It’s taken a few years, but the federal government finally found a telecom merger that it couldn’t stomach: On Wednesday, the Department of Justice filed suit to block AT&T’s proposed purchase of T-Mobile USA.
It’s about time. AT&T’s $39 billion consolidation of its competitor looked like a bad idea when the two firms announced it in March, and it’s only gotten worse since then.
The DoJ’s filing (PDF) before the U.S. District Court for the District of Columbia tosses aside AT&T’s contention that it will have plenty of competition afterwards. no, the department says: Customers who need nationwide coverage and support — especially business and government users — won’t turn to the small regional carriers that AT&T says will keep it honest. That would leave only Verizon Wireless and the far smaller Sprint as alternatives.
But even less demanding consumers can appreciate the filing’s other argument: That T-Mobile provides a worthy alternative to the other three big carriers, and in particular AT&T, the only other nationwide firm to support the GSM standard most of the rest of the world uses.
I admit I haven’t always given T-Mobile enough credit for this, in part because its coverage has fallen short of competitors. (That’s one reason I use Sprint myself.) but in numerous areas, this Deutsche Telekom subsidiary has outdone AT&T:
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* It’s offered cheaper “Even more Plus” price plans to people who bring their own phones (even if it’s pulled that option from its site).
* T-Mobile is more willing than AT&T to unlock a phone for use on other GSM carriers overseas, even though that means it can’t collect steep international roaming charges.
* it was the first carrier to sell a smart phone running Google’s Android software and continues to offer an excellent selection of hardware; PCMag.com analyst Sascha Segan estimated that we’d have 20 percent fewer phones to choose from nationwide carriers after T-Mobile’s assimilation.
* T-Mobile’s upgraded “4G” broadband is cheaper than AT&T’s and, in my tests, faster, while its data plans have a more generous monthly cap than the stringent 2-gigabyte limits of AT&T and Verizon.
* T-Mobile also charges less for text messaging, especially since AT&T “streamlined” its plans last month–its new customers can either pay per message or shell out $20 a month for unlimited texting.
These and other factors have led more than a million iPhone users to jailbreak and unlock their phones to use them on T-Mobile’s network.
AT&T has offered innovations of its own. although its 2 GB data cap may not be popular, by offering a cheaper, 200-megabyte plan it drastically cut costs for casual users. Its “rollover” option lets others pick cheaper voice plans. And by letting Apple ship the iPhone without the usual side helping of unwanted carrier-specific software, it did customers a colossal favor.
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One of AT&T’s core arguments for the merger, meanwhile, has only gotten weaker since March. Its claim that it needed to buy T-Mobile to expand 4G coverage was undercut by the leaked memo revealing that this expansion would cost about a tenth of what it would pay to engulf its competitor.
In short, we need these two companies competing against each other (even if T-Mobile ultimately does so under new owners), not merging into one another. The logic behind that is why we have antitrust laws in the first place. It’s about time the government remembered this, instead of allowing yet another step towards the rebuilding of Ma Bell.