The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry. It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage.  In the absence of such steps, customers will be harmed and needed investment will be stifled.

 
AT&T’s agreement with T-Mobile parent Deutsche Telekom requires it to fork over $4 billion in penalties, which probably doesn’t make AT&T any less cranky.I’m glad that the merger didn’t happen, simply because I don’t want to see AT&T and Verizon share a wireless-industry duopoly. The continued existence of T-Mobile USA in some form–it may well be bought out by someone else–helps prevent that eventuality. I wonder what AT&T’s backup plan is, and whether we’ll even remember this non-merger five or ten years from now?

During a media call Tuesday afternoon FCC representatives (who insisted on remaining anonymous) said that Chairman Julius Genachowski has asked fellow commissioners to review a proposal that the merger be subject to a hearing after finding aspects of the proposed deal that don’t line up with the public interest. One representative called the merger a unique concentration in market power in almost every single one of the top 100 local markets in the U.S., and also said that AT&T’s claims that the merger will allow more Americans access to 4G wireless (AT&T’s primary selling point) and create new jobs did not hold water.

If the hearing happens, it’ll only begin after the Department of Justice concludes a trial over the proposed merger that isn’t due to start until February. So it could be a long, long time until the deal gets a definitive yay or nay–and you’ve got to wonder at what point AT&T and T-Mobile decide that it’s best to give up and begin the rest of their lives as competitors. (AT&T wants T-Mobile so it can beef up its 4G, but it must have a backup plan, and it can’t postpone it forever.) 
 
For me, the prospect of the merger has always been pretty simple. Smaller wireless companies, like T-Mobile, Sprint, and regionals like MetroPCS and Cricket have lower prices and more creative plans. The two giants, AT&T and Verizon Wireless, have higher prices and less flexibility. I don’t see any scenario under which removing one smaller player from the equation improves things for consumers–and that’s why I’ll be happy if the merger falls apart, as it’s now looking like it will.

I’m not an expert on the economics of telecommunications competition. But I keep coming back to this: The two wireless companies that have been the most aggressive on pricing and the most creative with plans have been T-Mobile and Sprint. The (relatively) small players, not the giants. Is that a coincidence? What are the chances that eliminating one of them would lead to lower prices and more options?

There are a few requirements: you need to be a new customer (obviously), and the device needs to be fully functional and in good condition — free of either water or corrosion damage. In order to trade the device in, the consumer needs to visit a retail location.

In partnership with The Wireless Source, representatives have a list of values for current devices. The payment for the device comes in the form of a mailed check, so the savings on a T-Mobile device aren’t instant, infortunately unfortunately.

T-Mobile’s deal certainly seems good, but I think I’d echo most people’s concerns that one would have to wait for a mailed check rather than instant payment much like Radio Shack has begun to do. What happens if The Wireless Source doesn’t think the device is in good enough condition? Do you get it back? We really don’t have an answer to that.

[Hat Tip: TMoNews]

Entrants must upload a 15-second video to T-Mobile’s Facebook page, explaining why they are ultimate gamers and should therefore be chosen as an E3 “correspondent” for the company (i.e., play lots of video games before they’re released). The top prize, aside from the trip to Los Angeles, includes LG’s G2x Android phone.

Without reading into this too much, I think it’s interesting that a wireless carrier is taking such a keen interest in E3. This, combined with other signs, make me think smartphones could finally have a strong showing at the trade show.

Consider these other factors that make smartphones more relevant for E3 2011 than any other year:

• Sony Ericsson has launched the Xperia Play gaming phone, and Sony has grander plans to open a game store on Android phones this year.
• Windows Phone 7 launched in October with Xbox Live integration. Microsoft has slowly started tying WinPho games back to the Xbox 360.
• Nvidia has made a huge mobile push with its Tegra 2 processor, which appears in several Android-based smartphones and tablets. The company has a booth at the show, and I doubt graphics cards will be the only things on display.
• Major publishers and developers have moved from cheap cash-ins to legitimately good mobile games, and they’ve done so instead of supporting  the PSP or Nintendo DS. Examples include EA’s Dead Space, id’s Rage and Epic’s Infinity Blade.

There will always be pieces of the smartphone gaming biz missing from E3. Apple won’t be there, nor will countless small-time developers who provide the content. But if I don’t see dozens of iPhones, Android phones and Windows Phones lining the booths of the Los Angeles Convention Center, I’ll be shocked — and a little disappointed.

Originally, the service (called “Isis”) was to bypass the traditional credit card companies altogether: charges would appear directly on consumer’s cellular phone bills. The abrupt 180 may be due to ensuring Isis has any chance of success — leveraging the power of Visa and MasterCard could go a long way.

Discover was originally the key partner in the effort, but its market share–only 3.3 percent share of credit card transactions–likely gave retailers pause on dealing with the group. (85 percent of all credit transactions processed through Visa or MasterCard.)

Isis says that Discover remains a partner, but it was open to including other partners. It remains to be seen though if it ever gets off the ground now, since the carriers now have no way of making money off the venture — the whole point of it in the first place.

This could be interesting to watch — considering that Sprint is developing its own network, Google’s testing its own system, and Microsoft is working with Verifone to bring NFC to Windows Phone. It’s a busy time for NFC, and nobody wants to get left behind.

With these actions, the merger review now has no timetable for completion — which means AT&T and T-Mobile’s stated goal to get the review completed within a year could be in serious jeopardy. It also highlights the complexity of the situation, and how difficult it might be for the deal to win approval.

Neither T-Mobile nor AT&T are commenting on the DOJ’s decision — anything they say could be used against them. But with the fact of the matter being that the merger significantly limits competition in many markets, the decision is probably a good thing.

I know AT&T especially has been fond of saying how most markets have “five or more” wireless competitors. In most cases, however, the only truly worthwhile ones are the big four. So using that as a reason to approve the merger seems to ring just a bit hollow for me.

Ultimately, I’m in favor of the merger happening, if the right restrictions are imposed–T-Mobile customers really do stand to gain far more (especially in the service department) than they would lose. But our regulators should take the time to ensure that an AT&T-Mobile won’t end up doing more harm than good.

I know some of our readers have some very strong opinions against this, and I’m sure we’ll see more of them in the comments to this story. I invite the discussion, which I’m sure similar ones are occurring in the halls of the DOJ’s antitrust division right now.

Called Bobsled by T-Mobile (don’t ask, I have no clue why they settled on this name), the application for both PC and Mac gives users the capability to place free VoIP calls between Facebook friends, including integration with the Facebook chat system. The application is free to all Facebook users and is not exclusive to subscriber’s of T-Mobile’s wireless services.

If you wish, you can also use Bobsled to leave voice messages, which you will have the choice of sending to your contact privately or post to that friend’s wall. Imagine all the people singing Happy Birthday rather than writing it —although I don’t know if that’s a good thing.

Facebook is only the first outlet for T-Mobile’s renewed VoIP strategy. The company says it has plans to eventually allow calling to landline and wireless numbers, as well as creating applications for tablets and smartphones regardless of carrier.

Could the T-Mobile brand be positioning itself for a life post-AT&T merger? Who knows, but it’ll be interesting to watch.