Unsurprisingly, Ajit Pai's FCC Thinks The T-Mobile Sprint Merger Will Be Wonderful

from the man-of-the-people dept

For the last year, Sprint and T-Mobile have been pushing a large number of bogus claims justifying their $26 billion competition and job-eroding megamerger. One, that the deal will create jobs (false). Two, that the deal is necessary to deploy fifth-gen (5G) wireless (false). Three, that reducing the number of major wireless competitors from four to three will somehow create more competition (false, just ask Canadians or the Irish how that works out in practice).

There’s really no debate over whether such significant consolidation is bad for the market, consumers, and employees. You need only look to 30 years of US telecom history to discover that such growth for growth’s sake uniformly results in less competition, in turn resulting in higher prices, fewer jobs, and worse customer support. It’s a major reason everybody hates Comcast. It’s also easy to find a long, long list of companies that made all manner of pie in the sky promises pre-merger, only to fail utterly to adhere to any of them.

It’s a major reason why similar deals–both AT&T’s attempted acquisition of T-Mobile in 2011 and Sprint’s attempted merger in 2014–were blocked by regulators, something that helped drive more competition to market.

Given Ajit Pai has become a sort of poster child for regulatory capture of late, he’s not particularly keen on learning from telecom history. His agency this week unsurprisingly announced it would be approving the merger after T-Mobile made several concessions. Among them, T-Mobile promised to deploy 5G wireless broadband to 97% of the US population within three years of the closing of the merger and 99% of Americans within six years. That convinced Pai that the deal would be in the best interests of the American public:

“Two of the FCC?s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity. The commitments made today by TMobile and Sprint would substantially advance each of these critical objectives….The construction of this network and the delivery of such high-speed wireless services to the vast majority of Americans would substantially benefit consumers and our country as a whole.”

As usual, however, Pai was a bit casual with the facts. For one thing, both T-Mobile and Sprint were already on record saying they would have deployed these networks anyway to compete with AT&T and Verizon. The other major problem, obviously, is no matter how many conditions T-Mobile volunteers, consumer advocates are hard pressed to believe that Pai would actually enforce any of them:

“Industry watchers doubt whether Pai?s FCC would enforce conditions given the agency?s unwillingness to stand up to major carriers on a litany of subjects, ranging from the foot-dragging on implementing robocall tech, casual treatment of consumer location data, and repair delays in the wake of hurricanes in both Florida and Puerto Rico.

?Does anyone really believe that this FCC, which has asked nothing of the big mobile companies for over 2 years will require the companies to abide by these commitments?? former FCC lawyer Gigi Sohn told Motherboard via email.”

For what it’s worth, the Department of Justice remains skeptical that the deal’s benefits will outweigh its harms. And there are several state AGs who’ve said they’ll sue to block the deal even if it’s approved.

While T-Mobile’s disruptive nature (again, largely made possible because regulators blocked AT&T from gobbling it up) and its brash CEO tend to confuse some folks into thinking that somehow this merger will be different, you’d be hard pressed to find a single consumer group (you know, the folks paid a pittance to protect end users) that supports the deal. And unions continue to argue that the deal will be a mammoth job killer as the combined company inevitably eliminates duplicate HQs and redundant retail and support personnel. You’d be hard pressed to find a single telecom megamerger in US history that didn’t result in higher prices, job reductions, and terrible customer service, a major reason Comcast is the country’s biggest broadband provider and one of the least liked companies in America.

But time after time, companies are able to pay a rotating crop of consultants and economists to pinky swear that this deal will somehow be the one to finally fix a market broken by endless consolidation. And time after time, well-heeled lawmakers, revolving door regulators and unskeptical reporters are quick to believe them, driving the market further away from healthy competition and toward obvious monopolized dysfunction.

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Companies: sprint, t-mobile

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Comments on “Unsurprisingly, Ajit Pai's FCC Thinks The T-Mobile Sprint Merger Will Be Wonderful”

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28 Comments
FlatZOut (profile) says:

Re: Re: Just Another Addition to the Corruption Wagon.

If he wants to be loyal, he shouldn’t have repealed Net Neutrality. He shouldn’t be lying about the situations at hand. He shouldn’t have given the jurisdiction to the FTC. If Ajit Pai is being loyal, as you describe it, then he’s being loyal to the wrong group.

Gary (profile) says:

Re: Re: Re:

So, what do they think the phrase "free market" means?

It means "Absolutely no government interference."

So no trustbreaking, no taxes, no anti-monopoly regulations.

Still means government welfare to corporations of course. Telcos execs can’t afford that fourth mansion without big government handouts you know!

Robber Barons and Mergers are the natural end result of unregulated capitalism. Enjoy.

Anonymous Coward says:

Re: Re: Re:

A classification that needs to be revoked.

"Corporations are people, too!" goes as far as the free speech implications of that statement but doesn’t include anything else about being "people". The problem with this is that the individuals that make up the corporation have their voice and then, collectively, they have a second voice (with huge financial backing). It effectively gives those people a greater voice than someone who doesn’t work for a corporation. And, I argue, it’s wrong.

Anonymous Coward says:

Re: Re: Re:3 Re:

That’s a much tougher question. I’d argue that laws should be passed, similar to Section 230, that allow platforms (electronic and otherwise) to continue to moderate as they see fit. The Free Speech angle was just a useful way to gain those protections absent any more direct legislation.

Anonymous Coward says:

Re: Re: Re:3 Re:

As a followup, surely the same laws that allow any brick & mortar establishment to "reserve the right to refuse service" apply to online establishments. Perhaps there are already laws to protect content moderation and the 1st Amendment was simply the more powerful argument in defense of that practice.

Coyne Tibbets (profile) says:

Re: Re: Re:2 Re:

You impose restrictions on the corporation using stockholder money for speech. Since it has no other money, it may be silenced. That doesn’t affect the individuals, who do have money that doesn’t belong to a stockholder.

That may sound a little far-fetched, but it really isn’t. A similar thing has already been done with trade unions. Remember the rule about not using members’ dues without permission from each and every individual member?

Same thing for corporations: prohibit them from using stockholder money without permission from each and every individual dividend-receiving stockholder. No stockholder should have any portion of their potential dividend spent to make a political statement they don’t agree with.

Anonymous Coward says:

Re: Re: Re:

You know in a way mitt was right. They are people when you about it.

Only thing is when I think about it I always think of

1: mr burns
2:half a dozen pharma owners and the people who set who set those prices…
3 :Oh I could go on…
So yes he is right. Just not like he wants to be.

Anonymous Coward says:

Re: Re: Re: Re:

When I think about it – corporations are not people … for obvious reasons.

A human being, aka people, is a living organism and a corporation is not.

A corporation is an imaginary construct created within the human mind, it is a vehicle granting business a means that others do not have.

Anonymous Coward says:

Re: Re: Re:2 Re:

A corporation is an imaginary construct created within the human mind…

I would say "created within the legal system", because without legal backing it would have little significance.

A human being, aka people, is a living organism and a corporation is not.

The afore mentioned "legal system" disagrees with you.

David says:

Frankly, I wonder what the FCC workers are doing.

All Ajit Pai ever proposes is "don’t interfere with the wonderful industry". There still is a similar size of the staff as in Wheeler times. Presuming that they are not all twiddling thumbs, they are probably working with filling the drawers with the kind of stuff they’d be able to use if they were allowed to work.

So if Ajit Pai wants dysfunctionality to persist until well after the next change in government, he will need to sabotage the FCC’s internals rather than just its actions, and with all the public song and dance he finds time for, I wonder whether a post-Pai FCC could not be back in action faster than expected.

Anonymous Coward says:

personal bias

I hope this merger does go through. I just switched to T-Mobile and would love to have my network coverage expanded a bit more.

On a completely related note. I was with ATT mobile for a long time and comparatively speaking T-Mobile is orders of magnitude less evil than the soulless demon that is the ATT corporation.

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