Tuesday, October 26, 2004

AT&T Wireless, Cingular merger bad news for consumers

Consumer's Union responds to the FCC's approval of the merger of AT&T Wireless and Cingular in AT&T Wireless, Cingular merger bad news for consumers.

What we are looking at here is a further FCC-sponsored erosion of competition in voice communications. Between the recent willingness to allow the telecos to price competition off their network and this decision which locks up large chunks of spectrum in the hands of a single competitor look for a shrinking market in alternatives not just for landline phones but for their major alternative: cell phones.
Mark Cooper, director of research at the Consumer Federation of America, added “no matter how you cut it, this merger is anti-competitive. In major cities across the nation, such as Dallas, Orlando, San Francisco, Memphis, Indianapolis, and New Orleans, this merger will allow the dominant local phone company to control 40 percent or more of wireless customers, in markets where they also control 90 percent of residential wireline customers.”

...the merger sets a dangerous precedent that makes it virtually impossible to block future mergers involving Verizon Wireless and the remaining wireless companies. By allowing Cingular to control up to 70 out of 189 megahertz of available spectrum in a market, the FCC is signaling that Verizon can bulk up in the same manner, leaving only enough spectrum for one potential competitor – even with current plans to auction off new spectrum.

With BellSouth/Cingular as the dominant local supplier Lafayette will be at the center of this drift back toward monopoly provision of telephony. If you thought Cox's ownership of the cable monopoly was bad (suppose Cox were buying DirecTV) get ready for her mean sister...

Now more than ever: I want my wifi/wireless CityCell phone from LUS.

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