AT&T’s T-Mobile Takeover: Bigger is Not Better

TURN said today the AT&T takeover of T-Mobile would benefit AT&T’s bottom line, but not its customers

For Immediate Release from TURN, The Utility Reform Network

TURN said today the AT&T takeover of T-Mobile would benefit AT&T’s bottom line, but not its customers. If it acquires T-Mobile, AT&T will serve almost half of all cell phone customers in California, and 43% nationwide. Despite its size, AT&T is notorious for poor service, and customers consistently give it low satisfaction ratings.

In 2004, AT&T justified its takeover of Cingular with claims that service would improve, but the combined company continues to lag the industry in call quality and consumer approval. T-Mobile has been an innovative, low-cost alternative, providing options for customers that AT&T doesn’t, and its customer service record is top –notch. Rather than compete with T-Mobile, AT&T wants to swallow it whole.

“TURN executive director Mark Toney said the takeover would cement the AT&T/Verizon duopoly that has already enabled the two giants to raise rates in tandem. “Where will pressure to keep bills down come from?” Toney asked. “The bigger AT&T gets, the harder it is for smaller, local companies to get into the game.”

Toney said absent both competition and regulation, customers are at the mercy of AT&T.

“We’re quickly going back to the old monopoly that didn’t care because it didn’t have to,” he said.

TURN is recommending that the California Public Utilities Commission (CPUC) act to protect California consumers from ravenous AT&T by urging the Federal Communications Commission (FCC) reject the takeover. If it is approved, TURN is demanding that the CPUC:

  • Give customers of T-Mobile a “fresh look” option to switch to whatever company they chose with no penalties or early termination fees.
  • Insure that customer receive adequate notice of the upcoming merger and of the fresh look option.
  • Establish service quality standards for wireless companies.
  • Establish consumer protection standards for cell phone marketing
  • Establish uniform trial periods for all wireless companies operating in California.
  • Prevent job losses in California.
  • Recommend to the FCC that it explore consumer price protections as a condition of any approval.

“California is a huge source of profits for AT&T,” said Toney.“The CPUC should hold it accountable for its poor service and mistreatment of customers, rather than encouraging it to expand its stranglehold over California.”