AT&T Will Jump Through Hoops To Get Merger Approval

AT&T will have to comply with many requirements to gain government approval for its merger with T-Mobile.

Many outlets are voicing concerns over a creation of a duopoly in the wireless industry. The merger of AT&T and T-Mobile would make this the largest wireless service provider in the U.S., with 130 million customers and over 40% of the U.S. wireless market.

The merger would give AT&T access to T-Mobile’s network, a huge asset to AT&T who has become notorious for poor service, dropped calls and slow speeds. This merger would also give T-Mobile customers access to the elusive iPhone.

However, by eliminating T-Mobile as a mid-class wireless provider, this leaves Sprint as the only carrier left in this class. If Sprint continues to struggle or even collapse, this eliminates much competition in terms of pricing, giving AT&T and Verizon an avenue to continue to raise prices.

In order to gain permission to sign this deal, AT&T will have to comply with the requirements of both the Federal Communications Commission (FCC) and the Department of Justice (DOJ). The DOJ will likely force the company to give up spectrum, which are bands  of airwaves licensed by the government, and other assets.

The FCC may even go as far as to require the company to provide service to rural areas that have been left uncovered by most wireless companies. Another requirement may be to provide more service plan options with data roaming.

AT&T has stated that it would provide 4G coverage to 95% of the U.S.

Although many concerns have been expressed, it is likely that the deal  will go through. AT&T has shown great confidence that the deal will pass, agreeing upon a $3 billion breakup fee and giving T-Mobile a portion of its spectrum should the deal be rejected. The unusually high fees that have been promised show that AT&T will do whatever it takes to get this deal to pass.

 

— Gary Cassady

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