The AT&T merger’s trust issues
Share Now on:
The AT&T merger’s trust issues
Adriene Hill: After months of back and forth AT&T has dumped its $39 billion deal to take over T-Mobile. They just couldn’t come up with a plan that made regulators happy.
Joining us now to explain why is Daniel Crane. He’s a law professor at the University of Michigan. Good morning.
Daniel Crane: Good morning.
Hill: What were the specific concerns that regulators had about this deal?
Crane: Well there were really two concerns. One is that on a national level, T-Mobile has been an innovator, it has been a firm that has led to price discounting in the market. And because of the merger, that kind of competition would cease.
Secondly, there was a concern on a market by market basis that the merger would lead to many customers only having a choice of two different carriers, and that kind of local market competition would be lost.
Hill: And what’s next now for AT&T?
Crane: AT&T will have pay a $4 billion breakup fee to terminate the merger, and is going to take that as a charge. It will continue to explore the possibility of expanding its wireless spectrum; it has a roaming deal with T-Mobile that will try to tap into some of the areas where T-Mobile has more spectrum than AT&T does.
Hill: Now when you say spectrum, what do you mean?
Crane: Spectrum means the wireles capacity to carry calls.
Hill: So fewer dropped calls?
Crane: Fewer dropped calls, right.
Hill: And what’s next for T-Mobile?
Crane: T-Mobile has made it clear that it doesn’t view itself as being able to survive in this market alone. It may now try to partner with a smaller carrier in the market.
Hill: Daniel Crane is a law professor at the University of Michigan. Thanks so much.
Crane: My pleasure.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
