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….and then there were three

AT&T has moved to the top of the cell phone carrier chain with its $39 billion plan to buy T-Mobile.  The move would make AT&T the largest cell phone carrier in the nation with 130 million customers, surpassing Verizon Wireless’ 102 million.  AT&T will know serve about 43 percent of the U.S., according to a report by the Huffington Post.

What does this chess move by AT&T mean to consumers?  It means down the line consumers may only have two cell phone carriers to choose from, but more on that in a second.

T-Mobile had been aggressive in offering lower prices for their voice and data plans as well as being on the forefront of the Android Market, after all, it was with T-Mobile that Android had its debut (G1).  By doing this, T-Mobile was able to stay competitive with the likes of AT&T, Sprint, and Verizon.  But in the end it was no match for the big boys, which led to it eventually being swallowed up by AT&T.

With the merger there will be three remaining cell phone carriers in the U.S., AT&T, Sprint and Verizon.  For current T-Mobile customers, what promise do they have that AT&T won’t raise prices?  With less cell phone carriers in the nation the big boys will will be able to raise prices knowing consumers have no other choice, besides going the pre-paid route.

“We know the results of arrangements like this – higher prices, fewer choices, less innovation,” said Public Knowledge president Gigi Sohn in the same Huffington Post report.

AT&T CEO Randall Stephenson said in the same article that one of the goals of the acquisition would be to move T-Mobile customers to smart phones, which have higher monthly fees.

Like it or not, T-Mobile was keeping cell phone plans affordable and in the process making the big boys like Verizon. AT&T and Sprint play down to its level.

According to a report in December 2010 by Consumer Reports, AT&T was rated as the worst cell phone carrier in the nation.  But consumer rating matter none to AT&T, as long it is the country’s leading cell phone carrier.

Now, on to consumers having only two cell phone carriers to choose from in the future.  AT&T plan to purchase T-Mobile will open the conversation once again about who’s going to buy Sprint.  It’s important to note that Sprint had been in talks to buy T-Mobile and then take on the big boys, but the fairy tale ended when AT&T unveiled its plan.

Meaning Sprint’s future may be numbered, unless it antes up and decides to buy up all the small market cell phone providers.  If not, Verizon may swoop in like a hawk and snatch Spring right up.  Verizon may feel the pressure now to buy Sprint just to stay even with AT&T, but Verizon Wireless CEO Daniel Mead said to Reuters ahead of the CTIA Wireless Conference.

“We’re not interested in Sprint. We don’t need them.”

But of course, consumers know better than to trust CEO’s.  And for current Sprint customers be wary of what’s to come next.  If Verizon is indeed not interested, there are other big boys, such as Comcast, and Google to name a few.

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Categories: Uncategorized

And then there were three

News broke on Sunday that AT&T has unveiled a plan to buy T-Mobile for a reported $39 billion.  The move would make AT&T the largest cell phone carrier in the nation with 130 million customers surpassing Verizon Wireless’ 102 million.  According to a report in the Huffington Post by combining companies AT&T will now serve about 43 percent of the U.S. cellphones.

AT&T’s chess move to be the nations leading cell phone carrier spells trouble for consumers, as there could be a ripple effect down the line.

T-Mobile had been aggressive in offering lower prices for their voice and data plans in order to compete with the likes of AT&T, Verizon and Sprint but with the merger there will only be 3 cell phone carriers in the nation.  What guarantee do current T-Mobile customers have that AT&T won’t raise prices?  With less cell phone carriers in the nation the big companies, Verizon and AT&T can raise prices knowing consumers have no other choice.

“We know the results of arrangements like this – higher prices, fewer choices, less innovation,” said Public Knowledge president Gigi Sohn in the same Huffington Post report.

AT&T CEO Randall Stephenson said in the same article that one of the goals of the acquisition would be to move T-Mobile customers to smart phones, which have higher monthly fees.

Despite being rated as the worst cell phone carrier by Consumer Reports in December 2010, AT&T may have started a wave of change.

It’s important to note that Sprint had been in talks to buy T-Mobile and then take on the big boys, but the fairy tale ended when AT&T unveiled its plan

Perhaps AT&T took it to heart when T-Mobile started ripping them on television.

Categories: Uncategorized

Higher education should remain top priority

The drastic Texas deficit estimated to be somewhere between $15 and $30 billion has legislators looking to cut funding for higher education and it’s a move that could potentially harm the future of the Texas economy.

If legislators truly want to cut down this deficit, cutting funding is not the way to go about it.  The only result of that will be fewer students in colleges, less graduates earning degrees and ultimately less of the Texas public in the work force.  Meaning the Texas economy will suffer from it.  Less people with jobs equal less spending to circulate the Texas economy.

The easy solution would be to raise tuition to supplement the loss of state funding, but raising tuition is the equivalent of less state funding.  The problem is students are finding it tougher to pay for their college education.  Federal grants and financial aid has been declining and further impacts will happen to students in need of financial help.

The question then becomes, how do legislators avoid cutting funding to higher education, while at the same time making the necessary budget cuts?

Governor Rick Perry does have an ace up his sleeve in the form of the Rainy-Day Fund, which is ripped and ready to be devoured given the current economic status of the state’s budget crisis.

As it stands the Rainy-Day Fund, or as it’s better known, the Economic Stabilization Fund, is estimated to be about $9.4 billion.

There is no dire need to spend the entire fund, but simply half or at the very least one-fourth of it, roughly $2.35 billion.  This will ensure that higher education continues to progress and be able to compete on a national level.  If only Governor Rick Perry would see it that way.

Perry has publicly stated that Texas must protect the Rainy-Day Fund.

 

His reasoning is the fund should be used to handle bigger emergencies.  I guess cutting out higher education is not a big emergency to our governor.  And if the governor has enough support behind him, the Rainy Day fund will not see the light of day anytime soon.

Which leaves funding for higher education on the cutting table and on the way out.

 

 

 

 

Categories: Uncategorized