5 biggest myths (and lies) about the AT&T/T-Mobile deal

The Federal Communications Commission's damning report about AT&T's proposed bid for T-Mobile accuses the wireless carriers of lies and exaggerations.

Prices would fall
Prices would fall

The claim: In its public statement about its merger proposal with T-Mobile, AT&T said prices would fall as a result of the companies combining. The combined company would have more capacity for customers' wireless needs, and could therefore charge lower prices, AT&T suggested.

AT&T also claimed that T-Mobile customers would be forever protected from price increases, because AT&T would agree to honor their current contracts for an unlimited time.

The response: The FCC said it in its staff report that its analysis suggests prices would instead rise if the merger were completed, since AT&T would eat the cheapest national carrier.

Eliminating T-Mobile's competitive price points would also give Verizon and Sprint incentive to raise prices, causing pain in the wallet for the majority of cell phone customers. The FCC called T-Mobile a "disruptive force" in the mobile marketplace that keeps competitors' prices in check.

The regulator also say that it's unlikely T-Mobile customers will remain on their current contracts forever. When they want a new phone, or if they want to upgrade their plan, they'd eventually have to switch. And since everyone else's plans would become more expensive, current T-Mobile customers would have to make the unhappy choice of sticking with old technology or paying a higher price to upgrade than they would have if the merger had never taken place.


By David Goldman @CNNMoneyTech - Last updated December 01 2011: 6:07 AM ET
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The Federal Communications Commission on Tuesday blasted AT&T, accusing the telecom giant of lying about the benefits of its proposed merger with T-Mobile.

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