Empty T-Mobile Promises Convince Texas To Back Off Merger Lawsuit

from the sucker-born-every-minute dept

While the DOJ and FCC have rubber stamped T-Mobile's controversial $26 billion merger with Sprint, the megadeal still faces stiff opposition from more than a dozen state AGs. What began as a coalition of ten states had been slowly expanding over the last few months to include states like Texas. Collectively, state AGs have made it very clear that every meaningful economic metric indicates the deal will erode competition, raise rates, and result in thousands of layoffs as redundant employees are inevitably eliminated.

In response, T-Mobile lobbyists have been working overtime trying to convince some states to back off their opposition in exchange for promises history suggests there's little chance they'll actually adhere to. Case in point: Texas AG Ken Paxton announced Monday morning he'd be quitting the lawsuit coalition after T-Mobile promised more jobs and better broadband coverage. But the promises themselves were kept vague, and there was, you'll note, zero mention of what happens should T-Mobile not meet them:

"Attorney General Ken Paxton today announced that his office reached a settlement with T-Mobile resolving the state’s antitrust claims against the proposed merger of mobile wireless telecommunications service providers Sprint and T-Mobile. The agreement is designed to prevent the New T-Mobile from increasing prices for wireless services on Texans for five years after the merger is complete. The agreement also commits the New T-Mobile to build out a 5G network throughout Texas, including rural areas of our state, during the next six years."

But I've written pretty extensively how pre-merger telecom promises are absolutely meaningless. 99.5% of the time, when it's time to hold a big company accountable on the state or federal level for pre-merger promises five years from now, all backbone suddenly and mysteriously evaporates, and whoever is in charge at the time will suddenly decide that actually enforcing any such promises isn't worth the time and hassle of battling with telecom lobbyists and lawyers. It's a bipartisan tradition that goes back the better part of forty years, and it's a major reason why US broadband is so patchy and mediocre.

Economists are painfully clear about the fact that the T-Mobile merger will eliminate thousands of jobs, reduce competition, and drive up US wireless prices (already some of the highest in the developed world). It's another "debate" where there is no actual debate, yet you wouldn't generally know that from reading fluffy tech press coverage of the deal, which oddly omits historical context (like the fact two variants of this deal have already been blocked for risk of clear anti-competitive harm). The myopia is thanks in no small part to the litany of folks paid by telecom to pretend mergers are uniformly wonderful.

The job losses from this kind of union are inevitable. And while T-Mobile is busy promising Texas that the merger will result in expanded broadband coverage, with their other hand they're working with the CTIA to make it harder to actually determine where 5G will be available. Why do you think that might be, exactly? Still, there are thirteen states taking part in the lawsuit which, thanks to the unrealistic nature of these promises and legal precedent, has a good shot at succeeding.

Texas isn't the only state to be wooed by the dulcet tones of T-Mobile lobbyist promises. Colorado and Mississippi also backed off the lawsuit after receiving promises of new call centers and rural broadband expansion which, if 40 years of telecom history holds, will be little more than a faint echo half a decade from now when it's time to pay the bill. It's the American way.

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Filed Under: antitrust, competition, empty promises, fcc, ken paxton, merger, texas
Companies: sprint, t-mobile


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  1. icon
    That One Guy (profile), 26 Nov 2019 @ 6:04am

    Choices choices...

    The only real question is: Are they so monumentally stupid that they actually bought the pack of lies sold to them, or so corrupt that they figure it's worth screwing the state they supposedly represent/serve if it gives them the chance to boast about how they totally got some amazing 'concessions' from T-Mobile?

    Really though, the least they could have done is demand an invisible rust-proof coating for every vehicle in the state, along with a guaranteed pony for every child and free rocket-ship for every adult. If you're going to either fall for a lie or sell everyone out for one might as well hold out for a good lie.

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

  2. icon
    Anonymous Anonymous Coward (profile), 26 Nov 2019 @ 6:55am

    Fill-er up

    "Empty T-Mobile Promises..."

    Thinking about this, I have come to the conclusion that those promises are not in fact actually empty. They are full of bull puckey. Now the question becomes how an AG from Texas fails to recognize bull puckey when he sees it tells us he has never been on a ranch. Which I find a bit less than credible, for a Texan.

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

  3. identicon
    Anonymous Coward, 26 Nov 2019 @ 6:59am

    Re: Fill-er up

    is he a republican?

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

  4. icon
    Anonymous Anonymous Coward (profile), 26 Nov 2019 @ 7:02am

    Re: Re: Fill-er up

    Given the state of political parties these days, I doubt it matters.

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

  5. icon
    Luckydob (profile), 26 Nov 2019 @ 7:14am

    Well...

    Sprint, if not acquired ("merger") by T-Mobile, will soon run out of cash. If that happens, then what? Does the Gov't auction off the spectrum to others? If that happens you are basically in a worse position with a similar result. 2 Mega carriers and 1 smaller carrier with pockets of rural providers across the USA. You still end up with 3ish nationwide carriers, but in a scenario that is dominated by only 2 in reality. If the merger goes through, you will have 3 big carriers. Rock / Hard Place and damned if you do/don't.

    I'm not for mergers for the most part, but in this case it's really the best scenario outside of breaking everything up again...

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

  6. identicon
    Anonymous Coward, 26 Nov 2019 @ 7:27am

    Re: empty promises

    yup -- how many thousands of 'empty promises' have these political parties dumped on American voters in election campaigns over the decades?

    T-Mobile deceptions are small potatoes compared to what the government political pros foist upon the public every day.

    of course, to fix the ISP mess -- ya first gotta fix the political mess in D.C. and state capitols.
    ... lotsa luck with that massive chore

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

  7. identicon
    Anonymous Coward, 26 Nov 2019 @ 7:39am

    Re: best scenario

    well, America lived with just 1 telephone monopoly (AT&T) for a century.
    The Federal government experts thought that AT&T government-enforced monopoly was just dandy.
    Don't you trust Congress and FCC to do the right thing nowadays ??

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

  8. identicon
    Rocky, 26 Nov 2019 @ 7:47am

    Re: Re: Fill-er up

    Party-affiliation doesn't really matter much when your goal is to pay lip-service to the public so you can gain power, money and political influence in pure self-interest.

    How about instead of thinking it terms of republican/democrat we start labeling them douche-bag and civil servant.

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

  9. identicon
    Anonymous Coward, 26 Nov 2019 @ 7:57am

    Re: Re: best scenario

    They got broken up and then what happened, over time they have merged all back together again.

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

  10. icon
    Samuel Abram (profile), 26 Nov 2019 @ 8:13am

    Re: Re: Re: best scenario

    So basically, the telecom monopoly was like the T-1000.

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

  11. identicon
    Annonymouse, 26 Nov 2019 @ 8:37am

    Re: Re: Re: Re: best scenario

    Less a Terminator and more like a slime mold.

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

  12. identicon
    Anonymous Coward, 26 Nov 2019 @ 9:12am

    I bet it's Ken Paxton's bank account that is 'backing off from the law suit'! Only an idiot, given his official position, would give no details of the consequences should any agreement with Tmobile be broken and that assumes the agreement was very worthwhile to begin with. Having said that, heads of telecom/broadband companies are bigger liars than politicians so taking anything said with other than a pinch of salt, is oh, so risky!

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

  13. This comment has been flagged by the community. Click here to show it
    identicon
    Glen, 26 Nov 2019 @ 9:56am

    Re: aaaa

    bbbb

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

  14. icon
    Mike Masnick (profile), 26 Nov 2019 @ 11:18am

    Re: Well...

    Sprint, if not acquired ("merger") by T-Mobile, will soon run out of cash.

    Says who?

    https://www.macrotrends.net/stocks/charts/S/sprint/cash-flow-statement

    Net cash flow positive for the past 3 years. It was only negative twice in the past 12 years.

    So what are you talking about?

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

  15. icon
    Coyne Tibbets (profile), 26 Nov 2019 @ 7:31pm

    Hey, it's politics

    Look who is listening to the empty promises: politicians. And what do politicians always give? Right, empty promises.

    They've got to figure they're going to get as good as they give.

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

  16. identicon
    Motivatedworld, 26 Nov 2019 @ 8:32pm

    Re: Fill-er up

    Given the state of political parties these days, I doubt it matters.

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


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