Free Press today blasted any efforts by T-Mobile US, Inc., and Sprint Corp. to merge, saying that it would be bad for consumers and “motivated by pure greed.”
Reuters reported today that the companies are nearing an agreement on “tentative terms” of a deal that would give Deutsche Telekom AG, which owns T-Mobile, a majority stake in the combined entity. SoftBank Corp., which owns Sprint, would have a 40% to 50% share. But the Reuters story, citing anonymous sources, said that “talks may still fall through.”
In a news release today, Free Press said that “T-Mobile’s resurgence in particular was driven by infusions of cash and spectrum following the FCC’s rejection of the AT&T/T-Mobile merger in 2011. Sprint too has made a concerted effort to improve its network and compete on price, following the Obama FCC reportedly signaling in 2014 that it would reject any deals that reduced the number of nationwide wireless carriers from four to three.”
“No one but Donald Trump’s pals on Wall Street wants to see this competition-killing, investment-killing and job-killing merger,” said Free Press Policy Director Matt Wood. “There is no rational justification for T-Mobile to take over Sprint and remove yet another consumer choice from the marketplace. It’s motivated by pure greed and a desire to reach deeper into people’s wallets.
“What’s obvious about the wireless market is that customers benefit most when the government has the wisdom to block such mergers,” Mr. Wood added. “Competition driven by the smaller carriers is finally starting to pay off for consumers, but this merger would halt all that. As separate entities, T-Mobile and Sprint have exerted important competitive pressures on the wireless market, pushing each other and AT&T and Verizon to do things they otherwise wouldn’t — like once again offering uncapped data plans and dropping burdensome contract requirements.”
Mr. Wood continued, “The competition between T-Mobile and Sprint is particularly important for lower-income families who favor these carriers over AT&T and Verizon. Many people in these households rely on mobile as their only internet connection. If T-Mobile and Sprint merge, prices will spike and the digital divide will widen. The legal standard for approving giant mergers like this is not whether Wall Street likes it. Communications mergers must enhance competition and serve the public interest. This deal would do just the opposite: It would destroy competition and harm the public in numerous irreversible ways. So unless Ajit Pai wants his tenure at the FCC to go down as the worst for consumers in the agency’s 83-year history, the chairman should speak out and show us he’s willing to do more than rubber-stamp any harmful deal that crosses his desk.”
Meanwhile, the National Association of Broadcasters said in an ex parte filing yesterday in GN docket 12-268 and other dockets that the FCC “should look closely at how T-Mobile’s possible merger with Sprint may impact how the Commission approaches repacking.”
T-Mobile, which was the largest wireless bidder in the FCC’s incentive auction and has begun activating its new 600 megahertz band spectrum, had no comment today on NAB’s suggestion.
“As NAB has made clear in recent months, it is not currently asking the Commission to alter its 39-month repacking deadline. T-Mobile, however, continues its repetitive advocacy regarding the need to maintain the deadline,” NAB also said. “Ironically, T-Mobile’s constant concern about maintaining the current 39-month timeframe demonstrates that T-Mobile has little or no confidence that the deadline will be met.” —Paul Kirby, email@example.com