What the Sprint/T-Mobile Merger Means for You (Hint: It’s Not Good)

[smix]

What the Sprint/T-Mobile Merger Means for You (Hint: It’s Not Good)
The Greenling Institute

URL: http://greenlining.org/blog/2018/what-t ... s-for-you/
Category: Business
Published: May 2, 2018

Description: As you may already be aware, on Saturday, Sprint and T-Mobile announced their plans to merge—something the two companies have been planning to do for quite a few years now. I’ve been expecting a big communications merger for a while now—my money was on a Comcast/T-Mobile merger, but a Sprint/T-Mobile merger is no big surprise—and this one is huge. By “huge,” I mean really huge—the Sprint/T-Mobile merger would make the new company the second largest wireless company in the country. Additionally, it would reduce the number of nationwide wireless carriers from four to three. That’s a huge cause for concern. You have to evaluate every merger on its own merits, and it’s entirely possible that after we look under the hood and kick the tires, Greenlining will come out in support of this merger. If I had to decide today, however, I’d have to oppose it. The bigger a merger, the more skeptical you should be that the merger will bring benefits, and the more worried you should be that the merger will cause real harms. With a merger this size, reducing competition from four to three, there’s an enormous risk that it will lead to higher prices, worse service quality, and a lot less consumer choice. So if the Sprint/T-Mobile merger ends up being terrible, how likely is it that reviewing agencies will approve it? Well, at the federal level, the answer is pretty grim. Under the leadership of Chair Ajit Pai, the Federal Communications Commission has shifted from being a consumer protection agency to a corporate protection agency. Pai has pretty clearly indicated that industry’s going to get whatever it wants, so the Sprint/T-Mobile merger won’t be the last huge communications merger we see. And at the Department of Justice—the other federal agency that reviews communications mergers—merger enforcement has been, shall we say, inconsistent and unpredictable. So while federal agencies might block a bad merger, I’m sure not holding my breath. As grim as all that may seem, the fight’s far from over. Whether or not the FCC approves the Sprint/T-Mobile merger, the companies still have to convince the California Public Utilities Commission to sign off, which will be a much tougher job. To make a long story short, if this merger is bad, I’m pretty confident we can stop it. You may be thinking, “what can I do to make sure to stop Sprint/T-Mobile merger that’s bad for consumers?” The answer, believe it or not, is “lots.” You don’t have to be an attorney, or have worked on mergers before, or, for that matter, even have to know what a merger is—keep following this blog, and I promise, when the time comes, you will know exactly how to speak out. Watch this space.

[smix]

To Thwart Corporate Greed and Defend Consumers, FCC Called on to Block T-Mobile/Sprint Merger
Common Dreams

URL: https://www.commondreams.org/news/2018/ ... int-merger
Category: Business
Published: May 1, 2018

Description: "Greed and a desire to reach deeper into people's wallets by taking away their choices are the only things motivating this deal."
Sen. Elizabeth Warren (D-Mass.) was among the critics of the newly-proposed merger between Sprint and T-Mobile who called for a thorough investigation into the deal, saying it would further reduce competition in the wireless marketplace and consolidate power in the hands of just three carriers.

The proposed merger between Sprint and T-Mobile could strangle competition in the telecom industry and end up hurting small businesses, entrepreneurs, and working families. @TheJusticeDept and FCC need to give this deal a long, hard look.
— Elizabeth Warren (@SenWarren) May 1, 2018

The deal was reached after numerous past attempts by the two companies to merge, as well as a proposed takeover of T-Mobile by AT&T, which was blocked by the Federal Communications Commission (FCC) in 2011 on the grounds that it would stifle competition. The $26.5 billion deal would give the newly-formed corporation a combined 125 million customers and, according to T-Mobile and Sprint, would enable the entities to create a high-capacity 5G wireless network that could compete with at-home broadband connections provided by cable companies. Groups including Free Press argue that the merger would serve only the interests of the two companies, despite T-Mobile and Sprint's claims that they would merge while increasing hiring and without raising prices—both uncommon for corporate mergers. "No one but T-Mobile and Sprint executives and Wall Street brokers wants to see this merger go through," said Matt Wood, policy director of Free Press, in a statement. "Greed and a desire to reach deeper into people's wallets by taking away their choices are the only things motivating this deal. What we know about the wireless market is that customers actually win when mergers are blocked." As the New York Times Editorial Board noted, the benefits promised by the two companies are "implausible," especially as T-Mobile and Sprint say they plan to cut their costs by $6 billion per year. "T-Mobile is promising that it will continue to operate as a scrappy upstart even after swallowing Sprint, which has struggled to win over customers and is saddled with $32 billion in debt," wrote the editors. "But there is no guarantee of that. In fact, becoming much larger could change the financial calculus at T-Mobile, encouraging it to raise prices to lift profits and pay off Sprint's debt." As former FCC Chairman Michael Copps, now an adviser at Common Cause, noted, "Low-income consumers and other vulnerable communities seeking more affordable mobile communications services would be particularly hurt from the merger," considering the two companies have offered lower prices in the past than AT&T and Verizon. FCC Chairman Ajit Pai has shown no indication in his 15-month tenure that he'll halt deals like the T-Mobile and Sprint merger, reversing a 42-year-old broadcast ownership rule last year that had prevented the consolidation of power by media companies. "There's a reason [Sprint and T-Mobile] are trying to rush through a deal before adult regulatory supervision inevitably returns to fashion," wrote Karl Bode at VICE. "Unless Ajit Pai wants to add yet another blemish to his already disastrous tenure at the helm of the FCC, the chairman should speak out and show us he's willing to do more than rubberstamp any harmful deal that crosses his desk," said Wood.

[smix]

The Implausible Promises of a T-Mobile-Sprint Merger
The New York Times

URL: https://www.nytimes.com/2018/04/30/opin ... sible.html
Category: Business
Published: April 30, 2018

Description: T-Mobile and Sprint are making some big promises to sell their proposed $26.5 billion merger. They assert that the merger — which would reduce the number of national wireless companies from four to three — would give them the scale they need to build a high-capacity wireless network with 5G, or fifth-generation, technology. If the Federal Communications Commission and the Department of Justice approve the deal, T-Mobile and Sprint say, the company won’t raise prices and it will hire more people, rather than reduce the work force, which is more often the case in such mergers. And they say all this will be done while costs are cut by $6 billion a year and profits rise substantially. All that’s missing from this list of promises is permanently blue skies. Together, Sprint and T-Mobile would have more than 125 million customers, putting the combined company, which would keep the T-Mobile name, just behind Verizon and AT&T. Before this latest deal was agreed to on Sunday, the four companies had discussed several possible mergers in recent years. Indeed, the wireless business is already very concentrated — there were six national companies as recently as 2003 — and a deal that would further consolidate power is troubling. Having fewer competitors emboldens businesses to raise prices and force consumers into long-term service contracts because they know that people don’t have many options. That’s why the F.C.C. and the Justice Department successfully blocked AT&T’s proposed acquisition of T-Mobile in 2011 — and why regulators should be skeptical this time around as well. It isn’t clear that T-Mobile and Sprint need this deal to roll out a 5G network. Executives of both companies have previously said that they would offer such service across the country and that their networks would be the best in the industry. Now, executives say the companies’ combined wireless spectrum will allow them to offer a 5G service so good that some people will use it to replace their home broadband connection, providing competition to the likes of Comcast and Charter. That sounds great, but there is a long history of telecom executives failing to deliver on grand promises about abundant and cheap broadband. There is also plenty of evidence that more competition is good for consumers and the economy broadly. Just look at T-Mobile. After the AT&T acquisition fell apart, T-Mobile slashed prices and offered wireless service without long-term contracts under an aggressive chief executive, John Legere. The bet paid off handsomely — T-Mobile has added nearly 40 million subscribers in the past five years, and the rest of the companies in the industry have had to lower prices and change how they do business. If AT&T had been allowed to take over, many experts believe, prices would have gone up and cellphone contracts would have become much more onerous. T-Mobile is promising that it will continue to operate as a scrappy upstart even after swallowing Sprint, which has struggled to win over customers and is saddled with $32 billion in debt. But there is no guarantee of that. In fact, becoming much larger could change the financial calculus at T-Mobile, encouraging it to raise prices to lift profits and pay off Sprint’s debt. Many experts worry that the F.C.C., led by Ajit Pai, who tends to side with large telecommunications companies on important policy questions, will be overly receptive to T-Mobile’s arguments. That means the Justice Department’s antitrust division and its chief, Makan Delrahim, could play a decisive role. Mr. Delrahim has already surprised many experts by suing to block AT&T’s acquisition of Time Warner — a judge is expected to soon rule in that case — suggesting that he might be more open to challenging the T-Mobile-Sprint deal than other regulators appointed by President Trump. That said, Mr. Delrahim might only be trying to block the AT&T-Time Warner deal in order to please the president, who has railed against that acquisition and frequently criticizes CNN, which is owned by Time Warner. Regulators ought to closely scrutinize mergers between dominant players in any industry. That responsibility, however, is heightened when they’re asked to analyze deals in industries, like telecommunications, that have high barriers to entry and few competitors. Customers count on it.

[smix]

Top Democrats want to kill the T-Mobile-Sprint merger
The Verge

URL: https://www.theverge.com/2019/2/12/1822 ... j-congress
Category: Politics
Published: February 12, 2019

Description: It’s a $26 billion deal that could dramatically change the wireless landscape
Today, a group of Democratic senators wrote to officials at the Federal Communications Commission and the Department of Justice, asking that they strike down a proposed merger deal between T-Mobile and Sprint. Sen. Richard Blumenthal (D-CT) led eight of his colleagues in the letters, which are addressed to FCC Chairman Ajit Pai and DOJ antitrust chief Makan Delrahim. “Our enforcement officials are the last line of defense preventing reconsolidation of our telecommunications markets at the expense of American consumers,” the senators wrote. “We urge you to act to prevent this dangerous merger from proceeding.” The group includes some of the Democratic Party’s most prominent leaders, such as Sens. Amy Klobuchar (D-MN), Kirsten Gillibrand (D-NY), Elizabeth Warren (D-MA), and Cory Booker (D-NJ), who have all announced that they were running for president in the past few weeks. Sens. Sherrod Brown (D-OH) and Bernie Sanders (I-VT), who are anticipated to launch 2020 campaigns soon, also signed on. “We are deeply concerned that the merger of Sprint and T-Mobile in particular will eliminate competition that has been shown to benefit consumers and stifle the emergence of new carriers,” the senators added. The proposed $26 billion merger between T-Mobile and Sprint was announced last April and is currently under review by both the FCC and the DOJ. If approved, the deal would shrink the United States’ major wireless carrier pool to three down from four, including AT&T and Verizon. Executives from both T-Mobile and Sprint have said that the merger would help them deploy 5G wireless networks at a faster rate and would, in time, drive down consumer plan prices. In their letter, the senators argued that this just wasn’t the case. “The best way to achieve the goal of high-quality, affordable, nationwide 5G is through competitive markets,” the senators wrote. “This merger moves us further away from the sort of competition we need to accomplish this aim. It will lead to excessive consolidation and undermine innovation.” The letter comes amid an already tough week on Capitol Hill for the carriers. Lawmakers on the House Energy & Commerce Committee will hold a hearing n Wednesday to analyze the proposed merger deal. T-Mobile and Sprint executives are expected to testify at both hearings.

[smix]

T-Mobile, Sprint executives face skeptical House panel
Reuters

URL: https://www.reuters.com/article/us-spri ... SKCN1Q2184
Category: Politics
Published: February 13, 2019

Description: WASHINGTON (Reuters) - Executives from T-Mobile US Inc and Sprint Corp faced tough questions from lawmakers on Wednesday about how the companies’ planned merger would affect prices and jobs, especially in rural America. The deal to combine the No. 3 and No. 4 U.S. wireless carriers, struck in April, was approved by both companies’ shareholders in October and has received national security clearance, but still needs approval from the Department of Justice and the Federal Communications Commission. Representative Mike Doyle, who chairs the House of Representatives Energy and Commerce Committee panel holding the hearing, raised worries about the deal because the U.S. wireless market has just four main carriers. The industry leaders are AT&T Inc and Verizon Communications Inc. “It’s hard to think of one (deal) where consolidation did not result in people losing their jobs, prices going up and innovation being stifled,” Doyle said. Representative Billy Long, a Republican, expressed concern about lost jobs in his Missouri district. Representative Dave Loebsack, a Democrat, pointed to job losses in Iowa after T-Mobile’s acquisition of Iowa Wireless last year and said T-Mobile’s plan to buy Sprint made him “very concerned” about potential negative effects on Iowa. Representative Frank Pallone, a Democrat, said T-Mobile had sent call center jobs overseas in 2012 and asked for legally enforceable assurances that the new jobs touted by T-Mobile US Chief Executive John Legere would not be sent offshore once the deal wins approval. Legere defended the $26 billion deal, arguing that it will create jobs and help with the construction of the next generation of wireless networks. He said the merged company would have more capacity which would lead to a push to lower prices. “This is a unique merger in that there will be a significant increase in supply,” Legere said. To win support for the deal, T-Mobile previously said it would not increase prices for three years. Legere was not without supporters. Representatives Anna Eshoo, a Democrat, and Steve Scalise, a Republican, asked questions that indicated support for the deal. In prepared remarks released on Tuesday, Legere pointed to the company’s history of aggressive pricing, said it would need 11,000 new employees by 2024 and pledged to compete hard on building the next generation of wireless, called 5G. He also pledged to create 5G without using networking equipment from Huawei Technologies Co Ltd or ZTE Corp, two Chinese telecommunications firms distrusted by U.S. national security experts. T-Mobile has run into criticism from unions and consumer advocates, but rural operators have been the fiercest opponents. Carri Bennet, general counsel at the Rural Wireless Association, said the merger “will force rural Americans to pay more money for wireless services,” especially if they contract with a mobile virtual network operator who buys wholesale access to Sprint’s network and re-sells it. She said that Sprint is the only one of the four national carriers that offers anything approximating commercially reasonable roaming rates to rural carriers. “It (the merger) should be denied,” she said. Communications Workers of America President Chris Shelton told the committee the deal would “kill American jobs, lower wages, and raise prices.” Consumer advocates have said that the poorest wireless customers were likely to be disproportionately hurt by the deal since Sprint and T-Mobile have a big market share in prepaid plans. A group of eight Democratic U.S. senators and independent Senator Bernie Sanders urged the Justice Department and FCC on Tuesday to reject the deal, saying monthly bills could rise as much as 10 percent. Lawmakers who signed the letter include potential or confirmed presidential candidates Sanders, Amy Klobuchar, Sherrod Brown, Kirsten Gillibrand, Elizabeth Warren and Cory Booker. Sprint shares were up 0.2 percent in midday trade while T-Mobile shares fell 0.7 percent.

---

Democratic senators urge administration to reject Sprint, T-Mobile merger
Reuters

URL: https://www.reuters.com/article/us-spri ... SKCN1Q1253
Category: Politics
Published: February 12, 2019

Description: WASHINGTON (Reuters) - A group of eight Democratic U.S. senators and independent Senator Bernie Sanders urged the Justice Department and Federal Communications Commission on Tuesday to reject a proposed $26 billion merger of T-Mobile US Inc and Sprint Corp. The merger is “likely to raise prices for consumers, harm workers, stifle competition, exacerbate the digital divide, and undermine innovation,” they wrote in separate letters to FCC Chairman Ajit Pai and Makan Delrahim, the Justice Department’s top antitrust official. The signatories included potential or confirmed presidential candidates Sanders, Amy Klobuchar, Sherrod Brown, Kirsten Gillibrand, Elizabeth Warren and Cory Booker. Also signing the letters were Senators Richard Blumenthal and Tom Udall. The companies did not immediately comment. A U.S. House panel is set to hold a hearing on the merger on Wednesday. The senators noted the four largest wireless carriers including AT&T Inc and Verizon Communications Inc control 98 percent of the market. “Antitrust regulators around the world have consistently blocked four-to-three mergers in the mobile and telecommunications industry, and those who have allowed such mergers have lived to regret it,” they wrote. Separately, T-Mobile Chief Executive Officer John Legere defended the merger in written testimony released on Tuesday, ahead of a House Energy and Commerce Committee panel hearing on Wednesday. He said the company does not “use Huawei or ZTE network equipment in any area of our network” and will “never” use equipment from the Chinese firms in the next-generation high-speed 5G network. U.S. national security officials have said both ZTE and Huawei raise concerns. The Trump administration is preparing an executive order, that could be released as soon as this month, that would allow the Commerce Department to bar U.S. companies from using telecommunications equipment made by Huawei, ZTE or other companies deemed to pose national security risks. Legere said the merger would lead to lower prices and more U.S. jobs. Opponents argue the combined entity would likely raise prices, cut costs and harm rural consumers. Legere’s testimony says the combined firm’s business plan projects “aggressive share increases – taken from the industry leaders AT&T and Verizon – through its accelerated, enhanced 5G deployment.” He said the company planned to “keep the customers we’ve fought hard to win and win new customers with great quality, lower prices, and more innovative offerings.” Sprint Executive Chairman Marcelo Claure will tell the panel that the combined firm’s improved network “will be able to compete for customers who have been reluctant to use Sprint or T-Mobile because of concerns that the quality of their individual networks is not as good as those offered by Verizon or AT&T.” The companies announced the merger in April 2018 after their a first round of merger talks ended in 2014 when President Barack Obama’s administration expressed antitrust concerns. In the current review, Legere said the companies had turned over 25 million pages of documents to regulators. “It has been a long road,” Legere said.