August 04, 2005
Both the FCC and the Justice Department approved Sprint's $35 billion merger with Nextel yesterday, creating the third largest wireless company in the United States with more than 40 million wireless subscribers and $40 billion in annual revenue.
"This action will ensure that consumers continue to receive the benefits of wireless competition, such as reduced prices and increased coverage," said the commission's chairman, Republican Kevin Martin. "In addition, consumers can expect improved service quality and more advanced services."
Consumer advocates worried that the deal may leave just three major players.
"The good news is that the merged companies should be able to better compete against Verizon and Cingular," said Gene Kimmelma, senior policy director at Consumer Union, the publisher of Consumer Reports magazine.int gets access to Nextel's 15.3 million subscribers and Nextel avoids a costly upgrade of its own network. The two companies will own and control most of the licensed 2.5GHz frequencies available for WiMax in the United States. Craig McCaw's Clearwire owns a majority of the remaining frequencies."The bad news is that we may have lost the opportunity to also preserve enough spectrum for a fourth strong competitor in this market," Kimmelman added.
The new Sprint Nextel Corp. plans to spin off Sprint's local telephone service as its own business early next year. That would form what would be the fifth-largest local telecommunications company in the U.S., with 7.6 million access lines in 18 states.
Meanwhile, the FCC wants to allow telephone companies to stop competition from independent ISPs.
Under the Supreme Court's "Brand X" decision in June, cable companies can bar rival Internet providers from their networks. The FCC wants to extend that right to telephone companies.
Martin has said it is a priority to relieve the "Baby Bells" from the 1984 breakup of AT&T, of their historical obligation to allow others to lease access to their networks.
Among the issues on the table are whether to continue the old rules of guaranteed access and regulated prices for some period, giving ISPs such as EarthLink Inc. and America Online Inc. time to adjust. Others include guaranteeing "net neutrality" so that the regional phone companies could not bar access to any Web sites and ensuring law enforcement's ability to wiretap Internet phone services.
The approval also bodes well for other pending telecom mergers. Verizon is seeking to buy MCI for $6.7 billion while SBC has a deal for AT&T at $16 billion.
Eliminate the FCC? It will never happen. Who else can prop up and maintain monopoly interests?
to the new world order.When you buy from iTunes, the only folks involved in the sale are the store and the supplier. The ISP isn't sitting there demanding a cut.
When you buy over a phone, the cellular carrier is demanding a cut. A big cut. They're also laying on a heavy DRM that won't let you take that song and put it, say, on your PC, or on your iPod.
So where are you going to buy your music from?
Capitalistic countries with open competition and broadband wireless everywhere -- like Japan and South Korea -- are about to soar.
