Sign in
Become a MarketWatch member today
Brett Arends' ROI
March 21, 2011, 9:45 a.m. EDT
View all Brett Arends' ROI "º
"¹ Previous Column
Ten stocks to look at in the panic
First Take "º
Schwab's OptionsXpress deal isn't option for all
By Brett Arends, MarketWatch
BOSTON (MarketWatch) "” AT&T's move to take over T-Mobile USA is great news for stockholders. It will let AT&T shut down a competitor, jack up prices, and save on customer service.
The news is also absolutely disastrous for everyone else.
For exactly the same reasons.
AT&T agreed to buy T-Mobile USA for $39 billion in cash and stock, in a deal that combines the No. 2 and No. 4 U.S. wireless carriers. WSJ's Dennis Berman and Lauren Goode discuss whether the tie-up will pass regulatory scrutiny and who the winners and losers of the deal are.
Write to your Congressman. Write to your Senator. Write to the Federal Communications Commission and the U.S. Department of Justice, both of of which must approve the deal.
Tell them this takeover must not be allowed. No, not with conditions. Not with asset disposals. Not with commitments.
It must never be allowed. Ever. No way, no how.
The absolute bedrock of capitalism is competition.
The whole essence of our free market system lies in consumer choice.
That's why it's okay that companies charge what they like, and offer the products and services they like. Ultimately, if the consumer is unhappy, they can take their business elsewhere.
Take away that choice and the consumer is powerless.
Goodbye, free market.
Hello, Cellphone Soviet.
And this is a for-profit Cellphone Soviet, too. The worst of all possible systems.
Two weeks ago, as it happens, I took my business away from AT&T /quotes/comstock/13*!t/quotes/nls/t (T 28.36, +0.42, +1.50%) . The reason? Simple. T-Mobile offered me a better deal.
Lower prices.
No two-year contract.
And monthy savings because I brought my own phone.
It was a free market. So I moved.
Little did I realize that AT&T is the Hotel California of the wireless world. You can check out any time you like, but you can never leave.
What's going to happen to some of these great T-Mobile features after AT&T takes it over? Listen to AT&T chairman Randall Stephenson. This weekend he said AT&T "will look hard" at whether to continue them.
Gee, I wonder what that means?
Don't think this deal won't affect you if you aren't a T-Mobile customer.
The presence of a fourth player in this industry helped keep the other three at least semi-honest.
If you think they're arrogant now, just wait till they've cut this cosy club down to three.
After this deal, they will do to you exactly what they like. Count on it.
Oh, and get ready for "merger misery." These deals are always bad for the consumer.
Think of Sprint /quotes/comstock/13*!s/quotes/nls/s (S 4.26, -0.80, -15.74%) and Nextel.
Think of FedEx /quotes/comstock/13*!fdx/quotes/nls/fdx (FDX 90.18, +0.90, +1.01%) and Kinko's.
I remember when all the online brokerage firms were merging. As a customer I went through three mergers in about two years. Each one was a disaster. At one point their computer systems got so screwed up they lost some of my files.
Transaction reports. Tax records. Minor stuff.
The CEO didn't care. Why should he? He had his mind on just three things: Stock options, stock options, and stock options.
You think AT&T's Stephenson's any different? His customers have been miserable for years, yet in the past three years he's pocketed an incredible $72 million.
No kidding, $72 million, while his stockholders actually lost money.
Unbelievable. Imagine what he would have made if his stockholders had made a profit!
Defenders of this deal, like the flacks and their patsies in the press, will have their talking points ready, of course.
"We won't be eliminating competition," they'll say in reply. "After all, you can still move to Verizon or Sprint."
Brett Arends is an award-winning financial columnist with many years experience writing about markets, economics and personal finance in Europe and the U.S. He has received an individual award from the Society of American Business Editors and Writers for his financial writing, and was part of the Boston Herald team that won two others. He was educated at Cambridge and Oxford Universities, and has worked as an analyst at McKinsey & Co. He is a Chartered Financial Consultant (ChFC) and Accredited Asset Management Specialist (AAMS). His latest book, "Storm Proof Your Money," has just been published by John Wiley & Co.
Charles Schwab's announcement that it will purchase OptionsXpress Holdings Inc. is likely to make financial "?power tools' available to a lot more ordinary folks "” and dramatically increase the chance that novices will harm their portfolios.
38 min ago1:48 p.m. March 21, 2011
"Why AT&T's deal for T-Mobile must be blocked http://on.mktw.net/elV3C9" 9:30 a.m. EDT, March 21, 2011 from MKTWArends
Read Full Article »