Public Knowledge asks the FCC to deny AT&T’s acquisition of Leap Wireless to ensure continued access to a low cost competitor.
Joined by Consumer Action and the Writers Guild, West, Public Knowledge has asked the FCC to deny AT&T’s acquisition of Leap Wireless, most commonly known to the public by its brand, Cricket. Thanks to its value-oriented plans, Cricket is often the wireless carrier of choice for consumers who are traditionally left out of the larger wireless carrier markets. We’ve taken this step to ensure low-income, minority and immigrant communities have continued access to a low cost competitor. AT&T’s acquisition of Leap would also limit available spectrum for smaller, rural, regional, and low-cost competitors and leave the Internet economy vulnerable to harmful business practices.
By preserving Leap Wireless, the FCC would ensure continued access to affordable phone price plans and handsets for consumers. Eliminating this competitor in a shrinking wireless market could potentially harm consumers who rely on pre-paid or pay as you go cell phone plans. In a competitive wireless market, prices stay low, and operators have to work to improve their service and hold on to customers.
AT&T’s interest in acquiring Leap seems to be less about breaking into the prepaid market to serve those consumers and more about obtaining more valuable spectrum. Over the past several years, the major operators have been on a spectrum spending spree, and we believe enough is enough. The more of this essential building block that large operators like AT&T and Verizon acquire, the less is available to the little guys who serve smaller markets.
Consumers also benefit from competition more indirectly. From looking up local restaurants to streaming music and video, accessing services through mobile phones has become increasingly common. When there are multiple wireless providers, no one of them can try to reach up and control what people do online.
But recent comments from major wireless operators suggest that they would like to institute a “1-800-APPS” model, where online services as well as actual subscribers–would pay the operators to ensure their content goes through, or is not subject to some sort of data usage cap.
These harmful practices can reduce the number of choices for services and limit the diversity of voices subscribers have access to — and it is something the FCC can prevent. With less competition, large operators can redesign the rules of the road and drastically reshape how the Internet economy works. Competition, including competition from low-cost and prepaid operators like Leap, helps keep those large operators in check.
That’s why the FCC, which has the power to block this deal, should do so.