Monday, November 28, 2011

945 Low Battery

945 Low Battery

ATT’s acquisition of T-Mobile isn’t dead, but it might well be any day now.  And it couldn’t happen to a nicer outfit, ATT, which will be forced to pay Deutsche Telkom billions if the present low battery runs completely out of juice.  How’s THAT for an early termination fee!

The Justice Department doesn’t much care for this corporate maneuver.  The Federal Communications Commission ain’t overjoyed either.

And the companies have withdrawn their request for FCC approval.  They need that because wireless phone carriers are licensed broadcasters who use radio transmission to get the signal from phone to phone by way of the cell towers.

Both companies insist the deal is still on.  So why would they rescind their license applications?   Easy.  Because once the FCC starts to act on the paperwork, information that’s now secret becomes public.

And what’s in those secret filings?  No one knows for sure, but you can bet on this:  whatever’s there contradicts statements everyone’s been making in public.

ATT has been advertising the benefits of the acquisition.  More jobs.  Better service.  Blah blah blah.  Do the secret filings contradict any or all of that?  We don’t know.  But insiders in both companies do.  So what are they hiding?

Meantime, T-Mobile is talking about closing retail stores that are too near ATT equivalents (more jobs?) And it’s probably not keeping up with the perpetually changing hardware market.  How can they buy the latest stuff if they expect to be taken over?

ATT insists in public that this deal will improve service.  That’s probably true, given the stinking coverage and call dropping they offer.

Deregulation was supposed to increase competition.  How does one giant devouring another affect that?  Take a look at the airlines, the broadcast industry in general, the NBC/Comcast deal, any of the zombie banks.

Bailout for telco down the road?  AT&Too Big To Fail, anyone?  An acquisition of T-Mobile by, say, poor, beleaguered Sprint might make more sense.  Sprint needs all the help it can get if it’s going to compete with the other big guys and the throwaway phones and the Jitterbug Phones, the AARP phones and land lines and calling cards and wrapping notes around bricks and sending them sailing through windows.

The whole deal centers on ATT wanting to be bigger than Verizon, once itself a baby bell.  What would be the advantage in that, besides bragging rights?

This battery isn’t holding its charge.   But don’t worry, guys, we’ll be glad to supply new ones in return for a new two-year contract.

Shrapnel (mergers and acquisitions edition):

--There’s almost no such thing as a merger.  It’s almost always a takeover.  And this is nothing new, it goes back to the earliest days of commerce in this country.

--So why use the term “merger?”  Because it’s prettier than “devour,” and it fools a lot of people.  Fooling a lot of people is one of the major goals of corporations with something to hide.

--All this goes back at least two thousand years.  Was the merger of the New Testament into the Bible a merger?  Or was it a takeover that used the original name, kind of like when Chemical Bank took over Chase and called itself by the better-known Chase name?

I’m Wes Richards.  My opinions are my own but you’re welcome to them. ®
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© WJR 2011

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