Not a good comparison.
The facts are competition is good for the consumer.
If there were none do you think there is any reason for AT&T to be competitive in pricing and service?
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U.S. Government Moving to Block AT&T's Acquisition of T-Mobile
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Not a good comparison.
The facts are competition is good for the consumer.
If there were none do you think there is any reason for AT&T to be competitive in pricing and service?
Keynes was wrong. Look who got out of the crisis best: Germany. One of the most regulated "free economies" even though they are heavily production oriented and have to compete with South Asia and China. If you do not regulate, you will get a country run by oligarchy and lobbyists... wait, that is the USA, right? I lived in both systems, there is a difference. Just look at Health Care: The lobbyists in the US butchered the idea to the point that it does not provide what it needs to provide. The German system works with minor flaws since 1873 - survived several regime changes and two world wars. Health insurances are usually non-profit and everyone gets the needed care.
If you say "Monopolies crumble eventually," that might be true but I don't want to wait 50 years and overpay just because lobbyists in Washington make sure that only 3 big companies cover 90% of the market and get their pockets full. I'd rather have a political system so sensitive to public opinion that the government fears the man on the street and makes sure he is happy. In the USA, the government fears the campaign donators' wrath instead and in states like Oklahoma, there is not even a campaign because they don't have enough seats in the Electoral College.
No, if you actually followed the past M&A cases you'll see that DOJ or FTC negotiates by threatening to block the merger. They don't block the merger and then start negotiating. Of course, it is possible this pattern has suddenly changed, but I'd say fairly unlikely. Now, the courts can refuse to block the merger, but courts are not part of the executive branch.
Do you really believe that sans government regulation there wouldn't be any competition? Do you really believe that the government CREATES competition? All I ever see it do is kill competition - http://joelj.me/9lOk
Governments usually only intervene in markets when the market fails to provide competition that works for the general public.
If there was true competition in the US Cellular Market this thread simply wouldn't exist.
Therein lies the problem!! By the mere fact that government DOES have regulatory control over business automatically makes them prey to contributors and lobbyists. You take away that regulatory control and you subsequently remove the predators - donations and lobbyists have no power over industry! Tada!
ATT infecting T-mobile
Soon after the merger was proposed, T-mobile started losing my payments and charging things to the wrong credit card. They also changed their customer service system so that you NEED to be calling from a t-mobile phone or they basically hang up on you.
It looks to me like they were well on their way to "integrating" into the new ATT experience. I and quite pleased that they may remain independent after all.
Soon after the merger was proposed, T-mobile started losing my payments and charging things to the wrong credit card. They also changed their customer service system so that you NEED to be calling from a t-mobile phone or they basically hang up on you.
It looks to me like they were well on their way to "integrating" into the new ATT experience. I and quite pleased that they may remain independent after all.
Government action sometimes reduces competition, but claiming that it "always" kills competition is far fetched.
In any case, the argument is about this merger. There is a very limited amount of wireless spectrum and a very large barrier to entry due to high cost of equipment. If this merger goes through, it is possible AT&T will jack up the prices so much for so long that in the long run some other competitors will get into the market. However, in the long run we are dead. I don't see how anybody can argue this merger will not limit competition and it would take a good part of a decade before a new nationwide network could be formed.
I never said that.
Government's role is to protect the people, that includes the rich and the poor.
Unfortunately the current situation is a result of too many lobbyists influencing the politicians. Do you really think the AT&T T-Mobile merger would benefit the people as a whole?
Capitalism may start off with good intentions but in the end it corrupts and becomes evil.
Sure, but free markets function well only if there is a free market. One of the basic requirements for a free market is competition. Markets fail from time to time. Even though in the long run market may correct itself and new competitors may emerge, consumers (and voters) are usually not willing to wait that long.
Seriously? You compare that to the OIL MARKET? Every country which has oil is automatically a competitor and therefore, yes, there is no monopoly from the production side because as long as you can buy a pump and find a buyer, you are on the market if you have oil underneath you. But even more - there IS an Oil monopoly. It is the OPEC and their strife with one another lead to several wars, even the second Gulf War (the first one the USA were fighting in.... remember Kuwait?) which happened because an Emirate was selling more oil that the OPEC wanted them to and they destroyed the oil price and their quasi parent country (they belonged to Iraq until 1920) tried to put an end to it be annexing it because it caused almost a bankruptcy and was warned several times. - Long story short: Your comparison isn't working.
It is possible for AT&T to raise their prices, and then hemorrhage their customer base to Verizon, Sprint, Alltel, Cricket, whoever and completely destroy themselves on account of it. It's in AT&T's best interest to make money and retain customers. If customers are leaving then they're not making money. Your statement sounds as if it's the only service provider out there. Nobody forces you to have a cell phone or use AT&T. It's not a right. Government has a job to protect the rights of the citizens. NOTHING in commerce is a right therefore government has no reason to be in business forcing commerce to act one way or the other.
Totally agree. Monopolies are the opposite of free markets.
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They don't have to raise it - they just provide less service for the same buck and others will follow. Look at the history of data plans. It didn't really hurt them to start with only limited plans.
I'll leave my final thought on regulation and monopolies to Milton Friedman, Nobel Prize winning economist. Regulation leads to Monopolies - http://joelj.me/9lSH
Who even uses T-Mobile? Even in their own ad, they have no users
I use T-Mobile.
Your comment is invalid.
I don't see how DOJ blocking this is bad, this is great news for the consumers and as long as there is competition, consumers won't have to abide by preposterous phone bills.
Anyone who doesn't like the blocking just doesn't understand what would REALLY happen if ATT and t mobile merged.
Enjoy your T-Mobile service while it lasts.
DT already said they want to kill off T-Mobile USA.
They have been losing money and customers for years now.
DT already cut over 2,600 T-Mobile USA jobs with no plans to hire any new staff.
Remember... DT is a for-profit company. You can't operate at a loss indefinitely.
http://www.bloomberg.com/news/2011-...ofit-falls-on-t-mobile-usa-client-losses.html
http://seattletimes.nwsource.com/html/localnews/2015814810_apustmobileusasubscribers.html
Nearly 50% decline in revenue from last year.... they're losing money.
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"If you do not regulate, you will get a country run by oligarchy and lobbyists... wait, that is the USA, right?"
But in this instance the USA isn't practicing a free market economy. The only reason there are lobbyists in Washington is because businesses know how much power the government has over trade. If the government didn't have the ability to regulate, then the lobbyists wouldn't be going to them for an advantage over others in their business ventures. Because they don't have the power.
And as far as fear of Oligarchy, any government system built upon even partial-democracy (the republic of the untied states) will eventually transform themselves into an oligarchy (The US used to have their health care divided up by who can afford it, but now its available based on urgency and need unless you go through a private health care provider, and one of the main reasons it is not working is because their is not enough health care (product) to go around, nor enough money to provide decent services. Hence, it used to be controlled by the wealthy when it was free business-wise, and now is socialized by the government, and they have to determine who is "worthy" of treatment. We are encountering the same issues that Germany has, or even a better rated system such as France. If I remember correctly, all EU countries are encountering rising co-payments and are struggling to find a way to actually keep the system balanced. Also, how much higher are taxes in socialized countries??! The US still doesn't compare to that, even with the health care reform).
But this can happen, again, only if the government has control over the economic system. Wealth can only give power if that wealth can buy that power. But if the government has no power to levy the market, then it will not even be apart of the equation. That wealth will have to find private means of buying power, which takes much longer and is much more difficult. Even in this instance, total acquisition of power isn't likely, or sustainable for a long period of time.
Why are you giving examples of the issues the US is having if its not even practicing a free market? How about you look at China and the way their economy has exploded in the past ten years and then tell me what is economic system is best to promote growth in this world-wide depression?
I'll start by saying that this isn't my true response, as I'll admit I do not know enough about the Oil industries history to make an informed response. So I'll do the research, and then post a proper reply.
The two issues I see with your response now, however, is that the OPEC is not a global monopoly, or at least, it does not have to be as much as it is today. 80% of the USA oil expenditure is through it military system. Now if we cut those wasteful uses then with the oil to be found in Alaska alone we can be self sustained. Second, there was government military involvement. Bankruptcy may have been the short term result if they hadn't involved themselves, but the market would reset itself after and they would have to find a new resource for export, or become an industrial country, like other nations with no strong natural resources beneath them. Of course oil dependent nations are going to protect their monopolies, just like any company would, but the main points I'm making is that, 1) it is not sustainable, and 2) if the government hadn't gotten involved perhaps we would have found a more economically and environmentally sustainable fuel by now. Progress in a free market is about letting failure happen, and then starting over. You may not be willing to do this, but by choosing regulation there are other costs.
Maybe, but do you understand all the ramifications of the deal not happening ? Your comments work both ways.
Sounds like you read a book. This is not "too much regulation", just preventative measures to make sure ATT doesn't have a $150 iPhone plan with 100 MB of data because they bought out t mobile and then sprint and then got together with Verizon to price-fix (as they basically do now). Extremists on both ends of the spectrum (regulation or lack thereof) are ridiculous and obviously haven't thought out the consequences of their extremism.
There is already a lack of competition in mobile. This is illustrated by ATT's recent "unlimited texting" fiasco. They know people are going to downgrade their plans, so they lock them into unlimited if they feel like sending a hundred texts a week. Then they defend it saying their customers want it. They lie. Flat out lie, and that makes me feel no empathy for them. Price how you want to price but don't lie about it. I am on ATT, but I'm gone ASAP. I want sprint or t mobile to offer better plans to force the two big dogs to examine their own ridiculous gouging and price matching (fixing).
If any of you think this merger will create more jobs, dream on. The merger will create redundant positions within this behemoth and ATT will slash thousands of jobs, but of course give us all some smoke and mirrors and lies to make it seem like they didn't.
Can't ever figure out our government.
It is ok for a largely foreigned owned company (Verizon Wireless) to acquire Alltel and become the largest US carrier...
but when two American companies try to combine the US government tries to block this.
In the end, the deal will be done. This is about what concessions the US government can get from AT&T/T-Mobile. Look at the last paragraph of their statement. The government is open to discussions about how to make the deal work. This was only announced today to offset AT&T's announcement earlier in the day to say they would bring 5,000 T-Mobile call center jobs in India back to the US once the deal is done. It is all about negotiating power.
It is ok for a largely foreigned owned company (Verizon Wireless) to acquire Alltel and become the largest US carrier...
but when two American companies try to combine the US government tries to block this.
In the end, the deal will be done. This is about what concessions the US government can get from AT&T/T-Mobile. Look at the last paragraph of their statement. The government is open to discussions about how to make the deal work. This was only announced today to offset AT&T's announcement earlier in the day to say they would bring 5,000 T-Mobile call center jobs in India back to the US once the deal is done. It is all about negotiating power.