Much has changed from the original proposal to the settlement announced Friday for the T-Mobile acquisition of Sprint and divestitures to Dish in order to create a viable, fourth competitive national carrier. However the FCC believes it can soon put the finishing touches on a draft order approving the deal. But at the same time, at least one FCC Commissioner opposes it, as does the Rural Wireless Association (RWA), the Communications Workers of America (CWA), Attorney’s General from 13 states and the District of Columbia, and various public interest groups.
In a briefing with reporters, FCC officials said the agency believes the merger is in the public interest. One official noted the deal allows both T-Mobile and Sprint, combined, to deploy 5G faster, and further, than they could separately — including to rural areas. The officials also pointed to substantial penalties that kick-in if Dish fails to meet its build-out commitments, which amount to more than $2B per violation.
“We do believe Dish is a serious and credible buyer,” said one agency official, adding that the DOJ conditions give Boost, “once divested, an incentive to compete against T-Mobile and Sprint.”
Critics like Public Knowledge Senior Policy Counsel Phillip Berenbroick, say the commitments will be hard to enforce and the DOJ, “has proposed a risky bet on creating a new competitor.”
Berenbroick and other opponents point out that even with the conditions, Dish would be in the position of building a wireless network from scratch, which they believe is highly unlikely given its past behavior. “DISH has never shown any inclination or ability to build a nationwide mobile network on its own and has repeatedly broken assurances to the FCC about deployment of its spectrum,” said New York Attorney General Letitia James. She’s leading 14 state AGs in a lawsuit to block the deal, calling it anti-consumer.
Inside Towers has reported the RWA opposes the merger, noting that Dish has a history of hoarding spectrum. “The CWA is extremely disappointed that the DOJ has caved to political pressure,” RWA General Counsel Carrie Bennet told reporters. The resulting transaction will result in higher prices for consumers, including those travelling through rural areas, she explained.
FCC Chairman Ajit Pai previously said he was inclined to approve the transaction. In a statement Friday, Pai said the commitments made by T-Mobile and Sprint to deploy a 5G network that would cover 99 percent of the American people, along with the divestitures and conditions imposed, in negotiations with the Department of Justice, would advance 5G and protect competition. Pai also noted the transaction garnered bipartisan support, including from Governor Laura Kelly (D-KS), Congresswoman Anna Eshoo (D-CA), and former FCC Commissioner Mignon Clyburn. Clyburn lobbied for the merger before regulators, Inside Towers reported.
FCC Commissioner Brendan Carr, echoed that approval, telling CNBC, the DOJ’s decision clears a path for an accelerated 5G buildout to 99 percent of Americans. He called the deal a “big win for rural America.”
Public Knowledge, the RWA and CWA told reporters that so many of the merger terms have changed, the FCC should put the new proposed transaction out for public comment. FCC Commissioner Jessica Rosenworcel agrees, saying: “Too much here has been done behind closed doors.”
An FCC official did not commit to this action, except to say the deal has been pending at the Commission for 14 months and all the commitments, including the newest items, are available on the agency’s transaction webpage.
“The DOJ has proposed a risky bet on creating a new competitor. Nothing is certain. Consumers will face considerable harm if events do not proceed as envisioned,” said CWA Research Director and Telecommunications Policy Director Debbie Goldman.
If the FCC does approve the transaction, would the opponents file suit to stay the effectiveness of the deal until the state AG case is resolved? Opponents said they were still reviewing their options.
By Leslie Stimson, Inside Towers Washington Bureau Chief
July 29, 2019