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On Call: What we'd really lose in an AT&T-T-Mobile merger

By now I'm sure that you're familiar with the arguments against the proposed AT&T-T-Mobile merger . As critics see it, the deal will put too much power in the hands of one carrier (and one GSM carrier, at that), it will reduce customer choice and innovation, and it will lead to higher prices and poorer customer service.

Those all are valid points, but I'm more worried about something that hasn't received a lot of attention. If this merger goes through, I fear that T-Mobile's gutsy approach to expanding its smartphone lineup will be killed by AT&T's stodgier culture. Indeed, over the last year, T-Mobile has greatly outshone its potential partner in both the range and quality of such handsets. AT&T produced slightly more smartphones during that period (21 versus 19), but T-Mobile has taken more risks and its lineup has earned a higher average score from CNET editors (7.7 versus 7.2). I don't really know where the carrier gets its aggressive spirit, but customers will lose if it disappears.

Keep it coming
I'm not saying AT&T has a poor smartphone lineup. In fact, the carrier offers a lot to like. But when compared with T-Mobile, its lineup over the last year is less innovative, offers less choice, and is, frankly, much safer. Yes, it has the iPhone, but Apple's device is just one handset in a crowded field. It doesn't automatically trump every other smartphone on the market and there are many people who won't even consider it. For those people and everyone else, T-Mobile is doing a better job. I don't know where T-Mobile gets its focus, but it's made the carrier a smartphone leader. And if the merger goes through, I'm concerned we'll see its position disappear.

Kent German is a section editor for mobile device reviews at CNET. When he's not testing the newest handsets on the market, he's blogging about wireless news, appearing on the Dialed In podcast and watching planes land at the airport (yes, really). In his On Call column, he answers reader questions and gives his take on the rapidly changing mobile industry.

Whether it's for just making calls or for cramming your entire life into one device, the ubiquitous cell phone continues to evolve. Each Wednesday cell phone editors Kent German, Bonnie Cha, Nicole Lee, and Jessica Dolcourt meet to discuss the latest cell phone news and answer your questions. Join us to find out what's in, what's out, and what's coming next.

California's Consumer Watchdog Blasts AT&T/T-Mobile Merger: More ...

Dear Chairman Genachowski, Attorney General Holder and Commissioner Sandoval:

We write to urge you to reject AT&T Inc.’s proposed purchase of T-Mobile because it will without question lead to higher prices for consumers.

This is not conjecture; it is the lesson of history. Seven years ago, AT&T Inc.’s wholly owned subsidiary, AT&T Mobility LLC (then known as Cingular Wireless Corporation) requested permission to buy AT&T’s wireless network (then known as AT&T Wireless Services, Inc.) for $41 billion. At that time, AT&T and Cingular had the first and second largest share, respectively, of wireless communications providers in the U.S.

In order to get the merger approved, AT&T and an army of executives, lobbyists and allies assured regulators and consumers that the deal was in the public interest by making promises — the very same promises that we’re hearing from AT&T today:

What happened after the AT&T – Cingular merger? Once the Federal Communications Commission approved the deal (after negligible scrutiny), the newly merged company – which later renamed itself AT&T Mobility LLC– betrayed its promises. It abandoned the old AT&T network, deliberately degrading the network so that AT&T customers would be forced to migrate to Cingular’s own network, pay an upgrade fee of $18, buy new phones and agree to new and more expensive rate plans. These anti-consumer moves were enforced by an anti-competitive “early termination fee” of anywhere between $175 and $400, which prevented customers of AT&T from moving to another carrier.

In short, AT&T policyholders were railroaded into spending hundreds of dollars more in order to maintain their cellular service – a colossal rip-off by the same corporate executives who are now asking for permission to do it all over again.

Nothing in the terms of the proposed merger bars AT&T from engaging in a repeat performance against helpless T-Mobile customers if this deal is approved. Indeed, even as the companies mount a massive public relations campaign to win your approval, T-Mobile executives are already implicitly acknowledging that once the merger is approved, AT&T will make changes in the T-Mobile network:

T-Mobile has no plans to alter our 3G / 4G network in any way that would make your device obsolete. The deal is expected to close in approximately 12 months. After that, decisions about the network will be AT&T’s to make.

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