DOJ 'Solution' For Sprint T-Mobile Merger Will Result In Less Overall Wireless Coverage

from the empty-promises dept

As we recently noted, the DOJ is absolutely tripping over itself to approve a $26 billion merger between T-Mobile and Sprint that most objective experts say will inevitably erode competition, raise rates, and reduce not only the total number of sector jobs–but the amount everybody in the telecom industry is paid. Forty years of telecom history is very clear on this point: when you reduce the total number of competitors in a telecom market, the results generally aren’t pretty (unless you’re an investor or executive).

To try and justify its approval, the DOJ has been pushing a plan that would involve the government nannying the creation of an entirely new fourth wireless carrier by spinning some of T-Mobile and Sprint assets to Dish Network, a company with a long history of empty promises on the wireless front. But a closer look at the proposal notes that not only will it take years for Dish to become a viable replacement fourth carrier (if it happens at all), the end product will result in a carrier that covers just 70% of the US, not the 99% T-Mobile, Sprint, and the FCC have been promising:

“70% of the US is far short of what T-Mobile and Sprint promised the FCC. The merging companies “committed to deploying a 5G network that would cover 97 percent of our nation’s population within three years of the closing of the merger and 99 percent of Americans within six years,” FCC Chairman Ajit Pai said in May.”

And again, this is assuming that Dish builds a full network in the first place, something many doubt will ever actually happen. For one, doing so requires some heavy coddling from the likes of FCC head Ajit Pai, who has done little to nothing to punish wireless carriers for a wide variety of sins ranging from location data scandals to billing fraud. The idea that this rubber stamp FCC will stand up to Dish and T-Mobile should they miss build out deadlines (or stand up to AT&T and Verizon when they inevitably try to undermine the effort) seems fairly laughable.

And Dish has a long history of hoarding precious wireless spectrum and then doing nothing with it, something even T-Mobile complained about at length before they became megamerger BFFs. Wall Street analysts doubt Dish has the assets, expertise, or funds to actually pull off the DOJ plan:

“”Verizon spends $15 billion annually to maintain a network that they’ve already built,” wireless industry analysts Craig Moffett and Jessica Moffett wrote in a note for investors on July 25. “The idea that Dish might spend $10 billion (their own estimate on previous conference calls) and then somehow be finished is, well, just silly.”

MoffettNathanson recommended that investors sell their Dish shares, writing that the biggest loser in the T-Mobile/Sprint/Dish deal “is Dish Network, or rather, Dish Network’s investors.” Dish’s investors value its “spectrum holdings as an asset-held-for-sale,” which is “only appropriate if the spectrum will be sold,” the firm wrote.”

It’s likely the FCC and DOJ know this proposal simply ends with Dish selling its spectrum assets back to Verizon or AT&T, but simply don’t care. That’s the benefit of regulatory capture. Granted the deal still has to survive a bipartisan lawsuit from a growing number of state AGs, the trial for which won’t even begin until December.

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Companies: dish, sprint, t-mobile

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Comments on “DOJ 'Solution' For Sprint T-Mobile Merger Will Result In Less Overall Wireless Coverage”

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14 Comments
Anonymous Coward says:

"Don't care" might be wrong

It’s likely the FCC and DOJ know this proposal simply ends with Dish selling its spectrum assets back to Verizon or AT&T, but simply don’t care.

The other possibility, of course, is that they do care, and they want this outcome. Perhaps because they own stock, or have plans to work there in the future. But they also want the opportunity to deflect blame; "we tried", they’ll say.

Anonymous Coward says:

"70% of the US is far short of what T-Mobile and Sprint promised the FCC. The merging companies "committed to deploying a 5G network that would cover 97 percent of our nation’s population within three years of the closing of the merger and 99 percent of Americans within six years," FCC Chairman Ajit Pai said in May."

This is why I don’t like percentages being thrown around. Per Cent means "out of 100".

For comparison, roughly 80% of Americans live in urban areas. This means that any deployment of 80% or less means that rural areas are almost guaranteed to have no coverage, and anything below 80% means that some cities ALSO don’t have coverage.

97% indicates that only 85% of rural areas would have coverage. That means that 15 out of every 100 people in rural America wouldn’t be able to get cell phone coverage, assuming all urban areas are fully covered.

And that’s before deciphering what they mean by "percentage of population fully covered" — because I personally don’t use my phone from a fixed location. It currently goes from LTE to 3G and back as I move around, and sometimes loses coverage altogether. So will I be "fully covered" by 5G? My guess is that the carriers say "yes" because I have LTE in my primary places of use, despite the fact that it doesn’t apply when traveling between those places, and coverage doesn’t exist at all within a 30 minute drive outside the immediate area.

Anonymous Coward says:

Re: Re:

I WANT to live where there is NO coverage, where my ears don’t constantly ring from electronic devices and electromagnetic and radio frequency noise. Its a place where people don’t spend all day with cell phones in their hands. Its a friendlier place where people actually talk to each other and don’t spend every waking moment online. Can someone point me in that direction?

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