THIS MERGER WILL DECREASE THE AFFORDABILITY OF MOBILE SERVICE
T-Mobile plans are more affordable than comparable plans of other carriers. Cost is a major barrier to accessing services.
The poverty rate reached a 15-year high in 2009, with 13.4% of the population living in poverty (below$22,050 per year for a family of four). This rate is even higher in communities of color, with 21.9% of Latin@s and 25.1%of blacks living below the poverty line.
Between 2001 and 2007, the amount consumers spent on telephone service increased each year. In just sixyears, the average amount consumers spent on these services went up by nearly $200.
T-Mobile plans cost $15 to $50 less per month than comparable plans from AT&T. If the merger goes through, newsubscribers will no longer have T-Mobile as a lower-cost option—which would both restrict access and allow AT&Tand all other providers to raise rates more easily.
Even current T-Mobile subscribers who migrate to AT&T plans should expect a signiﬁcant price increase.
While AT&T has suggested that T-Mobile customers can keep their current rates as long as they stick with “comparable”devices, AT&T has not explained just how this supposed commitment will work—especially if current T-Mobilecustomers want to or are forced to upgrade their phones.
That means roughly 15.9 million people of color who are T-Mobile customers can expect to see a price increasefor their mobile phone service if this merger is approved.
THIS MERGER WILL REDUCE CHOICES FOR MOBILE VOICE AND INTERNET ACCESS
A horizontal merger—between AT&T, the second-largest mobile phone service provider in the U.S., and T-Mobile, thefourth-largest—would create a consolidated mobile phone market, with little to no meaningful competition.
There is already a lack of competition in the wireless market, and consumer choice is limited by lengthyservice contracts and high early-termination fees that make it difﬁcult to switch to a new service provider.
If the merger is approved, mobile phone users who want nationwide service or a good phone will be forced toselect from one of only three providers: AT&T, Verizon, or Sprint.
Even worse, AT&T and Verizon will control nearly 80% of the market. Neither Sprint nor other small carriers will beable to compete with AT&T or Verizon.
4 U.S. Census Bureau, 2010, Selected Characteristics of People at Speci
ed Levels of Poverty in the Past 12 Months. Retrieved June 14,2011, from U.S. Census Bureau: http://fact
nder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-qr_name=ACS_2009_5YR_G00_S1703&-ds_name=ACS_2009_5YR_G00_5 Bureau of Labor Statistics, January 14, 2009, Consumer Expenditure Survey. Retrieved June 14, 2011, from United States Department of Labor: http://www.bls.gov/cex/cellphones2007.htm6 Blyskal, J., April 8, 2011, CR Analysis: T-Mobile Is Cheaper than AT&T. Retrieved June 7, 2011, from Consumer Reports: http://news.consumerreports.org/electronics/2011/04/cr-analysis-t-mobile-is-cheaper-than-att.html7 T-Mobile USA, February 25, 2011, T-Mobile USA Reports Fourth Quarter 2010 Results. Retrieved June 13, 2011, from T-Mobile:http://s.tmocache.com/Cms/Files/Published/0000BDF20016F5DD010312E2BDE4AE9B/5657114502E70FF3012B5A79D454F2C8/
le/TMUSQ42010PressReleaseFinalv2.pdf; Rocha, J.,2010, Mobile and Social in Hispanic America 2010. Retrieved June 7, 2011, from SlideShare: http://www.slideshare.net/jerryrocha/hispanic-mobile-and-social-networking-for-ad-tech-11410
AT&T AND T-MOBILE MERGER: A BAD DEAL FOR COMMUNITIES OF COLOR AND THE POOR