Cell phones are central to our way of life. When leaving the house in the morning, we automatically grab our keys and cell phone.
Today, consumers can choose from four major nationwide cell phone carriers – AT&T, Verizon, T-Mobile, and Sprint – along with smaller regional carriers. In March, AT&T announced plans to purchase T-Mobile for $39 billion. By taking T-Mobile out of the market, the choice of national carriers will go from four to three, with two of the remaining three – AT&T and Verizon – in control of nearly 80 percent of the market.
As Chairman of the Senate Judiciary Antitrust Subcommittee I take very seriously the impact that this merger will have on consumers – the price they pay for cell phone service and the choices they have for service plans. And, if the playing field is dominated by only two large players, will the remarkable innovation we’ve seen over the past several years continue?
This week I convened an Antitrust Subcommittee hearing titled “The AT&T/T-Mobile Merger: Is Humpty Dumpty Being Put Back Together Again?” to examine the proposed merger and its impact on consumers.
It was an opportunity to question the CEO’s of AT&T and T-Mobile about why this merger is in the interest of consumers – to examine the benefits that AT&T claims will result and whether those outweigh the potential for diminished competition that could put consumers at risk for higher prices, fewer choices and less innovative phones.
We also heard from consumer advocates who worry that the absence of T-Mobile – which has often been a price leader undercutting the major carriers – will remove competitive pressure from AT&T and Verizon and lead to higher prices. Cellular South, representing rural carriers, voiced concerns about their ability to compete because they need to pay AT&T for access to its network when their customers “roam” outside their home area.
Our hearing demonstrated that the proposed merger between AT&T and T-Mobile raises serious concern about consumers and competition. No one wants to see cell phone prices increase or consumer choices decline, so you can be sure that I will continue to review this merger to determine whether it is in the consumer’s, and indeed our country’s, best interest.
U.S. Sen. Herb Kohl is a Wisconsin Democrat.
