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CNN Live Sunday

Cingular, AT&T Wireless Announce Merge

Aired February 22, 2004 - 16:2   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


FREDERICKA WHITFIELD, CNN ANCHOR: Now that two of the nation's largest mobile phone companies are planning to merge into the largest one, will the marriage of Cingular and AT&T Wireless survive federal antitrust scrutiny? And if it does, what will it do to your rates and your service? Chris Murray is a legislative counsel for Consumers Union and he's in Washington joining us now. Go to see you, Chris.
CHRIS MURRAY, CONSUMERS UNION: Thanks for having me again.

WHITFIELD: All right, so these two big power companies, they've had criticisms in the past about their technology, about the service. With AT&T and Cingular coming together does that mean a lot of these problems are going to be solved?

MURRAY: That's a good question. I'm not sure it follows that if you take two companies that do have customer service near the bottom of the barrel that that combination is actually going to improve service for consumers. We certainly hope that it might, but I'm not sure that's the result here.

WHITFIELD: So, why is it happening?

MURRAY: Well, the whole theory of this marketplace is that there's quote, "too much competition in the wireless marketplace." And I'm not quite sure that that's the case. We do have six national carriers that will go down to five here. But the big concern is not just that we're losing one of those six. It's that here, we've got the No. 2 and the No. 3 carriers combining and in a lot of local markets, it's not just going to be two and three, it's going to it be maybe the first -- the dominant carrier as well as the third carrier, and maybe the first and second. So that has huge anti-trust questions around it.

WHITFIELD: So that means it's giving consumers fewer options, which also sounds like folks will have fewer choices in which to shop around to get the best buy. Does this mean automatically that many of us are going to be spending more automatically to get service?

MURRAY: We're fearful that that's the result here. In a lot of these markets, like I said, this is not just going to be the second and third carriers that we're going to combine into one, but it's going to be make the first and second. And it's going to be a combination that also involves the dominant local telephone monopoly.

Remember that SBC and Bellsouth are of the parent companies -- they backed the venture that's Cingular. And so we were very hopeful that wireless would actually compete for local telephone service, and I think that the net result of this deal is that we see less, not only wireless competition, which means higher prices, but less competition to local telephone service.

WHITFIELD: Hmm. In some of those jurisdictions where perhaps they'll have maybe three or even four service providers to choose from, is it likely people will start getting an awful a lot of calls, or seeing more advertisement about you want to shop with us? You want to come our way? Because we can offer a better deal than the Cingular/AT&T new conglomerate?

MURRAY: I'm hopeful that as the market goes fluid and people are chasing customers down that there will be better deals that consumers will get in the very short term. But I'm fearful, again, that in the medium term what we'll see is higher prices. Because, after all, that's what shareholders are asking for here is less cutthroat competition, which may not be good for shareholders, but it's certainly been good for consumers in the wireless marketplace so far.

WHITFIELD: Well, it doesn't sound like a whole lot of recourse is being offered to consumers outthere?

MURRAY: Recourse in what sense?

WHITFIELD: Terms of if everything's -- it's likely, your prediction, that the prices will go higher and people have fewer choices in which to you know, look into, they really kind of are left with few options?

MURRAY: Well, and that is why we will be opposing this merger with respect to those markets where there's going to be really excessive concentration, where it's going to be the first and second wireless carrier, or where it's going to involve the dominant local telephone monopoly, offering a bundle to consumers that nobody else can match. And I think in the long run that shuts out competition.

We're believers in the fact that the way you preserve consumer choice is through competition in the marketplace. And so we think that this market can sustain the six carriers it has now and we're hopeful we'll see lots and lots of competition going forward.

WHITFIELD: All right. Chris Murray, thanks very much.

MURRAY: Thanks for having me.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired February 22, 2004 - 16:2   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDERICKA WHITFIELD, CNN ANCHOR: Now that two of the nation's largest mobile phone companies are planning to merge into the largest one, will the marriage of Cingular and AT&T Wireless survive federal antitrust scrutiny? And if it does, what will it do to your rates and your service? Chris Murray is a legislative counsel for Consumers Union and he's in Washington joining us now. Go to see you, Chris.
CHRIS MURRAY, CONSUMERS UNION: Thanks for having me again.

WHITFIELD: All right, so these two big power companies, they've had criticisms in the past about their technology, about the service. With AT&T and Cingular coming together does that mean a lot of these problems are going to be solved?

MURRAY: That's a good question. I'm not sure it follows that if you take two companies that do have customer service near the bottom of the barrel that that combination is actually going to improve service for consumers. We certainly hope that it might, but I'm not sure that's the result here.

WHITFIELD: So, why is it happening?

MURRAY: Well, the whole theory of this marketplace is that there's quote, "too much competition in the wireless marketplace." And I'm not quite sure that that's the case. We do have six national carriers that will go down to five here. But the big concern is not just that we're losing one of those six. It's that here, we've got the No. 2 and the No. 3 carriers combining and in a lot of local markets, it's not just going to be two and three, it's going to it be maybe the first -- the dominant carrier as well as the third carrier, and maybe the first and second. So that has huge anti-trust questions around it.

WHITFIELD: So that means it's giving consumers fewer options, which also sounds like folks will have fewer choices in which to shop around to get the best buy. Does this mean automatically that many of us are going to be spending more automatically to get service?

MURRAY: We're fearful that that's the result here. In a lot of these markets, like I said, this is not just going to be the second and third carriers that we're going to combine into one, but it's going to be make the first and second. And it's going to be a combination that also involves the dominant local telephone monopoly.

Remember that SBC and Bellsouth are of the parent companies -- they backed the venture that's Cingular. And so we were very hopeful that wireless would actually compete for local telephone service, and I think that the net result of this deal is that we see less, not only wireless competition, which means higher prices, but less competition to local telephone service.

WHITFIELD: Hmm. In some of those jurisdictions where perhaps they'll have maybe three or even four service providers to choose from, is it likely people will start getting an awful a lot of calls, or seeing more advertisement about you want to shop with us? You want to come our way? Because we can offer a better deal than the Cingular/AT&T new conglomerate?

MURRAY: I'm hopeful that as the market goes fluid and people are chasing customers down that there will be better deals that consumers will get in the very short term. But I'm fearful, again, that in the medium term what we'll see is higher prices. Because, after all, that's what shareholders are asking for here is less cutthroat competition, which may not be good for shareholders, but it's certainly been good for consumers in the wireless marketplace so far.

WHITFIELD: Well, it doesn't sound like a whole lot of recourse is being offered to consumers outthere?

MURRAY: Recourse in what sense?

WHITFIELD: Terms of if everything's -- it's likely, your prediction, that the prices will go higher and people have fewer choices in which to you know, look into, they really kind of are left with few options?

MURRAY: Well, and that is why we will be opposing this merger with respect to those markets where there's going to be really excessive concentration, where it's going to be the first and second wireless carrier, or where it's going to involve the dominant local telephone monopoly, offering a bundle to consumers that nobody else can match. And I think in the long run that shuts out competition.

We're believers in the fact that the way you preserve consumer choice is through competition in the marketplace. And so we think that this market can sustain the six carriers it has now and we're hopeful we'll see lots and lots of competition going forward.

WHITFIELD: All right. Chris Murray, thanks very much.

MURRAY: Thanks for having me.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com