T-Mobile Hires Ex-FCC Commissioner To Claim Its Competition-Killing Merger Will Be Really Great For…Farmers

from the synergies,-yo dept

As we’ve discussed, the looming Sprint T-Mobile merger is going to be decidedly ugly for American consumers. Global history has shown repeatedly that when you reduce the number of total competitors from four to three, you proportionally reduce any incentive to truly compete on price. Analysts have also predicted that anywhere between 10,000 and 30,000 retail, management, and administrative employees will lose their jobs as the bigger company inevitably eliminates redundant positions. Of course like any American merger, the two companies’ CEOs have spent much of the last week trying to claim the exact opposite.

Still, it’s going to be an uphill climb for Sprint and T-Mobile to sell regulators on the deal, even for an administration that seems to take pride in undermining consumers and small businesses. To try and sell it, Sprint and T-Mobile have been trying to make the claim that the only way to ensure we have the fifth-generation (5G) networks of tomorrow is if we sign off on their competition-eroding megamerger:

“It is critically important that America and American companies lead in the 5G era. Early U.S. leadership in 4G fueled a wave of American innovation and entrepreneurship that gave rise to today?s global mobile Internet leaders, creating billions in economic value and job growth. America?s early 4G leadership is credited with creating 1.5 million jobs and adding billions to the U.S. GDP. With 5G, the stakes are even higher ? because 5G will be even more transformational.”

This plays in handily to the Trump administrations protectionist efforts to ban Chinese companies from the American market in order to “win the 5G race.” The problem is that 5G isn’t some magic wand. While it will provide us with faster, lower latency and more resilient wireless networks, it’s not going to magically cure the fact that American broadband is ranked somewhere around 62nd in speed, and consumers pay some of the highest rates for mobile data in the developed world thanks to a telco monopoly over the fiber lines that feed cellular towers.

Both T-Mobile and Sprint had been making it clear for months that they could deploy 5G easily and independently of each other. Suddenly we’re being told that these next-gen networks are only made possible if we sign off on a deal history tells us will be arguably terrible for anybody other than AT&T, Verizon and SprinT-Mobile, who’ll all have less motivation to engage in real price competition post merger.

To try and sell this “only merging can deliver next-gen networks” argument, T-Mobile this week hired former FCC Commissioner Robert McDowell to make the same point in an op/ed over at Fortune:

“The T-Mobile-Sprint merger will benefit our country and all Americans. From a farmer in Nebraska using 5G technology to better track crop conditions, to a small business owner in New Hampshire looking to sell products in the global marketplace, to a smart city with autonomous vehicles, all of us will depend on 5G. We can?t afford to lose the global race to develop this remarkable technology.”

In the piece’s fine print you’ll find that McDowell is now a paid T-Mobile advisor, which is a nice shift from outlets that can’t be bothered to highlight op/ed author financial ties to industry. Again though, there’s nothing “magical” about 5G that helps create smart cities, next-gen agricultural tools, and the automated cars of tomorrow. Those technologies can still thrive on 4G networks, and again, while 5G is going to provide some notable evolutionary improvements, it’s not some kind of mystical panacea, and its impacts on our overall economy are being absurdly over-hyped by companies eager to sell networking hardware.

There’s numerous problems in the wireless sector that will persist throughout the “5G revolution,” none of which get magically eliminated by reducing competition and killing tens of thousands of jobs. The merger doesn’t magically fix AT&T and Verizon’s backhaul monopoly. It doesn’t address the fact that Americans pay more for wireless data that countless other developed nations. And it certainly doesn’t solve the problem of regulatory capture, which is why American broadband (fixed or wireless) tends to be such a comical shitshow in the first place.

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Companies: sprint, t-mobile

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Comments on “T-Mobile Hires Ex-FCC Commissioner To Claim Its Competition-Killing Merger Will Be Really Great For…Farmers”

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Anonymous Coward says:

The spin...

“thanks to a telco monopoly over the fiber lines that feed cellular towers.”

It should be written as…

thanks to a telco monopoly over the fiber lines that feed cellular towers that the regulatory agencies we pined for GAVE THEM!!!!

Seriously guys, when you are going to figure it out? Never is my estimation!

Anonymous Coward says:

Re: The spin...

thanks to a telco monopoly over the fiber lines that feed cellular towers that the regulatory agencies we pined for GAVE THEM!!!!

You really do not understand natural monopolies, especially when it comes to highly connected networks. Just how many companies do you think will have the ability to run fiber between every data-center and and every end point of the Internet?

It is not just the wire from the router to the tower that needs to be considered, but also how that fiber is connected to the rest of the Internet.

Anonymous Coward says:

Re: Re: The spin...

The problem is that you “refuse” to understand anything that does not fit into your dogma.

The regulations you supported manufactured those “natural monopolies”. At first we did not “allow” businesses to own roads they were part of infrastructure and things everyone paid taxes on for the common good. The same should occur for wire and conduit.

Anonymous Coward says:

Re: Re: Re:2 The spin...

a natural monopoly is just exactly what it means. Quick example that is easiest to understand is like this.

You own property and your property is the only one that has an Oasis within 100 miles… BAM natural monopoly.

In the telecom sector the Telephone poles are now that Oasis and these poles and wires are owned by only one company on… PUBLIC FUCKING PROPERTY! New businesses are not allowed to create new poles and wires because… regulations. And because someone owns those poles and wires they are not going to let other fuck with them for obvious reasons essentially blocking their entry into that market. Ergo… a manufactured monopoly!

That One Guy (profile) says:

Re: Re: Re:3 The spin...

Not quite, though you might be in the ballpark. ‘Natural monopoly’ in the case of things like this refer to a situation where the startup costs and available infrastructure(or room to put them) create a situation where the first in the field has a significant advantage, such that barring outside interference(read: regulations) they’ll basically have the top position simply by virtue of being first.

There’s no outside interference/regulations required for that to happen, rather it happens naturally, and what regulations should be used for is to keep it from devolving into a ‘I got here first, therefore I have all the power’ situation, ideally(I’d say) be treating internet access the same as power and water. Government builds the infrastructure, then allows private companies to use it to offer service under tightly controlled limits to prevent abuse.

Anonymous Coward says:

Re: Re: Re:4 The spin...

I see… we are definitely using different definitions.

I consider the usage of the term natural monopoly in the case of telephone poles to be intentional deceit upon the citizens.

The definition of monopoly is “exclusivity”. Having access to a pole or its wires do not have to be exclusive to a company. More than one wire can be affixed to a pole or underground conduit. Additionally, more than one type of data/information can go over the same wire. This means that the usage of “natural monopoly” to explain away why these companies have such incumbency is very dishonest.

These monopolies were explicitly and intentionally engineered. The public highway system is a GREAT analogy and you can tell how corrupt things have become in regards to it when you compare infrastructure to “toll roads” where private companies are allowed to own public property and yes in some cases taken by eminent domain from a private citizen for a company to get money and generate revenue for themselves and for the government.

If there is an actual natural monopoly here, it would be the lands that were stolen from people for this stuff… where did their “natural monopolies” go? They were stolen by virtue of them being shit poor and not actually owning anything they think they own.

“There’s no outside interference/regulations required for that to happen, rather it happens naturally,”

You have to be grossly ignorant to actually think that. I guess you never heard of google fiber despite being a regular at TD and TD having written about it many times. Go ahead, ignore the truth to avoid looking like you are wrong… it won’t hurt a thing at all!

Anonymous Coward says:

Re: Re: Re:3 The spin...

The fragile “Theory” of ‘natural monopoly’ is totally bogus — and nobody has ever been able to point to a real world example of a natural monopoly actually developing.

An Oasis is not an example of economic natural-monopoly, neither is Taylor Swift’s total control of Taylor Swift music.

Allegedly there are many natural circumstances where a ‘single market producer’ can achieve permanent monopoly due to inherently lower long term production costs … than anybody else in that industry. No one has ever found such a natural-monopoly-producer situation to validate the theory.

Government franchise-monopolies long preceded the formal theory of natural-monopoly. A few leftist economists developed the theory as an ex post rationale for government market intervention. When the first government franchise monopolies were being granted, the large majority of economists correctly understood that large-scale, capital-intensive production did not lead to monopoly, but was an absolutely desirable aspect of the competitive process. Natural Monopoly Theory was thoroughly debunked in the 1970s, but leftists still blindly cling to it as dogma.

Anonymous Coward says:

Re: Re: Re: The spin...

In other words what you want is a regulated monopoly, which is the best way of dealing with a natural monopoly.

We should be discussing how the monopoly should be regulated, and even more importantly, how are regulatory authorities et up so as to avoid regulatory capture. The UK, where I live has avoided regulatory capture, while the US has not.

It may have a lot to do with difference between agencies being headed by permanent civil servants, with government input being via a minister or secretary appointed from those elected to government, and those agencies headed by government appointees who have to worry about their next job·

Anonymous Coward says:

Re: Re: Re:2 The spin...

“In other words what you want is a regulated monopoly, which is the best way of dealing with a natural monopoly.”

Yes, natural monopolies of this kind should not be allowed and should be regulated as public resources. So gasp… it turns out I do agree with some regulations despite the false claims of the “regulate all the things” crowd.

“We should be discussing how the monopoly should be regulated,”

In this case NO. We need to discussing how they were “given” the monopolies.

“The UK, where I live has avoided regulatory capture, while the US has not.”

Since I do not know enough about your laws I cannot counter what you are saying, so I will take your word for it. That said… that still does not mean that shady business is still not going on over there either. It only means we are easily in worse off shape than you and since you can point to someone else and see that they have it worse, most people reason with themselves that they are no so bad off after all right in the middle of still being screwed. Seen it more than enough to know better.

“It may have a lot to do with difference between agencies being headed by permanent civil servants, with government input being via a minister or secretary appointed from those elected to government, and those agencies headed by government appointees who have to worry about their next job”

Yes, that does have a lot of impact… the problem is that it is supposed to be the same here in America, but a lot of people here no longer understand basic English and think that our Congress can create “Law Making Agencies” when no such power was ever granted by the Constitution. Of course that basic fundamental ignorance and stupidity is also why we have our current problems and also why they are never going to be resolved until that changes.

America is still young, but we have quickly grown fat and ignorant upon our success and have developed a level of hubris that is self destructive. Are in the midst of it now. We are going to 100% regulate ourselves right into an Oligarchy under the guise of trying to protect ourselves from the very same! In fact we essentially have already done so. And let this serve as a warning to your country too… We Americans are coming for you through IP enforcement and Trade Treaties… by the time it is all said and done an under developed nation will learn from all of our mistakes and take complete advantage of it just like China has!

Anonymous Coward says:

Re: Re: Re:3 The spin...

In this case NO. We need to discussing how they were "given" the monopolies.

They gained a monopoly position, they were not given it, because the cost of infrastructure, especially ductwork etc. is so high that the first to build out a route can lease out capacity to other for far less than the capital costsof duplicating that infrastructure, especially as they are in a position to pull in more fiber for far less than building out a duplicate route.

The mobile operators rely on fiber/wire telcos for their backhaul because that is the only way that makes economic sense, especially as building the infrastructure for a fiber to a tower would cost as much as the infrastructure providing service to the area of the tower.

Also note that competition exists in the mobile space because regulations have divided the available bandwidth and made those divisions available to different companies. In other words, frequency allocation is a regulated monopoly, especially as bandwidth is a limited resource, and cannot be reused in adjacent cells.

Anonymous Coward says:

Re: Re: Re:4 The spin...

“They gained a monopoly position, they were not given it, because the cost of infrastructure, “

Nope, they were GIVEN! The cost of it has NOTHING to do with it. If Only one company is allowed to operate or own things on public property when another is NOT allowed passage then it is a Government Granted Monopoly, not a natural one.

This really is not rocket science.

“The mobile operators…”

are also give monopolies through “spectrum sales”.

Your problem is that you are only knowledgeable enough to just exactly make the problem worse, not better trying to resolve it.

This is an easy solution, not a hard one. Poles, wires, conduits, and the air must be regulated and regulated in such a way that no company can block any other company following the regulations from starting up.

We cannot have this solution because of the following reasons…

#1. People like you that are just not smart, knowledgeable, or even interested enough to actually do the legwork to understand the problem at a fundamental level…..

which leads too problem

#2. Politicians that are JUST LIKE YOU, unable/unwilling to learn or understand the situation and just rely on the businesses that are already incumbent in the sector and are so well versed in the technology involved that they know just exactly how to fool the politicians…. no they don’t have to fool you… just the politicians that are elected by the people that are stupid.

which leads too problem

#3. Businesses writing laws for themselves through the revolving door between regulators and the regulated.

which leads to problem

#4. Laws that secure the incumbents and raises the barriers of market entry for new competition.

which leads to problem #5

people like you running your mouths… AGAIN about problems you helped to create but just do not understand starting this cycle right the fuck over again!

You are lucky, the people running your country can see the bullshit happening in American and understand… if we do not resist this shit… we are going to be absorbed into it and lose what we have. The problem is… that is only YOUR politicians that are doing good for now. That will change… I only ask that you sit back in your ignorance and enjoy the ride, we are going there no matter what you try to do.

Anonymous Coward says:

Re: Re: Re:2 The spin...

“I’m not sure whether the regulations to which you refer were enacted during the time in which I was allowed to vote … “

These were enacted long before most of us where born.

“But do continue to blame me for all that afflicts you, because – why not?”

Why? Because if you support wrong, you become at fault for it. It does not matter if you did not initiate the wrong, you just help keep that wrong in power… that is how you can gain blame.

Lets provide an example… a 25 year old boxer punches your 10 year old daughter in the face, kicks her down and keep punching her while in the middle of an on looking crowd. There is even another person trying to help but the on looking crowd is actively getting in the way of that effort.

Who would you consider to be at blame here? Just the boxer? You would not hold blame for the crowd also trying to stop the assault on your daughter?

Regulators and Businesses are the Assaulter in this case, with the Citizens (you) being the bystanders and there is someone like me trying to stop it by first trying to educate you, but you as part of that crowed is blocking me.

I will be so busy fighting with you and you will be so busy fighting with me that the Regulators and Businesses are going to win. And we cannot win, until you realize that you have been suckered!

Anonymous Coward says:

Re: Re: Re: The spin...

Superior intelligence is often misunderstood by common folks.

Mean while you “know-it-alls” are getting your asses handed to you. How long to you have to keep failing to figure out you are being played like little children?

In the end, what does it say about a group of people that keep losing, while holding the position of moral or intellectual superiority? After all, a bunch of dirty corrupt morons have been stomping your silly asses into the dirt for the better part of a century.

You only insult yourselves… it’s not like you are intelligent enough to understand that though.

Anonymous Coward says:

Re: Re:

Any kind of shit is usefull as fertilizer if you farm the right crop. Be that jackshit or bullshit. Fuck all is good for certain animal-products (milk and eggs).

I mean glass half full! I’d go as far as suggest a politician is merely growing alternative income-sources on their farm!

Aaron (profile) says:


“anywhere between 10,000 and 30,000 retail, management, and administrative employees will lose their jobs as the bigger company inevitably eliminates redundant positions”

This isn’t necessarily a bad thing, economically. If these jobs are redundant and there is a large amount of unproductive time, getting rid of some positions should help reduce overall cost.

Obviously this is ignoring the lack of competition overall, but this point doesn’t really fit with the rest.

Anonymous Coward says:

Re: Re: redundance

Competition is only such a small part of the total picture. Same goes for eliminating redundancy.

What really matters are the site-related costs, payment for backbone currency and the ability to keep customers from moving to a competitor. 20 years of locked in high rents from excruciatingly bad deals in the past, historically ridiculous zoning restrictions, backbone with some of the most opaque deals in any industry in the world and an industry that constantly has to innovate or die by churn over a long business-cycle.

If they can save a couple of cents each year is not going to change prices and a buyout, if anything, is going to slow deployment of 5G in the short term. While it would put T, VZ and TMUS at a more equal footing in the long run.
But T is, already, an oldschool media-conglomorate with a presence in access infrastructure and phones. Slushing for Cohen and having Pai agree to a few monopolies and a media-dominance that can easily leverage a buy-out of Sinclair is a gamble, but slushing a few millions to grease the wheels may work.
Vz has bought Yahoo and AOL and apparently wants to compete with Googles advertising monopoly. Sweet gig to have Pai remove their barriers for abusing the data-synergies there!
While TMUS may be a relatively pureplay actual wireless company it is connected with a MAGA-unacceptable company…

Anonymous Coward says:

Eminent Domain....

The telecom sector has shown time and time again that they eventually evolve into a monopoly and there is no competition so there is no incentive to improve or provide actual service.

Solution. The government (I know both side will hate this for some reason, regulation vs no regulation) needs to use eminent domain to take control of all the ‘backhaul’ network. They then ‘lease’ it out to ANY company with the appropriate internet service provider licensing who will then service the actual customers. This provides competition on price and service, without a single (or 3) company having control of all the backhaul network activity.

I’m sure there are other alternatives, and I’m sure nothing will actully be done (nobody has more money than the telecom corporations, except the banks and they don’t want to be in the ISP business), so in no time at all (after June 11th) I expect that we will be paying ‘by the website’ or ‘by the byte’ (and of course ad-blockers or anything that prevents you from receiving the bytes that they want to send but the users don’t want to receive from being stopped).

Next year by this time, monthly internet service prices in the US will have doubled from the current rates (probably tripled by the time you add in all the below the line fees and charges).

There’s the “seeing the web in color” charge
the ‘keeping your web neighborhood safe’ charge (that’s a nice neighborhood you have there, would be a shame if something happened to it…)
the ‘bestest internet in the world’ charge (not to be confused with fastest, most useful, or most economical, but just the bestest it could be).

WTF happened to this country and where do I go to get off (not that there is anywhere much better to go right now, I hear Mars may be nice this time of year, but that air corp monopoly is even worse than the telecom monopoly on earth)…

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