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Saturday Legal Briefs

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6 Replies. 1 pages. Viewing page 1.
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6. Re: Saturday Legal Briefs Nov 6, 2011, 00:41 killer_roach
 
ChangWizzle wrote on Nov 5, 2011, 22:04:
Pete wrote on Nov 5, 2011, 20:34:
killer_roach wrote on Nov 5, 2011, 18:09:
Ozmodan wrote on Nov 5, 2011, 15:08:
AT&T just does not get it, there is no way anyone is going to let them merge with T-mobile. It basically makes them a semi-monopoly with one competitor, Verizon.

Any politician that lets that happen will be crucified.

This is why you're not an economist. The odds that the merger doesn't go through are minimal at best.

Leave antitrust talk to those of us who have actually studied it.

Was Ozmodan wrong with his statement?

More importantly, HOW was Ozmodan wrong with his statement? (

Simple - to create a situation where the Department of Justice's Antitrust Division or the Federal Trade Commission can block a merger under the Sherman or Clayton Antitrust Acts, they have to demonstrate that the merged company would have the power to unilaterally set prices in the market and/or discourage new entry into the market. For those looking for a spoiler -- that situation appears to be absent from this market.

Here's the part of it that people seem to be not picking up on - pretty much no matter what, in the next year or two T-Mobile will cease to exist in the US market. They are bleeding money and the parent company, Deutsche Telekom, wants to get rid of them. Either somebody buys them out or they fold up shop, the latter of which would likely be more detrimental to consumers than a buyout.

The question then would be whether or not AT&T would be able to set prices or discourage competition entering into the wireless business - something that doesn't seem particularly likely, especially with the rise of regional to quasi-national carriers like Cricket and MetroPCS seemingly able to continue operating with low plan costs irrespective of what the major carriers are doing. Far from treading water, both aforementioned "budget" carriers are looking to add services like LTE in the coming years, something that would make the "monopoly" argument specious at best. Beyond that, the market share of a combined AT&T and T-Mobile, while being the largest of any cell phone carrier, would still not even constitute a majority of cell phone customers in the US, much less an amount that would give them the ability to control prices (keep in mind that, additionally, many of these customers are on pay as you go plans, especially on T-Mobile - increases in rates could easily send these people elsewhere).

That being said, there will be some regulatory oversight that may need to be taken with respect to the merger, in particular with how to manage the contracts of existing T-Mobile customers as well as how to alleviate redundancies in spectrum (a government property that the FCC licenses out to private entities), more than likely by selling it to other carriers (MetroPCS, for instance, has already expressed interest in buying some of this wireless spectrum for the purposes of rolling out their own LTE network). The wireless communications industry is a concentrated field relative to many other industries, but this is also to be expected due to economies of scale (the cell phone carriers are about as close to a classic "natural monopoly" situation as you can get outside of utility companies).

As far as where Ozmodan is wrong with his statement, he forgets the number of regional carriers, quasi-national carriers, budget carriers, and, above all, the loudest objector to the merger, Sprint (who seems to oppose the merger because it would increase competition in high-speed data by allowing AT&T to roll out its LTE network faster while Sprint is stuck with a flagging WiMax network that has problems competing in speed terms with HSPA+, let alone LTE). AT&T has little means by which to fix prices for the reasons I mentioned earlier, and the natural untangling of spectrum issues will likely put MetroPCS into a stronger position as a #4 carrier than T-Mobile ever had.
 
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5. Re: Saturday Legal Briefs Nov 5, 2011, 22:22 space captain
 
the professor must be busy  
Go forth, and kill!
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4. Re: Saturday Legal Briefs Nov 5, 2011, 22:04 ChangWizzle
 
Pete wrote on Nov 5, 2011, 20:34:
killer_roach wrote on Nov 5, 2011, 18:09:
Ozmodan wrote on Nov 5, 2011, 15:08:
AT&T just does not get it, there is no way anyone is going to let them merge with T-mobile. It basically makes them a semi-monopoly with one competitor, Verizon.

Any politician that lets that happen will be crucified.

This is why you're not an economist. The odds that the merger doesn't go through are minimal at best.

Leave antitrust talk to those of us who have actually studied it.

Was Ozmodan wrong with his statement?

More importantly, HOW was Ozmodan wrong with his statement? (
 
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3. Re: Saturday Legal Briefs Nov 5, 2011, 20:34 Pete
 
killer_roach wrote on Nov 5, 2011, 18:09:
Ozmodan wrote on Nov 5, 2011, 15:08:
AT&T just does not get it, there is no way anyone is going to let them merge with T-mobile. It basically makes them a semi-monopoly with one competitor, Verizon.

Any politician that lets that happen will be crucified.

This is why you're not an economist. The odds that the merger doesn't go through are minimal at best.

Leave antitrust talk to those of us who have actually studied it.

Was Ozmodan wrong with his statement?
 
Doin' it Big
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2. Re: Saturday Legal Briefs Nov 5, 2011, 18:09 killer_roach
 
Ozmodan wrote on Nov 5, 2011, 15:08:
AT&T just does not get it, there is no way anyone is going to let them merge with T-mobile. It basically makes them a semi-monopoly with one competitor, Verizon.

Any politician that lets that happen will be crucified.

This is why you're not an economist. The odds that the merger doesn't go through are minimal at best.

Leave antitrust talk to those of us who have actually studied it.
 
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1. Re: Saturday Legal Briefs Nov 5, 2011, 15:08 Ozmodan
 
AT&T just does not get it, there is no way anyone is going to let them merge with T-mobile. It basically makes them a semi-monopoly with one competitor, Verizon.

Any politician that lets that happen will be crucified.
 
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