Since the announcement of AT&Ts $39 million plan to takeover T-Mobile, the U.S. Justice Department has filed an antitrust lawsuit against the company to stop a takeover that would spell trouble for future customers.
“Cuts in wages, benefits and jobs have become the new normal in America, so that when a company like AT&T takes action to bring back quality jobs, it’s big news,” said Larry Cohen, president of the Communications Workers of America union, in an article by the Los Angeles Times.
The company has announced that the merger with T-Mobile would generate over 5,000 jobs for the United States, after outsourcing has sent many jobs overseas.
AT&T has claimed that its network would be enhanced by T-Mobile’s network. However, the Justice Department countered its claim by saying that AT&T could enhance its network if they actually invested in it instead of eliminating the competition.
When weighed against each other the Deputy Attorney General, James Cole, also saw the merger as a death sentence to small wireless companies. Small companies, such as MetroPCS, benefit on local customer usage seeing as there are only the four national companies.
This competition generates lower prices for customers as each provider attempts to beat prices and cell phone plans. With a merge as big as AT&T is planning, this would lower the major providers down to three and give the company an unhealthy advantage in pricing plans.
After a period of time where the prices would be fairer with the combined company, there is the major concern of a jump in prices if it should become a major provider that overshadows its competition.
With only four major cell phone companies that are known throughout the United States, a merger would cut down healthy competition and eliminate the benefits that local carriers have.
Even though American jobs would be generated from the merger, the U.S. Justice Department does not believe the loss of choices and quality products as reason to allow the merger to continue as planned.
Instead of cheering on the takeover of T-Mobile, consumers should be worried that this will eventually lead to one giant phone company leading a pack of Americans by its cell phone chargers.