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.

Filed Under: ajit pai, fcc, merger
Companies: sprint, t-mobile


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  • icon
    FlatZOut (profile), 22 May 2019 @ 7:08am

    Just Another Addition to the Corruption Wagon.

    Ajit Pai needs a common sense pill because this is getting out of hand.

    reply to this | link to this | view in chronology ]

    • identicon
      MathFox, 22 May 2019 @ 7:14am

      Re: Just Another Addition to the Corruption Wagon.

      Ajit Pai needs a common sense pill because this is getting out of hand.

      In his filter bubble staying loyal to his former and future employers is good.

      And it will good for his financial future to stay loyal.

      reply to this | link to this | view in chronology ]

      • icon
        FlatZOut (profile), 22 May 2019 @ 7:57am

        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.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 22 May 2019 @ 8:09am

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

          he’s being loyal to the wrong group

          That's exactly what the previous poster was saying.

          reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 May 2019 @ 9:20am

      Re: Just Another Addition to the Corruption Wagon.

      Oh, so that's what replaced "the swamp".

      reply to this | link to this | view in chronology ]

  • icon
    Coyne Tibbets (profile), 22 May 2019 @ 7:31am

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

    Of course it does. The current administration is stuffed with free-market proponents....who are all certain that competition is bad.

    Just ask them. But be prepared for a wide-eyed lie for an answer.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 May 2019 @ 7:49am

      Re:

      That is interesting, free market cheerleaders think competition is bad.

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

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 22 May 2019 @ 8:03am

        Re: Re:

        That they're free to stifle competition however they want.

        reply to this | link to this | view in chronology ]

      • icon
        Gary (profile), 22 May 2019 @ 8:08am

        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.

        reply to this | link to this | view in chronology ]

      • identicon
        mcinsand, 22 May 2019 @ 9:32am

        free markets

        These bozos don't see the free market that helps us citizens; they're more interested in a free market where they sell their votes and influence to the highest corporate bidders.

        reply to this | link to this | view in chronology ]

  • icon
    Stephen T. Stone (profile), 22 May 2019 @ 7:48am

    If a corporation loves something, there’s a better than small chance that the thing in question only benefits the corporation and has no advantages whatsoever for real human beings.

    Jim Sterling

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 May 2019 @ 7:50am

      Re:

      But - but,

      Corporations are people my friend .... lol

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 22 May 2019 @ 8:13am

        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.

        reply to this | link to this | view in chronology ]

        • icon
          Gary (profile), 22 May 2019 @ 8:50am

          Re: Re: Re:

          It effectively gives those people a greater voice than someone who doesn't work for a corporation. And, I argue, it's wrong.

          How do you revoke a corporations speech without blocking the speech of the people who make up that corporation?

          reply to this | link to this | view in chronology ]

          • icon
            Stephen T. Stone (profile), 22 May 2019 @ 8:54am

            Additionally: How do you revoke the First Amendment rights given to corporations without forcing a corporation to associate itself with “distasteful” speech (e.g., forcing Facebook into hosting content its administrators do not want to host)?

            reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 22 May 2019 @ 10:13am

              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.

              reply to this | link to this | view in chronology ]

            • identicon
              Anonymous Coward, 22 May 2019 @ 10:16am

              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.

              reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 22 May 2019 @ 10:12am

            Re: Re: Re: Re:

            The individuals still have their free speech.

            reply to this | link to this | view in chronology ]

          • icon
            Coyne Tibbets (profile), 22 May 2019 @ 11:18pm

            Re: Re: Re: 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.

            reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 22 May 2019 @ 9:24am

        Re: Re:

        Corporations are people my friend ....

        If corporations are "people", then "owning" them should be illegal.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 22 May 2019 @ 11:14am

        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.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 22 May 2019 @ 12:56pm

          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.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 22 May 2019 @ 1:20pm

            Re: Re: Re: 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.

            reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 22 May 2019 @ 2:25pm

      Re:

      Thank God for him.

      reply to this | link to this | view in chronology ]

  • identicon
    David, 22 May 2019 @ 9:14am

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 May 2019 @ 11:10am

    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.

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 22 May 2019 @ 11:57am

    ATT MERGER FAIL

    Anyone read about this??
    How AT&T had a merger, thinking thigs would be Fantastic, only to find out, it was going to hurt the company bottom line??

    reply to this | link to this | view in chronology ]


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