Archive

Posts Tagged ‘Sprint’
February 8th, 2019 at 10:10 am
New York Agrees That a T-Mobile/Sprint Merger Would Serve the Public Interest
Posted by Print

Well, that didn’t take long.

Yesterday, the New York State Public Service Commission approved the proposed T-Mobile/Sprint merger as “in the public interest” after considering all of the relevant facts and competing arguments.

As CFIF and others have emphasized since the proposed merger’s announcement, the transaction would provide an enormous net benefit to the American economy and consumers, and there’s simply no reason for needless delay or misplaced opposition from federal, state or local governments.  In terms of faster 5G transition in the U.S., more jobs, more private telecommunications investment, greater market competition, broader nationwide coverage for consumers, capacity improvements, performance improvements and lower prices (as we highlighted just yesterday), this merger is a no-brainer.

Importantly, among other benefits to the public that we’ve emphasized, the New York Commission yesterday noted how the merger would result in a new entity whose whole would be greater than the sum of its current parts:

.

[T]he Petitioners have addressed concerns related to the broader issues raised by others in this case…  In response to claims that T-Mobile and Sprint would have built 5G networks in any case, the Petitioners assert that the new T-Mobile will be able to build a larger, more robust network in a more timely fashion, than either of the two companies on their own.”

.

We at CFIF applaud the Commission’s common-sense finding, and hope that other authorities will demonstrate similar rationality.  In particular, next week the House Judiciary and Energy & Commerce Committees will hold a joint hearing on the proposed merger.  As Energy & Commerce Committee Chairman Frank Pallone, Jr. (D – New Jersey), Judiciary Committee Chairman Jerrold Nadler (D – New York), Communications & Technology Subcommittee Chairman Mike Doyle (D – Pennsylvania) and Antitrust, Commercial & Administrative Law Subcommittee Chairman David Cicilline (D – Rhode Island) explicitly stated in their joint announcement, “We look forward to examining this merger from the perspective of what is in the best interest of consumers and hardworking people.”

Well, New York authorities examined that same question yesterday, and the answer was obvious in the affirmative.

 

February 7th, 2019 at 7:20 am
Proposed T-Mobile/Sprint Merger Already Bearing Fruit
Posted by Print

For months since its announcement, CFIF has enthusiastically supported the proposed T-Mobile/Sprint merger, based upon the myriad benefits that it offers the American economy and consumers.

Among those benefits, lower consumer prices stand among the most prominent.  Well, that prospective benefit is already coming to fruition.

Specifically, in a letter this week to the Federal Communications Commission (FCC), T-Mobile Chief Executive Officer John Legere committed to maintaining “the same or better rate plans” for the next three years as the merger occurs:

Critics of our merger … have principally argued that we are going to raise rates right after the merger closes.  I want to reiterate, unequivocally, that New T-Mobile rates are NOT going to go up.  Rather, our merger will ensure that American consumers will pay less and get more…                   

If we broke faith by raising rates and cutting back benefits, we would lose our loyal customers and destroy the future of our brand.  I want to assure you that we would never do this.  My management team and I can make this personal commitment because we believe in delivering on our promises, and we k now if we do not, we will lose credibility and the trust of our customers.  Our business plan and our future success are centered around building a world class 5G network for everyone and delivering more to consumers for less.                     

To remove any remaining doubt or concerns about New T-Mobile’s prices while we are combining our networks over the next three years, T-Mobile today is submitting to the Commission a commitment that I stand behind – a commitment that New T-Mobile will make available the same or better rate plans for our services as those offered today by T-Mobile or Sprint.  We believe this merger makes consumers better off, and we’re willing to put our money where our mouth is.  Period.

Of course, that’s not the only benefit to the American economy and consumer marketplace, as we’ve detailed.

Among other important improvements, the T-Mobile/Sprint merger would add another major competitor to the existing marketplace, and combine their current differing but complimentary assets.  The result will be more jobs, faster wireless, quicker transition to 5G technology in America, more choices for consumers, greater private telecommunications investment and all of the consequent innovation that market competition entails.

Nevertheless, the fact that the benefits to American consumers in terms of pricing are already arriving confirms the soundness of this proposed merger.

It’s certainly something for the House Judiciary and Energy & Commerce Committees must acknowledge at their joint hearing next week.  The alternative to a T-Mobile/Sprint merger is less investment, fewer jobs, less market competition, more harmful government intervention into the economy, slower 5G deployment and one fewer competitive market participant.

That’s simply an unacceptable and indefensible alternative.

February 1st, 2019 at 3:21 pm
Proposed T-Mobile/Sprint Merger Would Be a Win for American Consumers
Posted by Print

On February 13, the House Judiciary and Energy & Commerce Committees will hold an important joint hearing on the proposed T-Mobile/Sprint merger that promises greater innovation, more jobs, more private telecommunications investment, increased market competition, faster wireless and greater choice for consumers as America proceeds toward our much-anticipated 5G technological rollout.

Energy & Commerce Committee Chairman Frank Pallone, Jr. (D – New Jersey), Judiciary Committee Chairman Jerrold Nadler (D – New York), Communications & Technology Subcommittee Chairman Mike Doyle (D – Pennsylvania) and Antitrust, Commercial & Administrative Law Subcommittee Chairman David Cicilline (D – Rhode Island) state in their joint announcement that, “We look forward to examining this merger from the perspective of what is in the best interest of consumers and hardworking people.”

Well, the answer to that question is clear.

Compared to the current telecommunications marketplace, the T-Mobile/Sprint merger will mean an enhanced array of consumer services.  Sprint and T-Mobile currently possess differing but symbiotic assets, rather than overlapping ones that might otherwise simply mean a bigger company instead of two smaller (and less competitive) ones.  As a result, the new entity would create a new network with broader nationwide coverage, capacity improvements and improved wireless performance for customers compared to what American consumers currently enjoy.  As has been exhaustively demonstrated by CFIF and others, the proposed merger also promises lower costs for consumers, new jobs and necessary network upgrades.

In particular, the proposed merger offers significant potential benefits through deployment of the first 5G wireless network in the U.S., as CFIF has noted:

With an anticipated $40 billion investment in 5G, consumers will enjoy data delivery at a lower cost, and the incentive for competitors to similarly lower prices to consumers.  That will also prompt market competition to expand spectrum in rural areas in addition to urban centers, as well as capacity improvements for consumers.           

That’s how market competition works.  A T-Mobile/Sprint merger and its 5G deployment would also mean billions in new private infrastructure investment and countless new jobs.  In contrast, the absence of a T-Mobile/Sprint merger would mean slower deployment of a 5G nationwide network, and the absence of a market competitor of greater scale.  Ultimately that means consumers would lose.

There is simply no point in needless delay or contentiousness when the House Judiciary and Energy & Commerce Committees convene on February 13.  The proposed Sprint/T-Mobile merger offers only benefits to American consumers compared to the existing status quo.  The Committees must recognize that reality, lest we pay an unnecessary price in terms of slower 5G, fewer consumer choices, fewer jobs, less investment and less market competition.

 

June 13th, 2018 at 3:01 pm
In Good News for Consumers, Federal Judge Rejects DOJ Attempt to Block AT&T/Time Warner Merger
Posted by Print

In a decision that came as no surprise but nevertheless merits celebration, a federal judge yesterday rejected the Justice Department’s needless lawsuit attempting to block AT&T’s acquisition of Time Warner.

Whenever federal bureaucracies seek to disrupt functioning markets by prohibiting mutual agreements between two willing parties, they carry a heavy burden of proof to establish impending consumer harm.  In this case, the opposite was true – the federal government’s needless interference, not the proposed acquisition, would result in consumer harm.  Accordingly, Judge Richard Leon ruled that Justice’s allegations “do not come close to answering the question before the Court.”

So why is yesterday’s ruling important going forward?  Hopefully, it provides federal bureaucrats an abject lesson against future destructive campaigns of a similar sort.

As one immediate example, consider the proposed merger between T-Mobile and Sprint announced recently.  Although the T-Mobile/Sprint proposal involves characteristics unique to it, it offers the consumer market similar sorts of benefits.

Namely, T-Mobile/Sprint prospectively offers an enhanced array of consumer services in comparison to what is available today.  For example, the two current companies’ differing but complementary assets would create a new network with enhanced capacity, wider coverage and more effective wireless performance for customers than currently exists.  It also promises network upgrades, lower prices and job creation.  In particular, the proposed merger offers significant potential benefits through deployment of the first 5G wireless network in the U.S.

Through that $40 billion investment in 5G, consumers will enjoy data delivery at a lower cost, and the incentive for competitors to similarly lower prices to consumers.  That will also prompt market competition to expand spectrum in rural areas in addition to urban centers, as well as capacity improvements for consumers.

That’s how market competition works.  A T-Mobile/Sprint merger and its 5G deployment would also mean billions in new private infrastructure investment and countless new jobs.  In contrast, the absence of a T-Mobile/Sprint merger would mean slower deployment of a 5G nationwide network, and the absence of a market competitor of greater scale.  Ultimately, that means consumers would lose.

The Trump Administration has demonstrated to date how deregulation can turbocharge the economy and benefit American consumers.  That logic applies with added potency to the ever-evolving telecommunications market, and the Justice Department should learn its lesson and refrain from future needless interference that will only cost consumers and trigger embarrassing legal defeats.

May 13th, 2015 at 8:03 pm
The Two Faces of T-Mobile

The recent release of the Apple Watch was a momentous occasion that has become routine for American consumers: another breakthrough mobile product hitting the marketplace. Whether new devices or continuous improvements to smartphones and other devices on which we all rely, almost all of us use gadgets that just ten years ago would have been considered science fiction.

Less well known to consumers is the technical foundation of the entire ecosystem upon which such devises operate. Specifically, wireless spectrum is the invisible infrastructure that carries data between devices and to the broader Internet. Wireless companies compete fiercely for this resource so that they can provide good service for their customers.
 
That’s why – despite the fact that the Federal Communications Commission (FCC) is auctioning off coveted broadcast spectrum next year, an eternity in tech terms – the jockeying between potential bidders has already started. Two of the major players in particular, Sprint and T-Mobile, have been ceaselessly calling for the FCC to create auction rules that benefit them at the expense of their competitors. Their latest request is for a larger set-aside to limit the amount of spectrum on which competitors AT&T and Verizon can bid. 

This isn’t the first time the two companies have made such a request.  The FCC didn’t accept it last time, and it shouldn’t now as the only change is that Sprint and T-Mobile now are pushing their shared agenda through the recently (and conveniently) formed “Save Wireless Choice” coalition.

This is a terrible idea for several reasons, not the least of which is the fact that Sprint and T-Mobile are dynamic companies that compete fiercely in the wireless industry. Don’t just take our word for it. On a recent call with Wall Street analysts, T-Mobile CEO John Legere bragged that T-Mobile has “a great spectrum portfolio. That’s allowed us to be smart and opportunistic,” and claimed that the company was “off to an incredible start to 2015 with the best customer growth in the industry fueled by disruptive Un-carrier moves and the network that continues to be America’s fastest.”  Similarly, Sprint CEO Marcelo Claure asserted that he “couldn’t be more confident that now [Sprint has] the right plan to be successful” and acknowledged Sprint’s “rich spectrum portfolio.”
 
Legere and Claure’s comments to Wall Street make their plea to the FCC – that they cannot compete with AT&T and Verizon in the upcoming auction or in the industry long-term – completely disingenuous. Furthermore, Sprint chose to sit out of the recent AWS-3 auction, and it was DISH, not AT&T or Verizon, that outbid T-Mobile most on licenses it sought but didn’t win.
 
Indeed, it was DISH’s shady dealings during the AWS-3 auction that demonstrate the danger of rules that favor certain players over others in the marketplace. DISH used shell companies to take advantage of the FCC’s Designated Entity program, a program that is supposed to help small companies buy spectrum by giving them a discount.  That sleight of hand with DISH will cost taxpayers a stunning $3.3 billion unless the FCC investigates and rejects the taxpayer-funded discount.
 
At the end of the day, Sprint and T-Mobile are massive, competitive companies backed by large, foreign corporations, Softbank and Deutsch Telekom. Even if that were not the case, the recent experience with DISH should be a giant red flag about the unintended consequences of rules that favor certain companies.
 
In order for consumers to continue reaping the benefits of the wireless revolution, they need more spectrum to be allocated in the most efficient way possible. In the 2016 incentive auction, that means straightforward rules that treat all bidders equally. This principle has taken us to where we are right now, and it would be a mistake to jeopardize this progress by giving in to the self-serving pleading of two companies.

July 12th, 2013 at 3:30 pm
FCC Spectrum Screen Should Encourage Competition, Not Pick Winners and Losers
Posted by Print

Last week, the Federal Communications Commission (FCC) approved a pair of sequential purchases:  (1)  Sprint’s purchase of the remainder of Clearwire’s spectrum, and (2)  the Japanese company SoftBank’s purchase of Sprint.  So far, so good.

Here’s the problem.  Those interrelated transactions presented the FCC with a perfect opportunity to reform the so-called “spectrum screen,” a tool that measures spectrum available for wireless use in order to ensure competition in the wireless market.  Unfortunately, the FCC failed to make any reform whatsoever to that spectrum screen framework, which will only serve to create even more regulatory uncertainty and discourage critical wireless infrastructure investment.

The screen framework has been, and can continue to be, a useful tool for assessing competitive effects of spectrum.  But until that framework is brought up-to-date to reflect all spectrum available and useable for mobile wireless services, the tool remains outmoded and flawed, effectively artificially picking winners and losers.

With the FCC’s inaction last week, a 2008 decision (the last time the FCC visited the spectrum screen issue) continues to guide spectrum aggregation policy.  In that decision, the FCC chose to ignore the bulk of Clearwire’s 2.5 GHz spectrum, counting only 55.5 MHz of it toward the screen.  By not revisiting the spectrum screen when it green-lighted last week’s transactions, the FCC continued to discount a large portion of spectrum available for wireless use.  It’s difficult to understand their rationale.

Sprint continues to advocate for its own interests, insisting that only one-third of its Clearwire spectrum should be included in the spectrum screen.  Sprint bought the remainder of Clearwire’s spectrum to pave the way for the SoftBank deal, to leverage the value of Clearwire’s network and to optimize Clearwire’s spectrum.  So while the FCC chooses not to tally all of Clearwire’s available BRS/EBS spectrum, SoftBank gained rights to the 2.5 GHz band.   In contrast, when AT&T previously acquired WCS licenses at 2.3 GHz, the FCC found that the spectrum was usable for mobile wireless services and made changes to the screen.

Curiously, the FCC’s order last week maintained that the three-way deal was not the appropriate vehicle for reviewing the spectrum screen because, from the Commission’s point of view, no spectrum was being swapped.  SoftBank, however, owns no U.S. airwaves.  Moreover, the FCC had previously ascribed Clearwire’s spectrum to Sprint.  Thus, the FCC oddly seems to believe that such an exchange of spectrum is not a transfer.

The FCC’s position not to adjust the spectrum screen in the recent transfer of spectrum to a Japanese owned company is disturbing, especially given that it is currently considering imposing—on an ad hoc basis—a spectrum screen on America’s two largest domestic wireless companies in the upcoming spectrum auction.

The spectrum screen, used properly and applied in a competitively neutral manner, can be a useful tool to protect competition in the wireless marketplace.  But the FCC should stop trying to exploit it to pick “winners and losers” in the marketplace.  Instead, the FCC should update its existing screen to ensure that it incorporates all available spectrum suitable for mobile wireless services.  Only then will it provide the market with the business certainty necessary to advance further infrastructure investment and wireless innovation.