A lot of the commentary, complaints, and denunciations about the AT&T plan to buy T-Mobile begins with the assumption that fewer players in a market automatically means less competition and therefore greater customer victimization. That assumption is fundamentally wrong.
Real capitalism is summed in the image of two dogs with one bone. The dogs do not live in Mr. Rogers' Neighborhood. They do not believe in sharing. Sharing is bad. Having the whole thing is good. And they'll fight to get it.
Increased "concentration" in a market -- fewer companies competing for customers for a specific good or service -- is not inherently anti-competitive. In fact, it can be a sign of greater competition: the stakes are higher for the fewer participants, so they compete more fiercely.
I sure hope that's what happens with AT&T, Verizon Wireless, and Sprint-Nextel. Okay, that's three dogs but my point still stands.
And that's not taking into account smaller, often regional wireless carriers. Most mobile subscribers stay in one place or move between two places: home and work, and an occasional vacation to DisneyWorld or Cape Cod or the Grand Canyon. As a result, the vast majority of mobile subscribers don't need a nationwide network. They just need a network that works really well where they live and work. One that offers a selection of phones that lets them choose what they want from that group; and offers service plans, and "value," at a price the subscribers are willing to pay.
If anything, the regional carriers can be smarter, faster, more response, and more ruthless than the nation-wide Big Three. That is going to be fun to watch.
They don't even face the same kind of daunting capital investments that the big carriers face. That's partly because smaller-scale base stations - in a variety of sizes - are making network deployments far more affordable, flexible, and effective than the traditional voice-oriented macro-cells that are still the basis of the networks from Verizon, AT&T, and Sprint. At the CTIA conference this week in Orlando, several vendors are offering new small base stations with integrated wireless backhaul, making them even faster and cheaper to deploy and to run.
Less choice? Choices are inherently limiting, and the idea that having as many phones to select from as breakfast cereals or paper towels is not something that consumers are demanding.
Here's to the concentrating cellular industry: may the most ruthless dog win.