AT&T Wants Ma Bell Back, but It's Not Happening... and That's a Good Thing

Poor, poor AT&T (T), frustrated at every turn. First, the Department of Justice put the kibosh on its burning desire to buy T-Mobile by filing an antitrust suit. So AT&T vowed to fight in court. Then the FCC piled on as well -- bad news since the company needs that agency's blessing. Finally, adding insult to injury, competitor Sprint (S) started crowing about the decision.

Can't a company get a break? Not this one and not this time. AT&T wants to use wireless to recreate the glory days of the telephone monopoly -- which, if you remember, was called AT&T. Fortunately, the government isn't in a sentimental mood, and that's good for consumers and the entire wireless industry.

Monopoly is good for you and me
AT&T's not happy? Let CEO Randall Stephenson howl at the moon. For all the company's elaborate PR and lobbying campaign that claimed the bulkier company would improve phone service, provide better prices, and create jobs, this has never been about something for the public, other than an atavistic screwing.

Stephenson and his crew have worked hard to create a sense of public acceptance of its interests, including using Astroturf groups to convince the press of actual public support and even pushing for support from non-profits such as GLAAD and the NAACP to which the company had historically donated.

Uh-oh, someone looked behind the curtain
Then the effort started to fall apart in public. Non-profits received heavy criticism over their support -- the term "sell out" got quite a workout. It turned out that the head of AT&T's charitable foundation also happened to be ... we're shocked, shocked ... its chief lobbyist.

GLAAD withdrew its support and its president resigned. And then a law firm mistakenly posted a letter that made AT&T's interests clear.

Can't a would-be monopolist get a break?
This deal was never about the reasons AT&T gave -- more jobs and better phone service. It was never about making it possible to upgrade to high speed wireless Internet service, either. The accidentally exposed letter showed that AT&T could upgrade its service for $3.8 billion, or less than 10 percent of the $39 billion it offered for T-Mobile.

No, this was a drive down memory lane to eliminate competition. And, as AT&T knows all too well, the less competition, the more a company can drive up prices. The less it has to invest in new services because, after all, where else are you going to go?

Even though the combined company wouldn't have held a monopoly market share, it and Verizon would have had two-thirds of all domestic customers -- the traditional trigger amount for antitrust concerns. Want to bet whether AT&T and Verizon would slowed investment and innovation? It wouldn't require collusion. Each would know that both would profit from such an approach.

The government finally wakes up
Recent administrations, including Obama's, have been slow to take on antitrust cases. That the Department of Justice finally weighed in as it did shows how extreme the telecom situation was getting.

The carriers have already effectively killed the idea of net neutrality by getting the FCC to agree that it shouldn't apply to wireless because it was a growing industry. Huh? According to industry group CTIA, there were 302.9 million wireless subscriber connections in the U.S. at the end of 2010. That's 96 percent market penetration in the country. How much more developed can you get?

Where wireless is developing is in data services, and the carriers don't like the idea of not being able to make more money from them. They also realize that there is a migration from wired landlines to wireless communications. Whoever owns wireless could, in effect, own the bulk of the communications industry. Again.

The DOJ and FCC had to do something. Otherwise, the country would head back to a time when consumers got what they were offered and paid what was demanded. That's not good for people, the industry, or business in general. Even if it would be a really sweet deal for AT&T.

Related:

• AT&T's Bid for T-Mobile Stopped Dead by Federal Antitrust Suit
• AT&T's Real Agenda for T-Mobile Becomes Public
• AT&T Continues Its Not-So-Stealth Campaign To Acquire T-Mobile
• AT&T Works the Refs to Gin Up Support for Its T-Mobile Deal
• AT&T T-Mobile Deal: No, Not a Reaction to the Verizon iPhone