A major concern for regulators will be whether prices for voice and data will go up. Gold said it is "highly likely" that prices will increase, because less competition means higher prices. Gold was joined by number of consumer advocacy groups, including Free Press, who also worry about price increases.
But Redman said the deal creates a bigger wireless commodity service because of more efficient uses of cell towers and other infrastructure that will lower costs. Whether that cost reduction is passed on to consumers might be a matter for debate, but AT&T is already making a case that in prior mergers it has passed on efficiencies to customers by lowering rates.
In supporting materials, AT&T noted that wireless prices across all carriers declined by 50% from 1999 to 2009 during at least five major carrier mergers. Citing U.S. government labor statistics, AT&T noted that wireless costs dropped from about 73 on the Consumer Price Index in 2000 to about 61 on the CPI at the end of 2010, which is not quite the 50% that AT&T noted, but still a decline.
The five mergers include the February 2004 merger of Cingular into AT&T Wireless. In 2000, SBC Communications and BellSouth merged to form Cingular.
Hays said that even though he believes the takeover would "have little overall impact on prices for U.S. customers," the FCC or DOJ could impose restrictions on the deal, such as limits on price increases for several years. He also suggested that regulators might require the combined entity to eliminate exclusive deals on the latest devices, such as AT&T's earlier deal to sell the iPhone.
With the intense regulatory scrutiny, Hays gave the deal a 50-50 chance of being approved. Other analysts see a higher likelihood of approval, but only after an exhaustive review.
The government review process is the biggest unknown and leaves customers and pricing at a draw from this deal.
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