Announcer: Welcome back to The David Pakman Show.
David: Welcome back to the show. If you're looking for a really simple way to help out
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of Louis's metal band hijinks, I can guarantee you that.
The AT&T/T-Mobile merger. This was kind of a big topic, I was at that National Conference
for Media Reform over the weekend, and a lot of the discussion about wireless and the AT&T/T-Mobile
merger, there is so much wrong with this merger, and it is really not being discussed almost
at all, that I don't even know where to begin, Louis. I really don't. And we're at the point
now where again, like the Comcast/NBC, it's now left to federal regulators at the Department
of Justice and the FCC to decide what is really best for Americans when it comes to this merger?
And you know what? Regardless of anti-trust, regardless of the legal side, I want to focus
on what is best for Americans, and I will tell you right now, it is not for this merger
to go through.
Louis: Wasn't T-Mobile doing poorly?
David: I don't know if they were doing poorly or not. I mean, I know that they... a lot
of people have moved away from T-Mobile and opted for the Big Two, which I believe are
AT&T and Verizon.
Louis: Right.
David: And I'll just go through this list. I mean, number one, if you believe there should
be competition in the wireless market, which is a market that is increasingly important
given the preponderance of wireless devices, additional ways to access the internet wirelessly,
that is an area where we need competition, unless you're happy with what's going on with
cable TV. If that suits you, then by all means, Louis, you should be in favor of this merger,
if you like the way that we shop for cable television. Now, I don't know about you, Louis,
but to me, it doesn't work for me.
Louis: Cable TV? No. Which I don't have.
David: Right. Well, that's... we're opening up a can of worms there, to talk about Louis's
buying habits. This merger would erode competition, which, by the way, barely exists in the wireless
market, even more. It would make it so that AT&T and Verizon, two companies, would control
almost 80% of the entire American wireless market. And for those who say well, just because
a company could abuse power with that much market share, two companies could, that doesn't
mean they would. Actually, AT&T's already known for dong that.
And this is unthinkable in so many industries, 80%, two companies controlling 80% of the
market? And that's in the interests of the American people? Imagine if ExxonMobil, imagine
if ExxonMobil were to merge with BP, Shell, Chevron-Texaco, and Citgo. That would make
ExxonMobil about the same size as AT&T would be in terms of market share with this deal.
Who in their right mind, even given the subsidies and sweetheart deals that oil companies get,
would be OK with ExxonMobil merging with BP, Shell, Chevron-Texaco, and Citgo? Come on,
ladies and gentlemen. This is not in your interests. Who would-- in the oil industry,
one of the most corrupt industries, people still wouldn't allow it, would they?
Louis: Who? Who wouldn't allow it?
David: In other words, regulators and those making the decision about being in the interests
of the public or not, they would know for sure it's not in the interests of the public
to have a merger of that scale.
Louis: Doesn't mean they wouldn't allow it.
David: Well, no. I actually believe that they wouldn't. As corrupt as things are, I actually
believe that would not happen. It would just... it would not happen.
The merger will result in higher prices and less choices. AT&T and Verizon currently control
about two-thirds of the market. They have a long history of raising prices together,
in concert, as they did last year by requiring all customers on feature phones to add data
plans. I thought jobs were a concern; this will not create a single job, Louis. This
merger will kill tens of thousands of U.S. jobs. And we're wondering is it in the interests
of the American people? When was the last time a merger actually created jobs for Americans,
by the way, period? That's question number one.
And then we have to say well, what about this specific merger? Executives are going to--
they're saying they're going to save $40 billion through what they're calling "merger synergies".
What does that mean, Louis, synergies? Well, it means many of the T-Mobile jobs at retail
stores, those'll be gone. T-Mobile jobs at call centers, those'll be gone. For everybody
who called the Obama health care bill a "job killer", I'm hearing crickets on this one.
I'm hearing nothing.
And also, I know it's probably not as big of a deal, but this is also not going to help
innovation. AT&T has a history of making handset manufacturers cripple features like Wi-Fi
so that people can't use, for example, Google Voice, instead they have to use minutes. For
a while, the iPhone was doing it with Skype. We know that that's going to continue the
more market share they have.
And it is a merger... the merger is a threat to free speech and to openness on the wireless
web, something which we know, Louis, these companies and their lobbyists have a huge
influence on.
Louis: All right. Now, if T-Mobile is doing as poorly as I thought they were...
David: I don't know for sure how they're doing, so I don't know that we want to premise any
discussion on that, but please, go ahead.
Louis: I mean, if the company's going to fail, let's just say that's the outlook...
David: Yeah. I don't think it is going to fail.
Louis: What difference would it make if they were? I mean, if this is to... if that were
the case, this would be saving jobs.
David: No. Well, you're saying if the company were... if we knew for sure the company was
destined to fail altogether and all of the jobs were going to be lost, then wouldn't
this be a positive thing?
Louis: Right.
David: Why on Earth would AT&T be buying a company that was destined to fail completely
and go completely out of business?
Louis: Why wouldn't they? They'd be expanding their horizons. Suddenly every T-Mobile user
is an AT&T user.
David: If the business model were completely unviable, we would not be having this discussion,
I am sure of it, Louis. AT&T is not going to make deals to save companies out of the
goodness of their heart.
Louis: No, it's an expansion. It's an expansion of AT&T.
David: They need... it's more complicated than that. They need the capacity, they need
to... there's a lot of expenses still that would need to be... if this was not really
what I am describing here, I think that we would be seeing it handled in a much different
way. We wouldn't be seeing this handled in the well, is it OK for these companies to
take so much market share by merging, it would be a different discussion. Believe me, if
this was to save the jobs of T-Mobile, the conversation would be completely different.
The story-- the media story would be different. Hey, there might even be a media story. Go
figure.
Louis: Well, true, it's not like T-Mobile has filed for bankruptcy, but we don't know
what their outlook was.
David: No, we don't know, but they were a viable business, there's no indication that
we need to be going under the assumption that AT&T is doing this out of the goodness of
their hearts. There's just...
Louis: No.
David: It's like saying well, I don't know for sure...
Louis: Either way, it's in their best interest.
David: In AT&T's?
Louis: Right.
David: They're either taking out a competitor... oh, OK. Louis, this is... we're getting into
the weeds, here. We're getting into hypotheticals that have no bearing on reality.
Louis: No bearing on reality?
David: That we know of. In other words, there's no reason to think that that was going to
be the case. My five points stand true, that's where I'll leave it. And everybody should
do the same.
Louis: Bet it's unhealthy.
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