Companies Aren’t People

It bears repeating, especially when we get handed obvious bullshit like this steaming load from T-Mobile’s CEO:

DT and AT&T believe the DOJ has failed to acknowledge the significant consumer benefits of this deal. DT remains convinced that bringing together these two world-class businesses would create significant benefits for customers and the country.

If companies are people this must be a good thing, because Deutsch Telekom (T-Mobile’s owner) executive people will get $25 billion in cash and 8% of AT&T! German company-people will get lots of money you guys. We’re told we should always support people/companies who get more money. Yet in this case, mobile phone users won’t get better service through limited competition.

T-Mobile competes with AT&T as a low price alternative in 97% of AT&T’s area. So this deal won’t expand market coverage, it will just expand one company’s dominance in the mostly rural areas where T-Mobile offers cheaper, more reliable service in. Sounds like a monopoly in those areas that will create worse service for consumers at higher (AT&T) prices, which is something anti-trust law was designed to prevent. So if the merger is going to create a better product, a couple questions:

  • How will the two companies with the lowest customer satisfaction in the market create high customer satisfaction?
  • How will T-Mobile’s reception improve if the system of its proposed parent company has twice the dropped call rate, a rate that has only risen in the the past year?

But the important part from the position of the Department of Justice is that this merger pays off T-Mobile to not upgrade its networks, like AT&T was forced to do with T-Mobile’s recent upgrade to HSPA+. T-Mobile’s consumers won’t get a better service, they’ll get a worse system and higher rates (AT&T’s rates). This merger would force consumers to one alternative they clearly don’t want. If they really wanted the iPhone or AT&T’s service, they would have switched to AT&T already. They operate in the same areas.

That’s consumer choice through competition, which benefits consumers (actual people). It’s more important than shareholder capitalism, which in this case, would only benefit the people in the boardrooms of AT&T and T-Mobile.

(Though one wonders what will happen if DT decides to quit North America altogether.)

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