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AT&T T-Mobile Deal May Need Revision

According to Bloomberg, Herb Kohl (D-WI) as well as Al Franken (D-MN) and Mike Lee (R-UT) voiced concerns over the merger, which could turn Sprint into an acquisition target and create a telecommunications duopoly. the acquisition would also eliminate competition among GSM carriers in the U.S.

During a hearing of a Senate Judiciary antitrust subcommittee, Kohl said that it was "undoubtable" that AT&T would have to meet government conditions if the deal is approved. AT&T Randall Stephenson said that he expects the government to require concessions, which the company is prepared to do - and "divest certain assets". He believes that it will take about one year until the Justice Department and the FCC will decide whether the merger can proceed or not.

Both AT&T and T-Mobile executives testified that a merger will benefit consumers with fewer dropped calls and faster Internet service. Kohl, however, raised concerns that prices may climb as a result of the merger. Interestingly enough, AT&T denied claims that it was acquiring a large competitor, especially since T-Mobile is the only other nationwide GSM carrier in the U.S. and it is widely believed that T-Mobile's low-price strategy has kept a cap on voice and data services for AT&T customers.

Democrat Al Franken said that he fears a "merger would take us one more step, just one step away, from the monopoly market that we had under Ma Bell.” John Cornyn (R-TX) said there is no "danger of doing that" as there was little innovation in the telecommunications industry in the early 1980s. Of course, we also know that the current innovation cycle is not especially due to AT&T, a company which told communities around the country just five years ago that they would not need higher DSL speeds than 1 Mbps.

The currently thriving innovation of mobile communication is largely driven by technology companies and if we are picky and look at limited data plans, it appears as if AT&T is blocking innovation and the availability of new data services already - even without T-Mobile.