AT&T has done an incredible job of getting special interest group after group to endorse its merger with T-Mobile, saying it will provide better broadband access for minorities, rural subscribers and just about any group of people you can think of. The broader gay community too has endorsed the merger - apparently transgender-Americans have been hoping
for the day when there was one less GSM provider to choose from.
Here is how the system works - AT&T has hundreds of thousands of workers and inevitably large numbers of them in myriad groups. This in turn coupled with large contributions to various organizations and associations is rewarded with the reciprocal endorsing of anything AT&T requests.
To help grease the wheels even further, AT&T has further upped
its lobbying budget by 58% according to PC Magazine.
AT&T is doing the smart thing by getting rid of its sole GSM provider allowing it better negotiating leverage in its roaming agreements with foreign carriers and gaining the ability to raise rates with one less major competitor to depress market pricing. It will also gain more leverage when negotiating with hardware and software companies.
An anti-merger video by the Free Press Action Fund
If the US government blocks the deal it will be because the remaining major companies AT&T and Verizon
will have so much share that they are effectively a duopoly at about 80% - allowing them to raise prices at will.
Again, if you are an AT&T or Verizon shareholder, you likely want this merger to happen and AT&T is serving its short-term shareholders well by seeking this transaction.
But the challenge I see is that with one less major telecom carrier in the US it becomes that much more difficult for innovative start-ups to launch, get funding and hold their breath long enough for a carrier to buy from them.