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I'm trying to understand why comments on Hacker News and Reddit are so uniformly against this merger. Is it because T-mobile has better customer service than A

by beefman 15y ago

I'm trying to understand why comments on Hacker News and Reddit are so uniformly against this merger. Is it because T-mobile has better customer service than AT&T (and most other carriers), and people are upset this will probably be lost? When T-mobile came to the US, I was under the (perhaps incorrect) impression that they licensed their towers from AT&T (then Cingular). But my impression is that they, by now, have their own towers which will extend AT&T's network. Surely folks realize that mergers are badly needed in the wireless industry - that they are the solution to many of most onerous problems with wireless service today - and that artificially dividing infrastructure, as the FCC did, is tremendously wasteful.

elehack 15y ago
In part: because the U.S. cell ecosystem has severe problems, and eliminating an independent competitor (particularly on GSM) sets us back rather than moving us towards an affordable, sane wireless economy.
- beefman 15y ago
  I think you have it backwards. What would happen if car companies also owned the roads, and each brand of car could only be driven on the corresponding roads?
  - wanorris 15y ago
    There are obvious disanalogies, but if the options are between several competing companies with their own roads and cars, and having only one or two companies that collectively control all the roads and all the cars, the former is still better. At the moment, those are the options on the table -- throwing our mobile infrtastructure out and starting over with a clean slate is not something practically achievable.
    - beefman 15y ago
      > if the options are between several competing companies with their own roads and cars, and having only one or two companies that collectively control all the roads and all the cars, the former is still better No, it isn't. It's why infrastructure is usually owned by government, or given protected monopoly status. Where infrastructure is defined as anything too expensive to build redundantly (starting with the military and its natural monopoly, which we call government). Your wireless coverage is not affordable because you are paying to build 75% of each of three redundant mobile phone networks. Independent networks would never exist in a free market - only the FCC licensing process brought them about. And despite that, the vacuum is so strong it produced several mergers so far (Cingular + ATT, Sprint + Nextel, and of course, the remerger of the bells into Verizon and SBC/ATT).
      - MatthewPhillips 15y ago
        I'm not following your logic. I see your point that AT&T can absorb T-Mobile's existing infrastructure and thus provide wider coverage to their customers. What I don't follow is how a single provider will result in said provider putting more resources into infrastructure enhancement and lower prices. Please explain how.
        beefman 15y ago
        The problem is, as an AT&T customer (a company I loathe BTW... in another tab I'm about to pay a $450 bill from them) I cannot use a Verizon tower. (There has been limited benefit to pursuing both the CDMA and GSM technology paths towards a wireless broadband network.) I assume I can't use a T-mobile tower either (there ought to be a Coase equilibrium between GSM carriers, but it would involve billing costs that a true merger could avoid). Thus, I have to pay AT&T, and you T-mobile, for coverage in the same area. Now, coverage in some highly-populated areas is bandwidth-limited. In other words, there are often enough customers of each carrier in a place to saturate the corresponding antennas. But any time the T-mobile antenna is not saturated and the AT&T antenna is over capacity, there is waste. This waste shows up on both our bills (forgive me for assuming you're a T-mobile customer for the sake of argument). Obviously, competition is a good thing, but its benefits are easily overwhelmed by infrastructure costs. Electric utilities generally operate very efficiently with government-sanctioned monopolies (and subsidies). The trading requirements enacted in the late '90s to promote "competition" on the grid are widely considered to have failed to improve utility service, and are implicated in things like the 2001 California energy crisis. Since colonial times, the Crown granted molopolies for expensive things like colonizing India...
  - MatthewPhillips 15y ago
    Are you arguing in favor of public ownership of cell towers or are you arguing for Toyota ownership of the roadway system? I can't tell which.
MatthewPhillips 15y ago
> they are the solution to many of most onerous problems with wireless service today We disagree with what is the most onerous problem with wireless service today. The most onerous problem with wireless service today is carriers promising things that they can't deliver, then finding ways to up-charge their customers for features that were originally promised.
- achompas 15y ago
  > The most onerous problem with wireless service today is carriers promising things that they can't deliver, then finding ways to up-charge their customers for features that were originally promised. In my opinion these are symptoms of the REAL problem: telecos overcommit to investment in wireless infrastructure, then under-deliver every single time. Afterwards, they use non-sequiturs (iPhone customers keep us from investing! or we want to roll out 4G!) for what is obviously bean-maximizing behavior.
  - rhizome 15y ago
    Funny that the CWA touts that the deal "will create" 96,000 jobs, not mentioning that that number is the high side estimate resulting from a promise by AT&T to invest $8B in infrastructure. I'll leave it as an exercise for the reader to estimate how much of that would become reality.
    - achompas 15y ago
      Hah! Hard to believe an acquisition like this would create jobs, especially as AT&T sells it as a "bandwidth/infrastructure acquisition."
- beefman 15y ago
  That's the problem I'm talking about. See http://news.ycombinator.com/item?id=2946587 http://news.ycombinator.com/item?id=2946587 and this should also answer your question from the other subthread.
wpietri 15y ago
> they are the solution to many of most onerous problems with wireless service today As far as I can tell, the most onerous problems with wireless service today are terrible customer service, high prices, ridiculous contracts, telco-limited innovation, and jerking customers around through pricing that ratchets ever more in favor of the vendor. All of those are symptoms of insufficient competition, something a merger will make worse.

by beefman 15y ago

elehack 15y ago

In part: because the U.S. cell ecosystem has severe problems, and eliminating an independent competitor (particularly on GSM) sets us back rather than moving us towards an affordable, sane wireless economy.

beefman 15y ago
I think you have it backwards. What would happen if car companies also owned the roads, and each brand of car could only be driven on the corresponding roads?
- wanorris 15y ago
  There are obvious disanalogies, but if the options are between several competing companies with their own roads and cars, and having only one or two companies that collectively control all the roads and all the cars, the former is still better. At the moment, those are the options on the table -- throwing our mobile infrtastructure out and starting over with a clean slate is not something practically achievable.
  - beefman 15y ago
    > if the options are between several competing companies with their own roads and cars, and having only one or two companies that collectively control all the roads and all the cars, the former is still better No, it isn't. It's why infrastructure is usually owned by government, or given protected monopoly status. Where infrastructure is defined as anything too expensive to build redundantly (starting with the military and its natural monopoly, which we call government). Your wireless coverage is not affordable because you are paying to build 75% of each of three redundant mobile phone networks. Independent networks would never exist in a free market - only the FCC licensing process brought them about. And despite that, the vacuum is so strong it produced several mergers so far (Cingular + ATT, Sprint + Nextel, and of course, the remerger of the bells into Verizon and SBC/ATT).
    - MatthewPhillips 15y ago
      I'm not following your logic. I see your point that AT&T can absorb T-Mobile's existing infrastructure and thus provide wider coverage to their customers. What I don't follow is how a single provider will result in said provider putting more resources into infrastructure enhancement and lower prices. Please explain how.
      - beefman 15y ago
        The problem is, as an AT&T customer (a company I loathe BTW... in another tab I'm about to pay a $450 bill from them) I cannot use a Verizon tower. (There has been limited benefit to pursuing both the CDMA and GSM technology paths towards a wireless broadband network.) I assume I can't use a T-mobile tower either (there ought to be a Coase equilibrium between GSM carriers, but it would involve billing costs that a true merger could avoid). Thus, I have to pay AT&T, and you T-mobile, for coverage in the same area. Now, coverage in some highly-populated areas is bandwidth-limited. In other words, there are often enough customers of each carrier in a place to saturate the corresponding antennas. But any time the T-mobile antenna is not saturated and the AT&T antenna is over capacity, there is waste. This waste shows up on both our bills (forgive me for assuming you're a T-mobile customer for the sake of argument). Obviously, competition is a good thing, but its benefits are easily overwhelmed by infrastructure costs. Electric utilities generally operate very efficiently with government-sanctioned monopolies (and subsidies). The trading requirements enacted in the late '90s to promote "competition" on the grid are widely considered to have failed to improve utility service, and are implicated in things like the 2001 California energy crisis. Since colonial times, the Crown granted molopolies for expensive things like colonizing India...
- MatthewPhillips 15y ago
  Are you arguing in favor of public ownership of cell towers or are you arguing for Toyota ownership of the roadway system? I can't tell which.

MatthewPhillips 15y ago

> they are the solution to many of most onerous problems with wireless service today We disagree with what is the most onerous problem with wireless service today. The most onerous problem with wireless service today is carriers promising things that they can't deliver, then finding ways to up-charge their customers for features that were originally promised.

achompas 15y ago
> The most onerous problem with wireless service today is carriers promising things that they can't deliver, then finding ways to up-charge their customers for features that were originally promised. In my opinion these are symptoms of the REAL problem: telecos overcommit to investment in wireless infrastructure, then under-deliver every single time. Afterwards, they use non-sequiturs (iPhone customers keep us from investing! or we want to roll out 4G!) for what is obviously bean-maximizing behavior.
- rhizome 15y ago
  Funny that the CWA touts that the deal "will create" 96,000 jobs, not mentioning that that number is the high side estimate resulting from a promise by AT&T to invest $8B in infrastructure. I'll leave it as an exercise for the reader to estimate how much of that would become reality.
  - achompas 15y ago
    Hah! Hard to believe an acquisition like this would create jobs, especially as AT&T sells it as a "bandwidth/infrastructure acquisition."
beefman 15y ago
That's the problem I'm talking about. See http://news.ycombinator.com/item?id=2946587 http://news.ycombinator.com/item?id=2946587 and this should also answer your question from the other subthread.

wpietri 15y ago

> they are the solution to many of most onerous problems with wireless service today As far as I can tell, the most onerous problems with wireless service today are terrible customer service, high prices, ridiculous contracts, telco-limited innovation, and jerking customers around through pricing that ratchets ever more in favor of the vendor. All of those are symptoms of insufficient competition, something a merger will make worse.