Monday, August 8, 2011

How an AT&T/T-Mobile Merger Could Benefit Rural Kentucky

Governor Steve Beshear and Kentucky Senate President David Williams do not agree on very much, but both agree that high-speed internet should be available to all Kentuckians, and that it could be achieved through a T-Mobile/AT&T merger for zero cost to taxpayers. AT&T promises that if its merger succeeds, it will invest $8 billion to cover 97% of Americans with its 4G LTE network, including rural Kentucky.
In a letter to the FCC, Williams explained the major economic growth that result from wireless broadband in rural Kentucky:
For rural Kentucky, particularly, economic recovery has, and will continue to be, hard won. Without the resources to support its businesses, schools, and communities, these areas are apt to struggle for years to come. But by expanding its advanced wireless broadband network to reach an additional one million square miles across the country, the merged AT&T and T-Mobile can give rural communities a connection to the future of education, employment, health care and more. Expanded wireless broadband capabilities will put communities like rural Kentucky on a more level playing field with its more metropolitan counterparts.

Beshear also wrote a letter to the FCC where he noted that the Commonwealth can only encourage this innovation, and that the private sector is needed:

The merger of T-Mobile USA and AT&T is a private-sector initiative that complements our efforts to build Kentucky's future now and that’s why I support it. Once approved, the merged company would be able to expand the upgrade of its existing wireless networks to offer our residents, businesses, schools, hospitals, and other organizations with access to state-of-the-art mobile broadband.

Besides helping rural communities, the proposed merger will also benefit people in urban areas. AT&T and T-Mobile both use GSM wireless technologies for their 3G networks: therefore AT&T customers could use T-Mobile towers, and vice versa, resulting in expanded coverage for both companies' customers.

Verizon recently acquired Alltel Wireless. It took six months to get the approval of the FCC. AT&T has said that it believes its merger with T-Mobile will take 12 months, and many people think it may take even longer. Why? Market saturation.

Currently, there are four large cell carriers in the U.S; Verizon, AT&T, Sprint, and T-Mobile. If AT&T merged with T-Mobile, there would only be three. Some people think that three large carriers are not enough, and that there wouldn't be enough competition, resulting in less innovation. To the contrary, If AT&T merged with T-Mobile, more competition would result, because AT&T would have the funds to deploy a 4G network that others would try to match.

Wireless broadband would open up a whole new world for people living in rural Kentucky. All that’s stopping it is the FCC. 

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