If Phone Giants Merge: A Rural Take

In March AT&T announced a proposed $39 billion merger with T-Mobile, which would reduce the number of national cell phone carriers from four to three. The merger is subject to approval by the Department of Justice and the Federal Communications Commission (FCC), which will be considering the impact of the deal over the coming months.

Approval of the merger could have profound implications for rural residents, and the impact on rural network investment, pricing, and consumer choice should be carefully considered. 

AT&T has stated that the merger will lead to network improvements, including faster deployment of next-generation wireless broadband technology, and greater rural network development. But groups such as Consumers Union and the Rural Cellular Association have questioned those claims, referencing the communication’s carrier’s past performance.

It is difficult to estimate how many rural residents would be impacted, since effects on roaming, pricing, and market competition would extend beyond subscribed customers to AT&T and T-mobile to the entire cell phone and broadband market.  

Rural Network Development 

Wireless connectivity is important for daily life in small cities and towns throughout America, just as it is in suburbs and cities. From checking and responding to emails to making credit card payments, rural communities use wireless and broadband technology to stay connected.  Rural businesses have also reaped the rewards of affordable wireless technology. Today, a small business in Plainview, Minnesota, can have the same global reach as its largest competitor, creating a level playing field. 

Yet despite the importance of access for residents and businesses in rural communities, communications companies have frequently argued that insufficient demand exists to justify investment in infrastructure and coverage, and cited insufficient profitability.  Rural communities have had to fight for broadband coverage, and many areas remain inadequately served with slower Internet connections, higher prices and less developed cellular networks that drop calls and cannot handle the increasing loads of data from streaming video and other applications.  

AT&T has stated in filings that the merger will help the company to expand its networks in rural and underserved communities by providing spectrum and increasing its scale and scope to levels that can support investment. Acquiring access to T-Mobile’s cell towers would quickly add more towers to the AT&T network than could be built in the next eight-years.

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