New Client of the Regulatory State Expects Results

by on April 16, 2012 · 122 comments

When the federal government torpedoed the AT&T/T-Mobile USA merger in December pursuant to the current administration’s commitment to “reinvigorate antitrust enforcement,” it created a new client in search of official protection and favors.

It was clear there is no way T-Mobile – which lost 802,000 contract customers in the fourth quarter – is capable of becoming a significant competitor in the near future.  T-Mobile doesn’t have the capital or rights to the necessary electromagnetic spectrum to build an advanced fourth-generation wireless broadband network of its own.

T-Mobile’s parent, Deutsche Telekom AG, has been losing money in Europe and expected its American affiliate to become self-reliant.  In 2008, T-Mobile sat out the last major auction for spectrum the company needs.

The company received cash and spectrum worth $4 billion from AT&T when the merger fell apart, from which T-Mobile plans to spend only $1.4 billion this year and next on the construction of a limited 4G network in the U.S.  But it must acquire additional capital and spectrum to become a viable competitor.

Unfortunately, every wireless service provider requires additional spectrum. “[P]rojected growth in data traffic can be achieved only by making more spectrum available for wireless use,” according to the President’s Council of Economic Advisers.  Congress recently gave the FCC new authority to auction more spectrum, but it failed – in the words of FCC Chairman Julius Genachowski – to “eliminate traditional FCC tools for setting terms for participation in auctions.”

Everyone fears it will take the FCC years to successfully conduct the next round of auctions while it fiddles “in the public interest.”  That’s why Verizon Wireless is seeking to acquire airwaves from a consortium of cable companies, and why T-Mobile will do anything to stop it.

T-Mobile previously looked into buying the spectrum for itself, but it didn’t happen.  If regulators can be persuaded to block the Verizon Wireless from acquiring it, that would reduce the market value of the spectrum and create an opening for T-Mobile to acquire it at a significant savings.

When government intervenes to protect an underdog, it diminishes the rewards for success and the penalties for failure that drive competition and innovation.

In this case, T-Mobile is arguing that (1) spectrum is not created equal, (2) Verizon Wireless has acquired more than its “fair” share of the most valuable frequencies, (3) Verizon Wireless is acting with anticompetitive animus to foreclose T-Mobile’s access to a critical input, i.e., low-frequency spectrum, which (4) Verizon Wireless itself does not need but intends to “warehouse.”

The argument that Verizon Wireless has ended up with valuable frequencies while T-Mobile has not does not stand up to close scrutiny.  The FCC has wisely declined to take this bait in the past.

Although it is true that it takes fewer towers or cell sites to serve a geographical area at a lower frequency, superior coverage counts for less in urban areas where heavier demand requires more towers to boost capacity.  In higher population densities, low and high frequencies offer almost equivalent performance, according to Peter Rysavy.  Operating in the higher frequencies in congested areas, as T-Mobile does, if anything, provides a competitive advantage, because those frequencies have a lower market value and therefore cost less to acquire.

Verizon Wireless does require additional spectrum, just like every other wireless provider.  The issue here is simply who is more “deserving” of spectrum that is available for purchase now on a secondary market while the rest of the industry waits for the FCC to play its political games.  No one is suggesting that any entity has more spectrum than needed to accommodate rapidly increasing demand for wireless services.

The contention that Verizon Wireless plans to warehouse the spectrum it seeks to purchase ignores the fact that the FCC imposes performance requirements on licensees.  There are buildout deadlines, plus the necessity to demonstrate that substantial service was provided in order to win a license renewal every ten years or so.

When the Department of Justice and the FCC prevented AT&T from acquiring T-Mobile last year, they apparently thought they were promoting competition.  But government efforts to enhance competition, accelerate private investment or attract new entrants almost always have unintended consequences.

The principle of moral hazard posits that if the cost of failure will be borne by someone else, those who are in the best position to minimize risk will have little incentive to do so.  When government partners with private companies, it often ends in bankruptcy.  As a nation, we depend on businesspeople to manage firms with skill and foresight, not on taxpayers to bail them out.

If T-Mobile can’t make it on its own, which seems more likely than not, the FCC and DOJ have merely laid the foundation for a vicious cycle of regulatory battles, of which Verizon Wireless/SpectrumCo/Cox Wireless transaction is just the beginning.  One suspects the agencies have signed on a high-maintenance client.

  • SUNSHYNSUE

     Do you get it yet?  Drop T Mobile…… they SUCK!

  • Sunshynsue

    I was paying T mobile $120 a month for 1 phone.  now I have unlimited everything through simple mobile and pay only 40. a month   

  • Ghemmons

    When all there all that is left is AT&T and Verizon, how much do you think you will pay/ 10 years ago there were 12 phone companies for cell phones/ Between Verizon and ATT   NOW THERE  ARE ONLY 3/

  • Jj

    I cancelled my AT&T iPhone and paid an ETF penalty so I could test out Android.  A month or so later, I grew tired of Android but was willing to put up with it for the next 2 years.  A few months into my service, these TMO crooks absolutely refused to take an accidental $36 BS overage charge off my bill.  The BS overage had something to do with the peak, off-peak time rollover.  The inept CSR couldn’t even point out to where this policy was located in the contract.  The idiot kept mumbling that TMO could make contract changes anytime they wanted.  These TMO losers would rather lose a high paying customer for the next 18 months than take the simple charge off as a courtesy.  The stupid lady said the only way to get out of the charge would be to upgrade to unlimited minutes and change it back the next month.  Of course, the contract would be reset from the start, something she didn’t admit to until I brought it up.  No way in hell.  I told the stupid lady I would cancel the next day unless the charge came off.  The next day I got a new iPhone 4S and had my old rollover minutes restored as a courtesy. 

    Ya, I paid the TMO scum the $200 ETF to be rid of them.  In turn, they sent me a final bill that was not prorated.  It’s a good thing there was only about a week to go in the cycle.  After looking it up on the net and seeing countless others experiencing this non-prorated problem, I didn’t even bother calling these losers.  These scumbags sure know how to thank you for your business.  They want to say goodbye on a sour note so you never want to come back.  I dealt with these bastards back in 2005 and swore never to use them again.  I told the stupid lady I would never make that mistake again.

  • Dd

    xxx

  • StopGreed

    LOL, “excellent article” – It was biases from the start. 

    “When government intervenes to protect an underdog, it diminishes the
    rewards for success and the penalties for failure that drive competition
    and innovation”

    Wheres the supporting facts for this statement? There is none.

    After all their lobbying, corporations are writing their own laws, fixing the playing field so there is no “true success” to diminish. They did not earn it. They change laws to tilt an an otherwise fair and level field. Its a fixed game.

    Repugs think its ok for corporations to receive billions of dollars in “corporate wellfare” on the front end of businesses (like the Billions we give to oil companies) but government acting or  assisting in any other way is Socialist.

    “But government efforts to enhance competition, accelerate private
    investment or attract new entrants almost always have unintended
    consequences.”

    Excellent articles support their statements with facts, but this article is mindless unsupported fluff with an obvious conservative slant. Nice operative qualifier- “almost always”. NO.

    You are wrong. Without government intervention, we all would be working for monopolies 12 hours a day, 7 days a week for poverty level wages with no medical and no safety (your arm gets torn off at work and they fire you).

    Facts to support my assertion? Turn of the nineteenth-century American history. We all know what unhindered GREEDY corporatist elites do- they put 7 year old children to work in dangerous factories.

    …remember Gingrich asserting we should abolish child labor laws a few months ago?
    DON’T BELIEVE IT CAN’T GO BACK TO 1900 STANDARDS AGAIN..

    Support the government in its job to protect the people from evil greed.

  • Blazerfl

    I feel your pain they stole 400 out of me and I was told my county has 4g speeds and when I signed up I had to wait for the phone I was wanting, phone comes 30 days later I had no 4g service, called BBB, and filed a COMPLAIT WITH THE FCC, so I mailed the phone back it was tracked back to their warehouse, they lost it I still had to pay them money.

    Moral of this story is TMO sucks and I hope they keep on sinking right down the tubes BABY

  • Blazerfl

    this has nothing to do with spectrum their practices are not ethical,
    stealing from the customer in a legal way, if i sued to get my money back I will win in small claims.

  • Blazerfl

    yup same here power cycle the phone on and off to get text on mytouch 4g
    I’ll keep my att and think god I switched

  • Blazerfl

    Yup their store reps lie as well as their customer service and I’m glad to see they are falling down the drain they got me for 400 dollars

  • Blazerfl

    Yup same here with my mytouch 4g, promised services they can not deliver on no 4g in my county even thugh it showed my map blankted in 4g on their maps was never here jefferson cell tower tech called and told me never had it here the maps are wrong

  • THOMAS LEE

    We have cancelled the service twice and they still charge two months until the third month they contact you for not paying the two months bills, whole bunch crooks. No wonder they lost customers. hope they will lose some more. say millions.

  • Blazerfl

    same damn thing here promised all discounts as well and never happened, once I seen my phone service was only 2g with tmo They had me because uscc had 3g speeds TMO said I have 4g witch was totaly untrue I was stuck with 2g service with tmo

  • Titania

    I have had T Mobile for about 8 years and I love it. They are easy to work with and they give discounts to certain companies if you work for those companies. I have never had an issue with T Mobile except for some of the inept associates that work in their stores. Of course inept customer service is rampant everywhere.

  • michelle knight

    Wow, Name-calling & assumptions will get you very far in this Adult world! There is absolutely nothing at ALL wrong with others offering their opinions here is there. As far as your assumption that the people complaining received FREE phones, you can keep that one. I bought their TOP-OF-THE-LINE phone 3yrs. ag & when a noted glitch became present these Bastards wouldn’t allow me to exchange my phone for 9 months, when they did they sent me a piece of crap phone as a replacement that was no where near what I had paid them for. They also received my Daughters phone that she sent back & claimed that they didn’t & charged her for the phone. As far as their Customer Service goes, Hell, Yes it leaves alot to be desired!!!!! It would be nice to call Customer Service and have someone on the other end who spoke & understood English! Please, however, forgive those of Us who have NOT had the same experience with the MONEY-GRUBBING DOGS as you have, but it is ALWAYS a good thing to see any company who reguarly cheats/lies/deceives/ & steals from their customers go down in flames!

  • justposting

    I think Audieho was referring to an event in the first 2 years of Obama’s presidency when the House and Senate both had Democratic majorities.  It also seemed to me that Audieho was not talking about T-Mobile but another company that was affected by gov’t policy as an example.

  • Doubleoosal

    audieho, I don’t know what planet you live on but the Democrats are the minority in congress not the majority.  The right wing has the super majority.  You sound like one of those uniformed teabaggers that wants to blame everything on the democrats regardless of the facts.  Educate yourself!.      

  • http://www.facebook.com/people/Christopher-Standley/100001179196063 Christopher Standley

    I have been a tmobile customer for over 6 years.  I was fairly happy with them until I went in to renew my contract.  To make a long story short…Tmobile does not do handset upgrades anymore when you renew (subsidize the price of a new phone).  I did end up staying with them because at the end of the day, they are all the same, so the devil you know is better than the devil you dont know.   Plus, they DO have the best prices for talk+data (yes, I checked.  I ended up getting the tmobile exclusive Samsung galaxy blaze, which is a really great phone.  It can do anything an iphone can do, minus siri. 

  • http://profiles.google.com/flensingknife Bill Mercer

    T-Mobile doesn’t suck any worse than the other sucky providers, and they’re affordable. If I wanted an iPhone on T-Mobile I could have one, it’s called a SIM card. People who complain about not being able to get a specific phone from a specific carrier are noodle heads.

  • GSMdude

    Having worked as a customer service rep for three cell phone carriers VZW and Tmobile  as well as a small regional wireless carrier, its fair to say my opinion is an educated one. I would say that VZW is the most uncomprising, Tmobile is the most dishonest and the smaller carriers in fact provide the best service overall. If people want better service they need to get savvy about their phone purchases and understand that buying a cell phone and buying phone service are two entirely different processes. Your best bet is to buy a phone from a 3rd party retailer at full price w/ no contract and then use the phone with whatever carrier you want. By not being under contract you will have more leverage when you have to deal with their customer service and should you have to change carriers you’re phone will be unlocked and you have no termination fee to pay.

  • observer

    You can get an iPhone and use it under Tmobile’s plan. I called and asked as I was going to cancel. It’s a little known secret.

  • Joseph H. Allard

    There isn’t a cell phone company out there who conduct honest forthright business with their customers. Their sole concern is making excessive profits for themselves and their greedy investors. I would really like to see Al Qaeda go after American corporations and their Republican bedfellows than innocent people.

  • Amickeymax4224

    I have been with T-Mobile over 8 years, I have 5 lines for my family.  They changed the family plan and never notified us.  They charge me $20.00 per line when we were suspended for 10 minutes because our wires got crossed on the payment of the bill. They have the worse customer service in the last 12 months. I have allways praised their customer service. Now it stinks. We have never seen anything like it, after they got us to extend our contract for 2 more years.  We will be gone October 2013. Someone would like these five lines. Our bill has gone from $279.00 to $312.00 to $365.00 and is now sitting at $469.00 a month and we were never notified of any changes to our service. Actually nothing changed, but their billing and how it is billed. So, so long TMobile you have us for about 1 more year, unless you go out of business.   

  • http://twitter.com/perk Perk

    What happened to all of that 700mhz spectrum that was so perfect? To my knowledge, it is ALL warehoused. 

  • Jill

    I had almost the exact same experience.  Started when TMobile was still VoiceStream, paid on time every month for over 10 years.  They screwed me right and left, they got my money but they lost my business – FOREVER!  I ported to AT&T, cancelled my service and now they want one months service. Right now the month to month no contract phones at Walmart are looking really good.

  • http://pulse.yahoo.com/_4CSEMLAK53D6EWJH7KDSKK3ROA Bigdickballer

    I have a cousin who got a Walmart prepay phone(straight talk) and seems to get everything i paid $65/mo for $30..

  • http://profile.yahoo.com/N2HPSVXQUZCNKZ3KK3CI5QUVEU CA

    I’m wishing them good luck. Signed on with them once. Opted out during thirty day trial. No problem.

  • Greenfamily77

    I cant wait until my contact is up with T-Mobile.  I’ve been a customer for about 10 years and have always experienced excellent customer service….until recently.  Their customer service has seriously declined.  They are no longer willing to work WITH the customer.  Their policies have become stringent and they are unflexible.  I will be switching providers as soon as I can.

  • Funnsun

    I love tmobile! Was so happy bout the lack of merger 3 carriers better than 2 to chose from. Especially when other 2 do not have a family data plan! Been with tmobile for10 plus years. Great service in retail stores and 611. Every time contract comes up compare carriers and tmo has best cost plus service in our area. Hope they survive…our kids want iPhones we say go ahead and pay for ur own contract…they haven’t left tmo family plan yet. We all have mytouch4s and have no problems!

  • http://360.yahoo.com/profile-IdR0g3kncq2jGfqK4aNlx9.c4JOJFqXSCdsN_A-- Vitsing

    Three cheers for more Government intervention. We the People have been screwed again by Big Brother.

  • Hurricanefred

    I had T-Mobile for 9 years. What a mistake that was. Bad cell service. Bad customer service. Most of you that said they were crooks are absolutely correct. They pulled the same crap with me and billed me after porting my number over to SPRINT ( who is awesome by the way ). This also after paying over 100 a month for 9 years.. I agree with the person who said ” If T Mobile was the last cell phone company on the planet, I would not have a cell phone ” ! F U TMobile and after the 9 years of crap you put me through, I can wait to see you shut your doors! Good riddance!

  • http://www.facebook.com/people/Lance-Miller/100000716178532 Lance Miller

    T-Mobiles pricing use to be a major draw but they seem to be moving to a nickel & dime the customer to death business model, as represented in their 180 degree change in the tether / hotspot useage policy. As far as the iphone goes, check out their Facebook page. Everyday they get dozens of peeps asking when can they expect T-Mobile to carry the iphone. I just wonder if they have the spectrum to support its use, probably not.  

  • http://www.facebook.com/people/Lance-Miller/100000716178532 Lance Miller

    Not it’s not a “little known secret”. What you’re not aware of is that the radio in a GSM iPhone isn’t compatible for use with anything but their “edge” network which will barely load a webpage. It is estimated that over 1 million iphones currently use their network. Most sign-up for non-smartphone service & then pay $5 per month, or $15 per month for family plan,  “edge” data plan. We did exactly this until I just couldn’t take waiting forever for a website to load or waiting till I could connect to wifi. After doing some research & discovering the advantages of android over IOS I moved to the Google Nexus & haven’t looked back. Paying $399 for the new Nexus & then being able to negotiate a non-contract cellular plan has been a real blessing.

  • Plutosmuse143

    Just get simple mobile.  They run on t-mobile network.  40 bucks a months everything unlimited.  4G internet on my HTC G2 plus free wireless teethering.  Love it.  Before that I had t-mobile for 11 years but they are too expensive!

  • Missy

    stick to virgin mobile or tracfone….they don’t screw you….! stop going to these high price guys,,,they are ripping u off…and jipping u….get the lg 500g from tracfone itsd thru att….has good features….and all. save lots of money….no contract…no Id nothing just simple and get it read rthe reveiws on amazon…..

  • MISSY

    as so to say I am glad I am not a VICTOM to these morons…that take your money ans screw u……..and stop being thier LOYAL customer thats wherew they take advantage of you….GOD i HATE THEM….

  • Lhweb22

     My husband was on Verizon for work for years paying $130 per month for unlimited text, talk, and data. He moved to the same plan on TMobile and he pays $62 per month.  For that savings I don’t care if they throttle at 2 GB of data. I have been on TMobile’s family plan for years with my children and the customer service has been excellent.  As for the Iphone.  I’m a diehard Android user.  I’ve recommended the Android Galaxy 2S to several friends who were Iphone users and they all said they like the Android better.

  • Lhweb22

     I don’t think you can access the 4G network on an unlocked Iphone.

  • Dan4cs6s

    Ahhh… written like a true republican!

  • Totofofo

    I can’t wait till October to get out of my contract ! I am currently playing 110 a month for one line and using a shittie beat up phone cause they decided to cancel my insurance on me without notifying me :) number 1 for customer service? Kiss my arse :)

  • http://www.facebook.com/profile.php?id=1163206291 Karen Snyder

    T-Mobile changed the date my bill is due from the 14th to the 11th…without telling me. I hate them too…but unfortunately I have no wherewithall to change-I’m busy and just don’t have the time.-which is why they stay in business….I know these people are
    dirty filty no-good scoundrels…I know how they operate. I don’t want to go to another cell phone company and learn how horrible they are-it’s too stressful.

  • Njnyturkey

    As a former wireless employee.  All I can say is that 9 times out of 10, people FAIL to read the TERMS AND CONDITIONS of any transaction they make and those who represent the company.  The fault here lies with the sales persons who sold you the service,not the company.  It is the responsibility of that sales person to notify the customer that the phone number doesn’t automatically cancel the service at all!  Yes, the number is ported and active.  No, the account doesn’t stop charging unless notified that there’s no phone number attached.  What’s sad is that customers like yourself don’t know until you get the bill and it has a negative effect on the company as well.  Why?  For those who don’t know…it costs $ for each call to come into customer service who in turn has to spend time figuring out what happened.  Depending on the length of the call, either the situation is resolved or time again is wasted over the same issue.  Now, I’m not blaming you for what happened.  I blame those sales persons who are trying to make a quick buck and not care about the consequences of their actions.  Imagine if this sales person told you to call T-mobile to cancel after porting your phone number.  I guarantee you 100% that you would not have had to deal with this problem and for that, I am sorry.  I apologize because I have been where you are at and also the knowledge of a rep who had to clean up this type of mess.  There are honest sales folks out there that actually do their job and do it well.  It’s the bad apples that give the company a bad name.  As for having to call and complain multiple times, shame on those reps and their supervisors for not realizing the problem and resolving a simple mistake.  When “porting” started years ago, it was a big headache to deal with.  As my company got many complaints, they realized that changes had to be made to reduce multiple “same issue” calls.  Sounds like in your case T-mobile reps failed to resolve your problem either because A) its policy and they are cheap, B) they’re are stupid and poorly trained.  Go get your money back,  there should be a dept. that handles complaints. Write to your atty. general, facebook complaint, basically….anything that draws attention.  I give it 3 months and you get your money back.  I know this because I also worked for Cingular’s office of the president dept.  Trust me on this and good luck.

  • Econ

    ten years with t-mobile.  they screwed me too. i am paying 90/month for what they are now advertising for 50.  asked them to switch me… $200 fee!  10 years loyalty gets you NOTHING from these greedy bastards. i talked to all levels of cust. service.  nobody could do a thing for me.   i was so insulted.   i will leave them as soon as possible!  

  • Econ

    and i agree… this article is conservative bullshit!  spare me…

  • zonlyone

    I’ve experienced the opposite with T-Mobile. They offered me a loyal customer plan that gave me an additional line, unlimited everything for $100 less than what I was paying. They were the only ones who took a chance on me a few years ago when I had no credit, and was needing a cell phone. Their customer service has always been really good, and very friendly, and they’ve pointed out things to me that would save me money on several occasions. So, I haven’t found that to be the case. 

    Their service is what I don’t like, in terms of coverage. I just don’t get very good  coverage, and it can be infuriating. However, I have not left because of the customer service. A friendly representative who wants to give you the best deal….well, that goes a long way for me. 

  • http://pulse.yahoo.com/_2KD7BX6WCUUCQOQD7EKEYRMEJE zonlyone

    I’ve experienced the opposite with T-Mobile. They offered me a loyal customer plan that gave me an additional line, unlimited everything for $100 less than what I was paying. They were the only ones who took a chance on me a few years ago when I had no credit, and was needing a cell phone. Their customer service has always been really good, and very friendly, and they’ve pointed out things to me that would save me money on several occasions. So, I haven’t found that to be the case. 
    Their service is what I don’t like, in terms of coverage. I just don’t get very good  coverage, and it can be infuriating. However, I have not left because of the customer service. A friendly representative who wants to give you the best deal….well, that goes a long way for me. 

  • Anonymous

    And we are STILL in the ditch with Obama!!!!!!!!!!!!!!!!!!!!!!!

  • Ret

    You are just plain stupid!

  • Anonymous

     you better hope that those “greedy” corporations continue to make “huge” profits, my friend, who do you think is paying for your government freebies?

  • Homegrown_patriot

    In Utah 3rd party can bill you thru your phone bill.  Problem is most do it without out your permission.  I saw that a 3rd party was attempting to do this I immediately called to mobile and told them this was fraud.  It took me calling T mobile every month for 5 months to get this 3rd party fraudster off my bill.  I have never seen a refund.

    Then there was the Samsung  Galaxy s 4G phone.  The damn thing has a mind of it’s own it does things all the time that I don’t tell it to do.  It rejects calls from my boss. It goes into silent mode all the time without me telling it to do that.  I thought the phone was just a lemon and turned it into T mobile for a replacement but the replacement does the same things.  

    When my contract is up I am so gone and I’m never coming back.  Their customer service is impossible to get to and they always sound so up beat and you get assurances that they will take care of your problem and then they do nothing.  I can’t wait for my contract to expire.  I just hope the rest aren’t just as bad.

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