The Wall Street Journal reported today that AT&T’s $39 billion bid to acquire T-Mobile is officially off the table. The deal was introduced earlier this year and became the subject of widespread public criticism from consumer and media justice advocates who argued that the already tiny telecom market couldn’t afford to get any smaller, particularly for users of color who are already prey to the industry’s shady practices.
If the deal had gone through, Verizon and AT&T would’ve owned 80 percent of the mobile phone market. That fact alone didn’t sit well with the Justice Department, which sued the company earlier this year for anti-trust violations. The Federal Communications Commission then publicly changed its attitude toward the deal, another move signaling that the deal was deeply unpopular.
AT&T wrote in a statement about its disappointment at having to call it quits on the merger, and argued that consumers would ultimately pay the price:
> The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry. It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled.
The company’s sad face undermines the fact that this is a huge deal in the industry’s history. It marks the first time in nearly three decades that the federal government – pushed heavily by consumer and media justice advocates – has publicly articulated that industry consolidation isn’t the only way to fix America’s connectivity problems. As I reported in my investigation, “How Big Telecom Used Smartphones to Create a New Digital Divide,” people of color are increasingly relying on their mobile phones as their primary way to access the Internet. And as they do so, they’re being dumped into a deregulated space in which phone companies can pretty much do as they please.
> …mobile wireless is quickly taking shape as a second Internet, one in which people of color and users with little income are entirely dependent upon cell phone companies for access. That Internet is unregulated. Companies are free to do as they please with customers–they can control what users see, do and say online. And as the country grows more dependent on high speed Internet, the handful of companies who own its mobile version are steadily working to consolidate their power. Whether and how policy makers allow that to happen may determine who gets a voice in our 21st century economy, and who’s left as its prey. >
The test now will be to see who gets a seat at the table to decide America’s digital future. Wonder why that’s important? Take a look.