Time traveling to figure out how the AT&T-T-Mobile deal turns out, and pilots get iPads
Executives at AT&T attend a news conference where it was announced that AT&T Inc. will be buying its wireless rival T-Mobile USA from Deutsche Telekom AG for $39 billion in cash and stock on March 21, 2011 in New York City.
On one side, you have AT&T, the nation's second largest wireless carrier. It wants to acquire the fourth largest, T-Mobile. Getting approval of this deal has meant a lot of lobbying on the part of AT&T and has led the company to make a lot of promises lately, including yesterday's announcement that if the deal is approved, AT&T will bring 5,000 call center jobs back to America.
On the other side, you have the Department of Justice, which yesterday sued to stop the deal, saying that it would hurt competition in the wireless market and drive up prices for the consumer. Sprint, the third largest carrier, is strongly opposing the deal too, since it would much rather be third in a field of four than third in a field of three.
So what's going to happen here? Well, someone will win and someone will lose. We just don't know who. Either way, there will be an impact on you and me as regular old cell phone customers. To imagine what that impact might be, we travel into the future -- all the way to Sept. 1, 2012! -- to envision two different scenarios.
Molly Wood of CNET describes a world where AT&T got its wish and acquired T-Mobile:
"On the one hand, it's one fewer choice for sure. Obviously, as it became clear that the merger was going to go through, we saw other carriers step up -- different kind of plans. Pre-paid plans and smaller regional carriers have become more and more important, as it became clear that the national carrier number was going to go down to three. Really it means that you have three major choices. And really arguably two major choices, those being AT&T and Verizon."
So did this result in higher prices?
"It certainly did. I mean that was just, I think, never not going to happen. We'd seen Verizon raise prices even in advance of this merger. They had gotten rid of unlimited plans. T-Mobile still had some of the cheaper plans available and obviously those were swallowed up by the more expensive AT&T plans. Sprint has stood alone in terms of trying to keep inexpensive unlimited plans available. But with the iPhone coming, they're feeling the pressure too."
But what of the alternative universe future? We have that covered too, in a call to Susan Crawford of Cardozo Law School, who tells us about her imagined world where the deal fell apart and some of the repercussions of that.
"AT&T has had to pay T-Mobile $3 billion for the failure of the merger," she says. "And that means that we have potentially a more successful carrier in the person of T-Mobile that can really shake things up in the wireless carrier marketplace. And T-Mobile is pretty plucky. They were already playing role of the upstart that's willing to go the extra mile and provide excellent customer service engage in Washington policy wars in a way that's very important, and provide lower cost plans for Americans."
Again, don't get all War of the Worlds panicky here. Neither scenario has happened. Yet. We'll keep you posted.
Also in this program, several major airlines are beginning to replace their pilots' flight bags with iPads. Considering the bags weigh 38 pounds a piece and the iPads each weigh a pound and a half, it's kind of a big deal. Not to mention the Angry Birds capabilities.