WASHINGTON — Federal Communications Commission Chairman Ajit Pai announced his support on Monday for approval of T-Mobile’s $26.5-billion takeover of Sprint.
The proposed FCC action follows reported concessions made by the two carriers, including rural-service guarantees, a temporary price freeze and the sale of one of the companies’ prepaid brands. The deal is still subject to scrutiny from the Department of Justice and state attorneys general, which could move to block the proposed merger on the basis of antitrust concerns.
If approved, the deal would leave the United States with only three nationwide wireless-service providers. This would crush competition, raise prices and eliminate as many as 30,000 jobs, according to union estimates. The deal would disproportionately harm low-income people and communities of color, who rely on competition between Sprint and T-Mobile and their prepaid services to keep access affordable.
Free Press Vice President of Policy and General Counsel Matt Wood made the following statement:
“The conditions proposed in yet another policy-by-press-release Pai statement would do nothing to alleviate this deal’s obvious harms, especially to low-income populations, communities of color and anyone seeking a more affordable price for essential wireless communications.
“Chairman Pai crows that the companies’ so-called deal commitments would help close the digital divide and spur 5G deployment. But these speculative conditions wouldn’t move the needle on either score. In fact, the merger would just make things worse, as Free Press research and the record before the FCC demonstrate.
“The digital divide isn’t just about rural buildout — though as others opposing the deal have shown, the merged companies’ spectrum wouldn’t allow for decent rural coverage at 5G speeds. Both T-Mobile and Sprint are already building 5G networks without the deal.
“The digital divide the FCC should focus on is the affordability crisis. It leads to an adoption gap that makes it hard for poorer people to get online, and it keeps people of color disconnected more often than other demographic groups. People who rely on prepaid services won’t see any benefits from the conditions the FCC is touting with such glee this morning.
“Divesting Boost won’t do a thing. If and when that brand is actually cleaved off from T-Mobile and Sprint, it’ll no longer have access to those companies’ networks. It would, like other wireless resellers, need to lease capacity from the new T-Mobile, and that means that this divestiture would do nothing to address the vast market power T-Mobile is accumulating.
“The supposed three-year price freeze is meaningless in a wireless market where prices are falling and likely would continue to drop in the absence of this merger. The little bit of price competition people have enjoyed thanks to the rivalry between Sprint and T-Mobile could keep sending prices lower. So a meaningless and unenforceable promise to just tread water where we are now is a sad joke, and nothing more.
“None of these supposed benefits would offset this merger’s many harms. Even T-Mobile’s own economists admitted that this deal would raise prices. It’s not just the post-merger T-Mobile that would be able to charge more, but AT&T and Verizon too. Everyone will pay more if this deal goes through.
“Despite this morning’s bad news, from an agency and a chairman who specialize in disastrous decisions, we hope that the Department of Justice and state attorneys general will block this massive and anti-competitive horizontal merger. If they won’t, then our antitrust laws are meaningless.”