Home > posts > Two-Face T-Mobile 2.0
June 30th, 2015 2:10 pm
Two-Face T-Mobile 2.0
Posted by Print

We recently described how T-Mobile was playing crony capitalist DC games and talking out of both sides of its mouth.  On one side, it told Wall Street that it’s in a great position.  On the other side, it pleaded with federal regulators in DC that it needs their help in order to remain competitive in the wireless marketplace.

The company CEO, whom The Wall Street Journal’s Holman Jenkins labeled “Potty-Mouth” Legere, is now doubling down on the company’s “Little Sisters of the Poor” message to DC and calling for a larger set-aside in the upcoming spectrum incentive auction.  The Obama Federal Communications Commission (FCC) already promised to set aside 30 MHz, but that just wasn’t enough for T-Mobile.  Now Mr. Legere and the Save Wireless Choice coalition – which conspicuously counts T-Mobile, Sprint, and DISH as members – are pushing for at least 40 MHz.

That set-aside proposal is a bad idea for several reasons.  First, T-Mobile wants the FCC to make it easier for it to get spectrum at below-market value without competing against AT&T and Verizon.  There’s no reason, however, to believe that T-Mobile can’t compete in a fair and open auction without federal bureaucrats tipping the scales in their favor.  Moreover, even if money were an issue, couldn’t T-Mobile’s multi-billion dollar parent company, Deutsche Telekom, come to its aid?

Consider the straightforward numbers:  Deutsche Telekom, a German company with a market cap over €70 billion, is a 66% stakeholder in T-Mobile.  Additionally, the German government maintains approximately a 1/3 stake in Deutsche Telekom.  Accordingly, offering T-Mobile an unjustified advantage translates into a giveaway to a foreign company and a foreign government.

But what about American consumers?  The set-aside could drive down auction revenue, which in turn means less money for the U.S. Treasury and less spectrum that’s sold and brought to market for the benefit of U.S. consumers.

FCC Chairman Tom Wheeler recently said that he thinks the set-aside should remain at 30 MHz and NOT get increased.  That’s a rare bit of moderately positive news, but if the FCC is really reviewing the set-aside in advance of its July 16th open meeting, it should eliminate this cronyist monstrosity entirely, and send Mr. Legere and his tin can packing.

Comments are closed.