Thursday, June 23, 2011

Mergers, Data Plans and the FCC: How the wireless world could turn upside down*

It could be the beginning of World War III for the wireless world. From reconfigured data plans (Verizon) to the ongoing AT&T/ T-Mobile merger, the telecommunications industry is dominating the news cycle.

Both events greatly influence consumers. But the merger, which was announced in March, will have the most lasting impact.

Here is what you need to know: AT&T announced a bid to acquire T-Mobile for $39 billion. Because of anti-trust laws the offer must be reviewed by Federal Communications Commission (FCC). If the FCC approves the acquisition it would merge the second and fourth largest wireless service providers leaving cell phone users with limited options. Past similar situations have been unsuccessful.

As a consumer, there are some things you should consider. One, the merger could affect up to 55 million Americans who currently have T-Mobile or AT&T. You’re probably thinking, “so what’s the big deal, I don’t have either provider?” Don’t jump the gun too quickly. While, consumers may receive better cell coverage and 3G connection, it means we will all pay higher prices, regardless of the service we use. Gigom reported earlier this year that because T-Mobile has been fairly aggressive in offering cheaper voice and data plans their competition has been forced to keep their prices down too. “This has worked well for U.S. consumers. With the merger of AT&T and T-Mobile, the market is now reduced to three national players: AT&T, Verizon and Sprint.”

Unfortunately, it looks like the consumer will get the short end of the stick, or should I say higher a phone bill. Let’s hope the FCC gives the merger some thought.

*This is a two part series.

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