By Megan Stoker
The Federal Communications Commission announced its approval for a merger between AT&T and Cingular Wireless Tuesday, clearing the way for the two giant cell phone companies to join forces.
Cingular and AT&T will join to become the nation''s largest cell phone company following the $41 billion acquisition by Cingular, and will soon serve more than 47 million customers between the two parent companies.
Verizon Wireless, the nation''s current top cell phone company with 40 million customers, will drop to the second place spot behind the new Cingular/AT&T Company.
According to AT&T representatives, the merger is good news for local cell phone users.
'For local consumers is just going to improve things,' said Landon Nelson, a communications specialist for AT&T. 'Obviously in Utah County we''re having struggles with the Cingular network, but is going to improve the system and make it better than ever.'
However, opponents to the merger said they think it will only harm existing customers.
According to a press release on the Consumer''s Union Web site, ' spells bad news for consumers, who ultimately can expect higher prices and diminished service as fewer companies compete for their business.'
According to the Consumer''s Union, customers can expect three main outcomes from the merger: price hikes, a lack of competition and future mergers between other cell phone giants.
AT&T, however, assures customers that they will not see a rate change unless they chose to switch to a Cingular plan, and customers will not be forced to change existing plans unless they so desire.
'If are under contract, Cingular is not going to come in and say that they have to change their plan,' Nelson said. 'If they want to change to Cingular they''re welcome to, but we''re not going to force them to do so while they''re still under contract.'
The main concern for AT&T users is that the new Cingular service will not be as effective as existing AT&T plans.
'I''ve had really good service with AT&T, so hopefully it will be a smooth takeover by Cingular,' said Laura Ostler, a junior from Freemont Calif., majoring in media music. 'I''ve just renewed for another year, so I won''t have to worry about it now. Hopefully the service will be pretty established by that time.'
According to the Consumer''s Union Web site the merger establishes a precedent that will be damaging to future business.
'By allowing Cingular to control up to 70 out of 189 megahertz of available spectrum in a market, the FCC is signaling that Verizon can bulk up in the same manner, leaving only enough spectrum for one potential competitor,' the Web site read.
The FCC will require Cingular to divest itself of assets in 11 states and 22 markets to prevent such a monopoly from occurring.
Cingular Wireless is an Atlanta-based joint venture between BellSouth Corp and SBC Communications. To date, Cingular has grown into a multi-billion dollar company with more than $15 billion in sales last year alone and service in 43 of the 50 top U.S. markets. Cingular first started showing official interest in merging with AT&T in early 2003.