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Competition is the basic regulatory mechanism in a capitalistic economy as it subjects producers and resource suppliers to the dictates of consumer sovereignty (McConnell & Brue, 2002). But with…
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Download file to see previous pages This may result to inefficient allocation of resources and consumers to change their behaviors towards the market and so there is a need for the government to intervene. What more could happen if two large companies will merge? And these companies happen to cater services that are of importance to our fast moving lives- the telecommunications services?
On November 24, 2011, an article entitled “AT&T Merger with T-Mobile Faces Setbacks” was published on nytimes.com by Edward Wyatt and Jenna Wortham. They talked about the problems that the two mobile companies, AT &T and T-Mobile, are facing with their planned merging. AT&T is one of the largest telecommunications services provider in the United States and even worldwide. Its services include wireless communications, local exchange services, long-distance services, data/broadband and Internet services, video services, managed networking, wholesale services and directory advertising and publishing. In March of 2011, it announced its plan to merge with T-Mobile which is owned by Deutsche Telekom. The former agreed to buy T-Mobile from Deutsche Telekom for $39 billion. But of course, the merger was subject to F.C.C. approval because the joining of the two companies would have required transfer of licenses to use public airwaves for cellular phone signals and wireless Internet access (Wyatt & Wortham, 2011).
Being a monopoly or even just a big player in an industry yields many advantages and if not properly monitored will affect the consuming individuals negatively. In the case of these telecommunications merger, different sectors from the society are paying close attentions. The Justice Department for example has said that the merger would severely restrict competition, Federal Communications Commission officials have added that AT&T’s confidential filings indicate the merger would eliminate jobs and consumer groups who closely monitored the actions of the authorities said that their combined actions indicated ...Download file to see next pagesRead More
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