The AT&T and T-Mobile Merger is Dead

Good news, everyone! Ma Bell has been defeated in its quest to restore its previous monopoly. The company has officially announced that it will no longer seek to buy T-mobile, opting instead to give T-Mobile the $3 billion on cash and $1 billion worth of spectrum for wasting their time. This decision was reached because of how hard the Department of Justice and the Federal Communication Commission fought against it.

AT&T is not happy with this turn of events. They claim that there is a very real shortage of spectrum, something that the T-Mobile purchase would have alleviated. In their own words, from the announcement:

“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.”

Though that FCC’s own novella-length report disagrees.

The Bandwidth Problem

Regardless of AT&T’s real motives, they were right about spectrum being a problem. At it stands, we have used most of the feasable spectrum available to us. While auctioning off the over-the-air TV channels has helped, mobile devices use lots of spectrum. AT&T could use more spectrum to improve its service.

But that likely wasn’t the main reason they wanted T-Mobile. They mostly wanted the company for its existing hardware infrastructure, which would have let them deploy 4G without any network changes. IT would have also made them the largest carrier by a lot, and given them enormous control over the industry.

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