Financial mag opposes AT&T/T-Mobile merger

AT&T's acquisition of T-Mobile would reduce consumer choice and essentially leave the wireless market as a duopoly, according to an editorial from The Economist.

The latest edition of the British weekly argues the Obama administration should block the merger and attempt to introduce more competition in the wireless market rather than allowing AT&T and Verizon to swallow up their competitors.

"It is a mark of the mess that the United States has made of telecoms not just that such a deal is being considered, but also that a duopoly might actually bring genuine short-term benefits," the piece states.

"All the same, it would be far better if the Federal Communications Commission (FCC) and the Department of Justice blocked the T-Mobile merger — and tried to reform the market instead."

The authors acknowledge that allowing AT&T to complete the deal may speed the nationwide deployment of next-generation wireless broadband, which President Obama has promised to do, but caution that two providers may not be enough competition. They also noted AT&T's poor customer service ratings.

The piece also compares AT&T's case for permitting the merger to Ma Bell's original argument for allowing it to purchase other local phone carriers, noting that regulators later decided against the natural monopoly approach due to technological gains.