AT&T’s proposal to takeover T-Mobile has troublingly vague language

April 21, 2011 | by Michael Heller

AT&T, T-Mobile


AT&T finally released their proposal for their takeover of T-Mobile. It’s an extensive document, which has a lot of interesting information redacted for confidentiality reasons, but there are a couple bits that make for interesting reading. Especially the bits about how AT&T will handle T-Mobile customer rate plans. The most relevant section of the release states:

The transaction will enhance the diversity of rate plans available to T-Mobile USA customers.  Consumers who are happy with their T-Mobile USA rate plans will be able to keep them, so they will enjoy the benefits of improved service quality and thus a lower quality-adjusted price… To be clear, consumers will not have to make any changes to their T-Mobile USA services or devices upon the close of this transaction… The transaction merely gives them the highly valuable option to take advantage of more advanced service technologies, a broader range of devices, and additional rate plans.

So, the wording here could lead in two different directions. A more optimistic reading is that AT&T will give T-Mo customers full access to their network, data, etc, and that the “more advanced service technologies” that customers would gain if they switched to an AT&T plan would include things like rollover minutes, mobile-to-mobile calling, etc.

A more pessimistic reading would mean that T-Mobile customers won’t be forced to give up their rate plan, but that rate plan will not have access to the full power of the AT&T network. Since the current T-Mo rate plans have stipulations for amount of minutes and data, this could mean that T-Mobile customers would face throttled data speeds and possibly reduced call quality (though I’m not sure how much lower the AT&T call quality can get.) Of course, to get the better quality service, T-Mo customers could always sign up to a new deal at a premium price. The vague phrase that T-Mo customers will have the “option to take advantage of more advanced service technologies” is what worries me the most. There are all sorts of tricks that could be hidden within that phrase, including, but not limited to: throttled data speeds, lower call quality, restricted features (such as tethering/hotspot, etc.), and much more.

The document is careful to use the term “rate plan” and not get into the distinction between contract and n0n-contract customers. Theoretically those of us on non-contract plans will be able to stay on those deals, but those rate plans are even cheaper, so that may mean even lower quality on AT&T’s new sliding scale.

The proposal also states that the deal will allow AT&T to deploy it’s LTE network to 97% of Americans, which would be incredible if it comes to pass. But, again, there is a pessimistic and optimistic way to look at that as well. There’s no guarantee that if you keep your T-Mo rate plan, that you’ll be able to access that network, since T-Mo’s “4G” is not LTE, and so won’t be explicitly covered in rate plan agreements.

The good news stands, T-Mobile customers will be able to keep their rate plans and devices, or keep their plans and get new devices. The trouble is in those vague statements. We’ll have to see if AT&T will clarify.

Ars Technica