[1] http://techcrunch.com/2011/12/19/att-tmobile-merger-dead/
I'm not an economist, and I haven't looked into the details of the cell phone market in depth, but here's a possible alternative opinion. I'm not asserting that this is the case; just wondering if it might be.
Would T-Mobile be able to treat customers as well if they were more popular, or are they only in this position because their ratio of customers to cell towers, spectrum, and other capital is lower? And if the latter is true, isn't that an inefficient use of resources, which market forces (i.e. the merger) would have corrected if not for government intervention?
Take a look at T-Mobile's their most recent 10-Q filing. Their EPS is actually negative: http://edgar.sec.gov/Archives/edgar/data/1283699/00012836991...
If this had been structured as preferred equity rather than debt, then it would turn into dividends and move "below the line" on the income statement. T-Mobile USA would then magically be making a profit.
And of course, you're just looking at one quarter: Q2 2013. Q1 2013 was profitable. Q1 + Q2 was also profitable.
T-Mobile USA is not out of the woods yet. But they're in better shape than they were in 2011.
[1] - http://arstechnica.com/gadgets/2012/02/t-mobile-takes-3-bill...
in the end, you end up with a result like in politics. Whoever has more money wins the whole market.
The market pretty much exchanged short term benefits (cheaper console, better phone plans) for worse longer term problems (lame games because you have no choice, more expensive phone plans because you have no choice)
Your second point has some merit though: that once they gain significant market share in the U.S, T-mobile can become anti-customer. But T-mobile's prepaid plans and now this international texting gambit might force other carriers to follow suit before T-mobile gets to that significant market share. At that point T-mobile cannot afford to become anti-customer because other carriers would have started matching T-mobile's pro-customer offers in the meantime.
At least their competitors "get" more things better than them, so for the most part they're not even an option.
I didn't expect to see revisionism in here, let alone of such magnitude.
Without government intervention, there would be no AT&T, nor would there be alternate carriers. There would only be Ma Bell.
And don't bullshitting about Ma Bell's regulated monopoly, the regulation was put in place because Bell was already a monopoly by the time 1934 rolled around.
When these patents expired, there were soon 80 competing companies which captured 5% of the market, rising to over 3,000 companies with over 50% of the market by 1900.
AT&T then lobbied for its monopoly status back, saying the telephone "by the nature of its technology would operate most efficiently as a monopoly providing universal service."
Then during WW1, this monopoly was given "for reasons of national security". If you think that the monopoly came about by market forces then government came to save us, yes there is some revision needed.
> When these patents expired, there were soon 80 competing companies which captured 5% of the market, rising to over 3,000 companies with over 50% of the market by 1900.
And starting in 1907 and the return of Vail, Bell started massively buying them out, attracting the attention of the Justice Department and leading to the Kingsbury Commitment. Kingsbury was essentially repealed 8 years later by the Willis Graham Act, which more or less removed the Commitment's regulatory barriers for acquisition by AT&T, by shifting all oversight to the ICC's rubber-stamping.
> Then during WW1, this monopoly was given "for reasons of national security". If you think that the monopoly came about by market forces then government came to save us, yes there is some revision needed.
The monopoly was already there, Bell was temporarily nationalized during WW1.
> AT&T then lobbied for its monopoly status back, saying the telephone "by the nature of its technology would operate most efficiently as a monopoly providing universal service."
And this was given in 1921 by the Willis-Graham, which removed the regulatory hurdles put in place in 1913 when Bell was already a monopoly or near-monopoly.
That is some pretty serious misreading, Bell got big and stayed big regardless of government intervention, the government tried to keep control of it after being put before the fait accompli (before trying to break the company in '84, as you may have noticed that didn't quite work either)