Six Democratic Senators want the FCC and the DoJ to scrutinize and possibly challenge T-Mobile’s (NASDAQ: TMUS) planned purchase of UScellular’s (NYSE: USM) wireless operations. The deal requires regulatory approval. It’s expected to close midway through next year, notes DatacenterDynamics.
The senators want careful review of the transaction that was announced in May, as first reported by MSNBC. “Additional consolidation in the market would have far-reaching effects, reducing choices for consumers, further concentrating wireless spectrum holdings, and potentially leading to higher prices and other harms for consumers across the country,” wrote the senators in a letter to both agencies.
The letter was led by Senators Elizabeth Warren (D-MA) and Amy Klobuchar (D-MN). Co-signers were Senators Chris Murphy (D-CT), Bernie Sanders (I-VT), Cory Booker (D-NJ) and Richard Blumenthal (D-NY).
Under the agreement, T-Mobile will acquire substantially all of UScellular’s wireless operation, including four million wireless customers, retail locations, as well as certain specified spectrum assets to improve rural coverage for about $4.4 billion. UScellular’s majority shareholder Telephone and Data Systems (NYSE: TDS) supports the deal.
Under the agreement, UScellular would retain 70 percent of its wireless spectrum and towers, leasing space on other towers to T-Mobile, notes CNBC.
Warren and Klobuchar had previously raised concerns about T-Mobile’s acquisitions and Sprint merger. The lawmakers also asked the Justice Department to consider unwinding that deal, arguing that it cost customers of competing wireless carriers billions of dollars. The transaction “eliminated a low-cost carrier from the market, reducing the competitive pressure on the remaining national wireless carriers to aggressively compete to lower their prices,” the lawmakers said in the letter.
Some analysts predicted in May the T-Mobile-UScellular transaction would see antitrust review. “An FCC or DoJ challenge to the proposed UScellular transaction does not even demand the aggressive horizontal M&A strategies advanced by the DoJ’s Jonathan Kanter or even more extreme ambitions from FTC Chair Lina M. Khan,” Benchmark analyst Matthew Harrigan wrote at the time, according to Yahoo News.
A spokesman for UScellular pointed to a statement released at the time the deal was announced, saying it would “provide more competitive choices for UScellular customers, as they will benefit from T-Mobile’s greater resources and ability to provide lower prices, more robust plans, and a better network experience.”
T-Mobile has “a great track record when it comes to delivering competition-enhancing shifts that have benefited our customers and consumers and looks forward to sharing more in our FCC filing in the coming months,” stated a company spokesman.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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