Showing posts with label cell phones. Show all posts
Showing posts with label cell phones. Show all posts

Tuesday, September 20, 2011

AT&T and the Big Three of Phone Service

I am sure that by now everyone has heard of AT&T's proposed purchase of T-Mobile. Well this is not going down as smoothly as AT&T would have hoped. This is an enormous deal with many implications on the cell-phone service market. If this deal were to go through, AT&T would become the nation's largest service provider, and the three biggest service providers (AT&T, Verizon, and Sprint) would control 90% of the market (sounds like an oligopoly to me).
This is screaming out to the Justice Department because it may give AT&T too much control over other service providers. It would also hurt the consumer because the big three would have much more control over prices (since it is an oligopoly) and it would be safe to assume that they are not going to lower prices. For these reasons the Justice Department is going to look very closely at this deal to make sure it does not hurt the consumer too much. There is absolutely no way that the government will allow this to happen, and I agree completely. There is no way that AT&T's proposed deal will not end up hurting the consumers; AT&T and the other members of the oligopoly would have too much control over prices. Are there any ways this deal could benefit the consumer?