 250 GB for U-Verse users. Those who exceed the storage fee will be charged $10 extra for every 50GB over the limit.

Surprisingly, the telecom behemoth continues to insist their price-gouging moves are in the consumer’s best interests. According to an AT&T press release: “Our new plan addresses another concern: customers strongly believe that only those who use the most bandwidth should pay more than those who don’t use as much.”

This post features links to the best independent, progressive reporting about media policy and media-related matters by members of The Media Consortium. It is free to reprint and repost.

Related Stories:

NPR Shocked That O’Keefe Video Was Edited Misleadingly

Skake Up At NPR After Another O’Keefe Stunt

FOX News Chairman Compares NPR to Nazis



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Photo by ElectronicFrontierFoundation
written by Eric Arnold,a Media Consortium blogger

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7:26PM PDT on Mar 27, 2011

I have Tmobile and hate it, so as long as i dont have switching difficulties id love to have AT&T.

7:17PM PDT on Mar 26, 2011

Caps on internet usage? I have AT&T home internet. How can they even do that? How dare they limit my usage at home! How the hell do you even know if you're over the limit. It's enough to have limits on cell phones, then we have to have it at home too! Guess I need to see what other providers are in the Houston area.

4:19PM PDT on Mar 24, 2011

Once again, AT&T attempts to take over the world. When they took over Cingular, all of a sudden, my reception sucked and I couldn't complete a conversation without dropping a call at least once. I broke free and ran to Sprint, and haven't looked back.

PS What happened to the antitrust laws that forced them to break up before? Have they been repealed or something?

4:40PM PDT on Mar 23, 2011

Never had much regard for AT&T. Liked them better BEFORE deregulation of the industry. Good news is I can cancel any time I want.

3:16PM PDT on Mar 23, 2011

Have had T-Mobile for 4-years. Switched from Verizon to T-Mobile for I saved $25 a month over VZW plans for my BlackBerry. Now after the grandfathered plan runs out, I'll be forced to pay higher prices again! :-(

Also even though both networks are GSM, AT&T has plans to utilize some of T-Mobile's old bandwidth for the new 4G LTE, so either your old T-Mobile phone will just eventually be 2G on AT&T's network, or you'll have to get a new phone.

Hope AT&T is generous or offers a transitional plan/pricing, but guess I'm dreaming if they'll do that! With them in a year being the only GSM carrier in the US there will be no competition to keep the pricing down.

Too bad all around...I liked T-Mobile! Great customer service and plans. Never really had a coverage issue.

3:08PM PDT on Mar 23, 2011

It means that AT&T cannot grow and/or continue to make profits without swallowing up competitors. Their service and products stink - people are leaving them in droves, and all that will happen is they will ruin T-Mobile as well.

I thought we had anti-trust laws that prevented gigantic, incompetent companies from swallowing up smaller competition?

Guess I was wrong - or maybe all the politicians and agencies are finally bought and paid for.

1:44PM PDT on Mar 23, 2011

It means your bought sold and packaged like a product.

12:44PM PDT on Mar 23, 2011

It most likely means higher prices and more layoffs after the merger. There are savings gained by consolidation but only the corporation will benefit from them.

7:11AM PDT on Mar 23, 2011

Thanks for the info.

10:44AM PDT on Mar 22, 2011

thanks for sharing

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