Sunday, March 20, 2011

AT&T swallows T-Mobile. Again, getting big trumps all else in telecom

Eye-popping deal announced today in the telecom industry: AT&T says it's buying T-Mobile for $39 billion, as reported in Brier Dudley's Seattle Times blog.

Dudley correctly remarks this is a union of two companies who trace their roots to Seattle's own Craig McCaw, whose must-read (please!) biography, sadly, did not lead to a lucrative movie deal. (Memo to Harvey Wienstein: call me.)

So much of our media and public attention is captured by the dramatic stories in communications: the comeback of Steve Jobs and Apple, the stunning zero-to-goliath growth of Facebook, the emergence of Twitter and, lately, Groupon -- that we miss a continuing force in what deeply affects pricing, innovation and choice for consumers. For many of the players, the choice is to get bigger and swamp rivals who may have a better idea.

Underlying the AT&T-T-Mobile marriage of goliaths will be a host of details FCC approval, getting different technologies to work for customers, the nasty business of announcing that layoffs will be minimal before they become maximal. Now that Comcast has swallowed NBC Universal, we can reflect on the difficulties of getting real choice in the marketplace and the need for big players like Apple and others to serve shareholders by inducing customers to buy multiple products by limiting features in their individual product lines(iPhone tethering, iPad usb port to hard drive etc) so we have to buy more than we otherwise should. We can also ask successive presidents why our telecom choices are so limited and you can easily get much faster wireless systems in Asia and Europe when, never forget, the airwaves belong to the public and providers operate by license to use our air waves.

The final point is the sad apparent failure of Clearwire, yet another Craig McCaw brainchild, to succeed as a high speed wireless alternative for data and voice. Other remain who are pushing for wireless alternatives. Google has its plan for a giant test in some lucky city. But much as I admire Google's products and innovative culture, it's now another Goliath. My own preference would be for the FCC to put its thumb on the scale a bit so choice is favored and the U.S., inventor of cellular, moves to the edge of innovation. Yes, I want too much: lower prices and better service.

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