My husband and I were vacationing in Mexico when a newspaper peddler cried out for us to read all about O.J. Simpson accused in the brutal murder of his ex-wife.
I marveled to myself at how Mexican tabloids must be even more outrageous than their U.S. counterparts. Then I got back to the states where every television at the airport was tuned into the chase of a white Bronco.
My initial thoughts were the same when told of a potential merger between AT&T and SBC Communications. It can’t be. It wouldn’t happen.
Industry analysts have been prognosticating for years that soon, there will be only four or five supercarriers: and the names AT&T, MCI, Sprint and some Bell combination are rattled off as probable survivors.
Well, this is it.
Yes, there will be regulatory hurdles. And there will be corporate hurdles and an AT&T-SBC marriage could never be. (Remember, TCI once thought Bell Atlantic was Ms. Right and MCI thought its entrance into the wireless arena would be at the hands of Nextel.)
But if the United States is going to be left with only a handful of supercarriers, the rest of the players are going to be consumed or left to fill niche needs. NextWave won’t provide personal communications service as NextWave when all is said and done. It will be part of British Telecommunications, for example.
My concern is that the next few years will be filled with giant companies trying to merge with giant companies and they will be able to show there is competition in the marketplace. Further, these mammoths will have evidence that consumers are seeing benefits from lower prices. This is certainly true in the wireless arena today. Cellular carriers dropped rates in response to PCS competition and PCS carriers are luring consumers onto their networks with price, first and foremost.
But today’s PCS customers aren’t getting a true picture. They are not paying for their carrier’s network buildoutand they certainly are not paying for the billions of dollars PCS carriers spent at auction to gain spectrum.
Just about the time the government approves these mega-mergers, Sprint will decide it is time to stop losing money from PCS and abolish its $11.50 per month plan and start charging a reasonable rate for service. And AT&T and the other supercarriers will follow. Consumers will finally have to pay for the buildout of these new wireless networks.
Regulators need to look at that point in time to decide if these proposed mega-mergers are in the public’s interest.
