The stock market shot up early on Monday March 21. Trading up by 1.5%. The reason? AT&T is buying T-Mobile. The consequence of this planned purchase is that there will now be just three national cell phone carriers. It’s a great benefit for the carriers. With less competition the cost of services will most assuredly increase. That means more profit for AT&T Sprint, and Verizon. The consolidation must be approved by the Department of Justice (DOJ) and Federal Communications Commission (FCC). Who doubts this won’t be approved? The losers will be the public.
There is no justification for this proposed buy-out. Both AT&T and T-Mobile are profitable companies. The fact that AT&T service is poor is not a societal concern. What ought to be a concern is the likely impact of reduced competition.
David Lazarus of the Los Angeles Times wrote about this same issue in the March 21, 2011 edition.
This is not the first time there has been an attack on competition. Compared to just ten years ago there are fewer banks, department stores, drug stores, and supermarkets now then existed then. Here in Los Angeles there are just four major banks to serve a population of 10 million people. They are Bank of America, Wells Fargo, Chase, and Citibank. Other banking companies in the city are significantly smaller.
There is no Teddy Roosevelt alive today. This trend will not change if the public remains quiet.
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