Lawmakers Hear Sharply Different Views of Merger Outcome

SHARE THIS ARTICLE

Share on facebook
Share on google
Share on twitter
Share on linkedin

In a nearly two and a half-hour hearing Tuesday that turned contentious several times, lawmakers on a House Judiciary Committee subcommittee tried to parse whether the proposed merger of T-Mobile and Sprint is in the public interest.

Rep. David Cicilline (D-RI), Chairman of the Subcommittee on Antitrust, Commercial and Administrative Law, said from the outset he’s, “deeply skeptical” that consolidation fosters more competition. Rep. Jim Sensenbrenner (R-WI), said he hasn’t made up his mind, but doesn’t think “antitrust questions should be partisan.”

Full Judiciary Committee Chair, Jerry Nadler (D-NY), said, “We must determine if a combined company would have less incentive to innovate and compete with competitors” in an already “highly concentrated” market.

 The resulting three large carriers would each have a third of the market, he added.  

T-Mobile CEO John Legere, who would lead the “New T-Mobile” post-merger, said the result would be more jobs, and “the new company would ensure America would win” the race to 5G, everywhere, including rural areas. He also said the new entity would offer in-home broadband, “freeing millions from the stranglehold of big cable.” 

Both Legere and Sprint Executive Chairman Marcelo Claure, pointed to a pledge they made to the FCC, not to raise prices for three years if the deal is consummated.

Several witnesses refuted those assertions. Gigi Sohn, a former FCC employee under former Chairman Tom Wheeler and now a Distinguished Fellow at Georgetown University Law Center, called the pricing pledge, “riddled with ambiguities and loopholes.” The promise of more jobs, too, “is speculative,” she said.

Communications Workers of America President Chris Shelton flatly declared the merger, “will kill American jobs,” to the tune of as many as 30,000. T-Mobile and Sprint customers are largely low-income, with stores very near each other in these markets, he said. Shelton said if the deal is approved, the company would move quickly to reduce the number of retail locations.

Legere said the combined entity would add, not subtract jobs. He also repeated several times that lowering prices, “is part of my business plan.”

Carri Bennet, General Counsel for the Rural Wireless Association, said members oppose the deal, noting that T-Mobile has had 20 years to come to rural America but has not, citing roaming agreements that allow rural carrier customers to roam on T-Mobile but not vice-versa. T-Mobile’s roaming rates are twenty times higher than Sprint’s, she added.

Also, “fiber is needed” for 5G backhaul, she said. “Without a commitment to lay fiber in rural” areas, the claims the new entity will bring 5G everywhere, “ring hollow.”

Cicilline tried to pin down Legere on the three-year pricing commitment, asking if he’d keep prices low “forever.” Legere replied: “We will have 10 times more data,” and “prices are going down.”

Cicilline then asked about whether the new entity would allow workers to unionize. Both Legere and Claure said their employees have the right to unionize “should they choose,” but have not done so. Shelton scoffed, saying at one point T-Mobile “formed a company union to stop the union,” which “hasn’t been done in this country since the 1930s.”

By Leslie Stimson, Inside Towers Washington Bureau Chief

March 13, 2019

Reader Interactions

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.