AT&T withdraws T-Mobile takeover application from FCC | Hacker News Reader

AT&T withdraws T-Mobile takeover application from FCC

theverge.com

122 pointsbarredo34 comments

This is so awesome!!! I love it! My apologies to the community for little substance here, but having a choice between just AT&T & Verizon would be terrible for us consumers long-term. My sister's BF just got a T-Mobile phone and I was just explaining tonight how I hoped this would not go through.

Did you mean having a choice or not having a choice?

He meant only having a choice between those two big carriers.

Did you forget about Sprint? If AT&T and Verizon merged wouldn't you have Sprint to choose from?

Sprint doesn't give you a less expensive no contract deal if you bring your own phone that you bought at full price.

I am very happy to read this. I have been a T-Mobile customer (from the early days of VoiceStream) and they have never given me any problems.

In fact, they let me replace an eBay bought phone with a new Tmobile one just because I had the handset protection plan (from years ago).

This is a company that provides comparably good service to both Sprint and Att and charges 3/4 of the price.

For $50 a month I am getting the unlimited 3G/Talk/Text with them, which is unheard of for ATT. Happy with my Windows Phone 7 and Tmobile :)

Same here, I get full everything for an affordable rate, good signal and by far the free tethering is one of the things that I appreciate the most.

Honestly, the service I got from T-Mobile was beyond awesome when I was using a Blackberry. The stores had knowledgable people, the rates were very reasonable, and I never had a problem getting support from their 800-number when there was a problem.

I'm glad to see T-Mobile at least appear to stay independent for now. The USA is a very big country and letting one carrier dominate the GSM marketplace is just a terrible idea.

I wonder how T-Mobile will fare now that the sale seems all but off? The breakup fee and spectrum allotment should be a great opportunity for them to build their network, and aquire customers. Who knows? Maybe they'll use the spectrum to standardize their MMS protocall(which I believe to be a major reason they don't have the iPhone yet).

I do not believe there is an AWS-compatible version of the iPhone, which would be a more fundamental issue than MMS protocols.

Yeah, I switched to T-Mobile recently because it seems like they're the least evil of the big four by a fair margin. They even let you get around the subsidized phone lock-in thing by charging people without a contract less on their monthly bill.

This is a bit of a curious move. Why would AT&T voluntarily withdraw their application and possibly trigger the brake-up fee rather than waiting for the government's decision? The only explanation I can come up with is that they're going to re-file and withdrawing the application and re-filing will delay any decision (perhaps to a point where T-Mobile looks like it is declining and not providing competition or something).

Frankly, the $39B buy of T-Mobile was a deal seemingly too-good-to-be-true for T-Mobile. T-Mobile has struggled to put up customer additions in a market increasingly dominated by AT&T and Verizon. While T-Mobile has remained profitable, it's possible that they're starting down the path Sprint hit several years ago that left them unprofitable. T-Mobile was considering a merger with Sprint that probably would have left DT as a minority shareholder in an unprofitable, 3rd-place wireless carrier and then AT&T comes along and offers $39B. At the time of the offer, Sprint had a market-cap of about $13B, debt of about $14.5B and cash-on-hand of about $4B, valuing the business at about $23.5B. That makes the $39B offered for T-Mobile a lot more than a good purchase price for Sprint and Sprint is a larger wireless carrier.

With that said, it's genuinely possible that AT&T is stringing T-Mobile along. $39B is probably over T-Mobile's value (based on 2011 earnings, it would be about 44x earnings), but it might be worth it for AT&T to have nearly 140MHz in spectrum, plenty of new cell sites, and plenty of new customers. AT&T has a history of integrating purchased networks well (compared to, say, Sprint who still hasn't dealt with the two networks from its Nextel purchase). By contrast, getting a minority share in a new Sprint would probably be worth a lot less, might see the new carrier running four separate networks (CDMA/EV-DO, GSM/UMTS/HSPA, iDEN, and LTE), and might still see poor customer numbers and profits. It would also be an odd position to be in. Would the new Sprint sell CDMA as its flagship product or HSPA+? Would they try and maintain both networks for the next decade as they try to fit LTE in somewhere? AT&T's offer is that promise from a business partner that you're going to get a windfall if you just hang in there. "Yeah, we know we pulled the app from the FCC, but if you just hang in there and work with us, you'll get that windfall. C'mon, just a little longer."

While I don't like the prospect of having only three national wireless companies, I'm not sure T-Mobile staying is a lynchpin for competition. T-Mobile's customer numbers have gotten less rosy and the continued lack of an iPhone is only going to hurt them more. From my perspective, we need a cap on spectrum below 1GHz. Low-frequency spectrum travels significantly further in real-world conditions than high-frequency spectrum. For example, to cover 1,000sq mi can be done with one cell site with 700MHz spectrum. By contrast, at 1900MHz it would take 4 sites, and at 2.4GHz it would take 10. While cell networks need to split cells in urban areas as their customer base grows, low-frequency spectrum offers the broad coverage that customers demand as well as offering the ability to build out a network with decent coverage before one has many customers (somewhat solving the chicken and the egg problem of building a network).

Without low-frequency spectrum, new carriers face the daunting task of building considerably more cell sites when they don't even have customers yet. Likewise, limiting holdings below 1GHz would provide a guarantee of competition. If a carrier could only own 25MHz below 1GHz, we'd be guaranteed to have at least 4 carriers - and those carriers could be more genuinely competitive. Imagine if the 700MHz auction couldn't be participated in by Verizon or AT&T. T-Mobile might have picked up spectrum there, same for MetroPCS or Leap Wireless (or new entrants). We could have seen increased competition driven by ownership of spectrum that made rolling out a wireless network with decent coverage much easier.

> the continued lack of an iPhone is only going to hurt them more.

I noted that Apple is offering the unlocked 4S almost immediately this time, unlike the 4 where they waited half a year or a year before offering it. Hopefully this could be the beginning of the end of carrier-locked phones in the US.

Where I am, you could buy a locked iPhone with a carrier plan through the Apple Store for the 4 model, but for the 4S this simply disappeared, they now only sell unlocked phones. I'm guessing because the carrier subsidies are so small that it's not worth "polluting" the brand with it.

Few Americans are going to buy a $600+ phone up front and then pay an inflated monthly service charge that is based on you having to repay a phone subsidy.

T-Mobile doesn't charge the subsidized plan price if you don't buy a subsidized phone from them. Or at least they didn't as recently as a year ago. I pay $60/month instead of $80 because I bought my Nexus One from Google.

No one's going to use an unlocked iPhone with T-Mobile because it doesn't get 3G (due to non-standard frequency).

Or, over a million people will.

"Today, there are over a million T-Mobile customers using unlocked iPhones on our network," [T-Mobile USA Chief Marketing Office Cole] Brodman continued. "We are interested in offering all of our customers a no-compromise iPhone experience on our network."

http://www.informationweek.com/news/mobility/smart_phones/23...

Not to mention the lack of 3g data.

T Mobile doesn't work this way. They break out the subsidy of the phone and the data/voice plan as separate line items. I will pay off my brand new Galaxy S2 in 22 months, after which my phone plan will be $15 bucks cheaper a month.

Downvoted for misinformation[1]. I hate the subsidized phone system in the U.S., but at least T-Mobile is not like that. Let's try to spread the correct word and see if we can fix it. I'm a happy T-Mobile user after buying an unsubsidized Nexus S.

Edited to add: However, for the iPhone 4S specifically, you won't get 3G data, which is too bad. I'm thinking about getting the pentaband GSM Galaxy Nexus, though, which does get 3G (and even HSPA+, I think), on T-Mobile.

[1] http://explore.t-mobile.com/value-plans

Unfortunately, as I understand it, the 4S still doesn't handle T-Mobile US's rather unusual 3G frequency, so you're relegated to EDGE if you buy an unlocked 4S and use it with a T-Mobile SIM. Some people may put up with this, but I doubt it would make a noticeable dent in T-Mobile's numbers.

With that said, it's genuinely possible that AT&T is stringing T-Mobile along.

Would not discount this possibility. I've seen this play out first hand, a company is struggling in its market, a big competitor appears with an offer that sounds like it will save the day, then all kinds of delays crop up. Eventually the company goes bankrupt, all the while thinking/hoping that relief is just around the corner, and the big company buys up their assets in liquidation for a fraction of what the original acquisition would have cost.

This is a big deal for US mobile customers that travel internationally. While there has been some movement on the CDMA/GSM "world phone" front, having two native GSM carriers still makes a big difference.

Oh thank goodness. I'm a happy (and life long) T-Mobile customer, and I really didn't want to become an AT&T customer. T-Mobile has the best customer service of just about any company out there, and I feel that they really help to level the playing field a little here in the US, even if they are only a small segment of the market.

Would this have happened to ATT under a different administration?

Of course. You're not under the impression that Obama is more for the people than Bush was, are you? [1]

[1] http://www.huffingtonpost.com/2011/11/07/bank-earnings-obama...

"For the people" is frankly a bullshit metric. Different presidents can and will act differently even if they're both on the same "for the people" level. Even with a completely cynical view, they'll at least have a different set of lobbyists who they're loyal to.

But doesn't that make the initial "observation" nonsensical? What could be meant by "would this have gotten by in another administration" other than, "wow, we're so blessed to have these guys" yet it's just cherry picking (same as I did, but for the opposite point-of-view).

We (well, you) may very well be "blessed" to have that administration in terms of the choice of the FCC commissioners. That GP was making an overreaching observation is an unfounded assumption.

>>"wow, we're so blessed to have these guys"

Don't put words in my mouth. I asked a simple question.

What could your question possibly mean? My claim is that it's meaningless. Maybe this could or could not have happened with another administration. But bad things that happened with this administration could or could not have happened with another.

You know it is a ridiculous headline when the article refutes itself in the third paragraph:

But the discrepancy is in large part due to the $24.75 billion loss within the securities industry during the financial crisis of 2008 -- the last year of Bush's Presidency -- followed by a gain of $49.53 billion during the country's first year under Obama.

Impossible to know. FCC Chairman Genachowski is indeed a friend of the president, but this merger faced challenges on a several other fronts (e.g. the FTC and the DOJ).

Also consider that McDowell, the lead Republican on the FCC and a Bush appointee, didn't say much publicly about the merger and what he did say was less than a full throated endorsement.

It's also rather a bad time to approve a deal that--based on any half-way independent analysis--would have resulted in large numbers of layoffs. AT&T claiming otherwise was a total farce.

I think that the FCC under Michael Powell would've approved this with nary a second thought. His M.O. was paying lip service to the disruptive adaptive powers of free markets and modern technology when people accused him of unfairly granting natural monopolies. IIRC this happened when he exempted cable ISPs from common-carrier regulations.

Reply on news.ycombinator.com