The T-Mobile-Sprint Merger Is Scrambling Telecom Politics – WIRED

26
137
The T-Mobile-Sprint Merger Is Scrambling Telecom Politics – WIRED

US representative Anna Eshoo (D-California) says AT&T and Verizon effectively dominate the wireless market, and as a result, “Americans pay some of the highest prices for mobile wireless service in the developed world.”

Celeste Sloman/Redux

Representative Anna Eshoo (D-California) has sparred with the telecommunications industry over issues like net neutrality and privacy over the years. Wednesday, however, she came out swinging in support of T-Mobile and Sprint.

Eshoo spoke at a hearing of the House Energy and Commerce Committee on T-Mobile’s proposed $26.5 billion acquisition of Sprint, announced in April 2018. If approved, the deal would reduce the number of major carriers in the US from four to three. But Eshoo argued that that’s the wrong way to look at it.

“This is hardly a competitive, dynamic market that we have,” she said, noting that AT&T and Verizon together control two-thirds of the market for mobile service and have done so for many years. “For all intents and purposes we have a duopoly in the country. Americans pay some of the highest prices for mobile wireless service in the developed world.” Eshoo argued that allowing T-Mobile and Sprint to merge would enable the combined company to compete more aggressively with AT&T and Verizon.

The proposed T-Mobile–Sprint deal is scrambling the politics of telecom mergers, which Democrats traditionally have viewed more skeptically. In 2011, the Obama Justice Department sued to block AT&T’s proposed acquisition of T-Mobile, and the Democrat-led Federal Communications Commission effectively nixed a previous merger attempt by T-Mobile and Sprint in 2014. This time around, the carriers are getting more sympathy from Democrats. Last month, six other Democrats joined Eshoo and six Republicans in a letter to the FCC and the Justice Department supporting the merger, arguing the combined company would be able to deploy the next generation of wireless services, known as 5G, more quickly than the two companies could independently. T-Mobile hired former FCC commissioner Mignon Clyburn, a Democrat and staunch defender of net neutrality, to advise the company on the merger. “I’m advising T-Mobile and Sprint as it seeks to accelerate the creation of an inclusive nationwide 5G network on how to best build a bridge across the digital divide,” Clyburn told Politico this month.

Critics of the deal don’t buy those arguments. Phillip Berenbroick, of the advocacy group Public Knowledge, pointed out that some of the claims the two carriers now make about 5G echo those made by AT&T and T-Mobile about 4G in 2011. When AT&T first announced its agreement to buy the smaller carrier, it claimed T-Mobile did “not have a clear path to delivering” 4G. Ultimately, T-Mobile built a 4G network that rivals networks from the big two in speed and reach, according to OpenSignal; it also turned profitable. The US led the world in 4G adoption, according a report commissioned by the wireless industry group CTIA last year.

Since the AT&T deal died in 2011, T-Mobile has simplified its pricing, done away with annual contracts, and rushed past Sprint to become the nation’s third-largest carrier, forcing other carriers to adjust their own pricing and contracts along the way. It’s a rare bright spot for competition in the telecommunications industry, which has grown ever more consolidated. Over the years, the seven “Baby Bells” created by the breakup of the original AT&T in 1982 have recombined into three companies: AT&T, CenturyLink, and Verizon. Other parts of the telecommunications industry have consolidated as well, with Sprint buying Nextel in 2004, Verizon buying MCI in 2006 and XO in 2016, and CenturyLink buying Level 3 in 2016.

LEARN MORE

The WIRED Guide to 5G

Rather than try to reverse or halt this consolidation, Eshoo argues, the best way to preserve competition is to allow even more consolidation, otherwise smaller companies will be crushed by the giants. Groups that represent carriers smaller than Sprint or T-Mobile disagree. Carri Bennet of the Rural Wireless Association said Sprint is the only major carrier that offers rural carriers affordable roaming rates. “According to our members, T-Mobile’s roaming rates are 20 times higher than Sprint’s,” she said. She also claimed T-Mobile refuses to enter into agreements that would enable T-Mobile customers to roam on rural networks, and pointed to an FCC investigation last year that found that T-Mobile had failed to connect many calls to rural networks and played fake ringtones to cover up the failure, leading customers to believe that a call had gone through unanswered. “We believe T-Mobile’s destructive behavior will continue, perhaps even more aggressively, once its rival, Sprint, is eliminated,” she said.

T-Mobile CEO John Legere promised multiple times during Wednesday’s hearing that the combined companies would lower prices if the deal is approved. But the industry group Incompas, which Sprint cofounded in 1981, came out against the deal in a statement Tuesday ahead of the hearing, pointing out that even if T-Mobile didn’t raise prices for its consumers, it might raise wholesale prices for resellers. “T-Mobile and Sprint have been important soldiers in these battles for more competition,” Incompas CEO Chip Pickering said. “While I understand their desire to wed, I believe consumers want them to keep playing the field.” Shortly after the statement, Sprint announced that it was leaving Incompas.

Even if critics of the deal can persuade the House to oppose the deal, there’s little Congress can do. The merger’s fate is in the hands of the Justice Department and the FCC. Attorney general nominee William Barr has a long history of favoring telecom consolidation, and the FCC’s Republican majority has generally sided with the industry.

But that’s still no guarantee for the merger. In a surprise move last year, the FCC shot down Sinclair Broadcasting’s proposed acquisition of the Tribune Company, which would have combined two of the nation’s largest TV station owners. And Justice Department antitrust chief Makan Delrahim tried to block AT&T’s acquisition of Time Warner.


More Great WIRED Stories

26 COMMENTS

  1. Thanks a lot for sharing this with all of us you actually know what you’re talking about! Bookmarked. Kindly also visit my site =). We could have a link exchange contract between us!

  2. I just want to tell you that I am newbie to blogs and truly enjoyed this web site. Probably I’m going to bookmark your blog post . You certainly have exceptional well written articles. Cheers for sharing your web-site.

  3. I have been absent for a while, but now I remember why I used to love this website. Thank you, I¡¦ll try and check back more frequently. How frequently you update your website?

  4. Hi there! I know this is kind of off topic but I was wondering if you knew where I could get a captcha plugin for my comment form? I’m using the same blog platform as yours and I’m having problems finding one? Thanks a lot!

  5. Great – I should certainly pronounce, impressed with your site. I had no trouble navigating through all the tabs and related info ended up being truly easy to do to access. I recently found what I hoped for before you know it in the least. Reasonably unusual. Is likely to appreciate it for those who add forums or anything, web site theme . a tones way for your customer to communicate. Nice task.

  6. Thank you for this article. I’d also like to mention that it can always be hard while you are in school and simply starting out to create a long credit score. There are many students who are simply trying to survive and have a lengthy or favourable credit history can often be a difficult point to have.

  7. Psychological focal point, training, likability, aspect, calm yet rely on. However these are some of the items Tang Soo Use, your current Mandarin chinese style created by self defense, can show we and additionally instilling in your soul the power not only to fight you and your family about the craft the very first hazards signs in conflict altogether.

  8. Faytech North America is a touch screen Manufacturer of both monitors and pcs. They specialize in the design, development, manufacturing and marketing of Capacitive touch screen, Resistive touch screen, Industrial touch screen, IP65 touch screen, touchscreen monitors and integrated touchscreen PCs. Contact them at http://www.faytech.us, 121 Varick Street, New York, NY 10013, +1 646 205 3214

  9. Sapid Agency is a Search Engine Optimization company in New York City that provides SEO Services. Their proprietary SEO strategies help struggling websites and aspiring business owners to rank their websites higher in multiple search engines like Google , Yahoo and Bing. They provide local and gmb map ranking for businesses in NYC and many other local areas. Find more at https://www.sapidagency.com/ @ 145 E 57TH NEW YORK, NY 10022, USA, +1 971 341 5608 USA

  10. One other thing is that an online business administration study course is designed for students to be able to easily proceed to bachelor’s degree courses. The Ninety credit certification meets the other bachelor education requirements when you earn the associate of arts in BA online, you will get access to the most up-to-date technologies within this field. Some reasons why students are able to get their associate degree in business is because they may be interested in this area and want to have the general instruction necessary in advance of jumping in a bachelor college diploma program. Many thanks for the tips you actually provide in the blog.

  11. I just want to show you that I am new to having a blog and completely admired your post. Likely I am inclined to bookmark your blog post . You really have outstanding article material. Appreciate it for share-out with us your current site write-up

  12. Spot on with this write-up, I really think this website needs way more consideration. I’ll most likely be again to learn way more, thanks for that info.

  13. I’m more than happy to discover this site. I want to to thank you for your time for this fantastic read!! I definitely loved every part of it and i also have you book-marked to see new information on your site.

  14. Hi! This is my first comment here so I just wanted to give a quick shout out and say I really enjoy reading through your blog posts. Can you suggest any other blogs/websites/forums that cover the same topics? Thanks a ton!

  15. Pretty nice post. I simply stumbled upon your blog and wished to say that I’ve really enjoyed browsing your weblog posts. After all I will be subscribing on your rss feed and I am hoping you write once more soon!

  16. Fascinating blog! Is your theme custom made or did you download it from somewhere? A design like yours with a few simple adjustements would really make my blog jump out. Please let me know where you got your theme. Cheers

LEAVE A REPLY

Please enter your comment!
Please enter your name here