The Trump DOJ/FCC 'Fix' For The Crappy T-Mobile Merger Isn't Looking So Hot

from the regulatory-theater dept

Economists repeatedly warned that the biggest downside of the $26 billion Sprint T-Mobile merger was the fact that the deal would dramatically reduce overall competition in the U.S. wireless industry. Data from around the globe clearly shows that the elimination of one of just four major competitors sooner or later results in layoffs and higher prices due to less competition. It's not debatable. Given U.S. consumers already pay some of the highest prices for mobile data in the developed world, most objective experts recommended that the deal be blocked.

It wasn't. Instead, the Trump FCC rubber stamped the deal before even seeing impact studies. And the Trump DOJ not only ignored the recommendations of its staff, but former Trump DOJ "antitrust" boss Makan Delrahim personally helped guide the deal's approval process via personal phone and email accounts. Both agencies, the vocal chorus of telecom-linked industry allies, and many media outlets all behaved as if all of this was perfectly legitimate and not grotesquely corrupt.

At the heart of the DOJ's approval was a flimsy proposal that involved giving Dish Network some T-Mobile spectrum in the hopes that, over seven years, they'd be able to build out a replacement fourth carrier. As we noted at the time, there was very little chance this plan was ever going to work. In part because the remaining three wireless carriers (T-Mobile, Verizon, AT&T) have every incentive to fight against a major fourth wireless competitor emerging from this mess. But also because Dish has a long history of spectrum hoarding and empty promises in wireless (just ask T-Mobile circa 2019 or so).

And there have been several hints that we're already stumbling along this doomed trajectory. Including the 6,000 layoffs (so far) that the merging companies promised wouldn't happen if regulators approved the deal.

Last week, for example, Dish Network complained to the FCC that T-Mobile wasn't being particularly cooperative on a number of fronts, including their supposed spectrum and network sharing arrangements. To help build this "new" fourth wireless network, T-Mobile gave prepaid mobile brand Boost Mobile to Dish. But Dish is annoyed that the Sprint CDMA network, which is currently in use by many of these customers, is being shut down prematurely, making it harder for Dish to get an operational foothold:

"Dish's letter to the FCC addresses a range of concerns, but the largest issue relates to the shutdown of the CDMA network that had previously been used by Sprint and is still used by the majority of Dish's 9 million Boost Mobile subscribers...Dish had expected that T-Mobile would eventually look to shut down that network in three to five years, according to people familiar with Dish's thinking. But Sprint said late last year that it would look to shut it down far earlier, on Jan. 1, 2022.

But Dish's letter also generally complains about something else. Namely, that post-merger, T-Mobile is acting a lot more like AT&T and Verizon (which it used to mock), and a lot less like the consumer-centric company that disrupted the market in the first place:

"In the letter, Dish also accuses T-Mobile of flip-flopping on other spectrum issues. Where T-Mobile previously pushed for policies encouraging smaller competitors, Dish says T-Mobile is now adopting the same tactics as AT&T and Verizon.

"During its earlier life as the 'Un-Carrier,' T-Mobile championed policies that promoted competition, diverse spectrum ownership, and efficient spectrum use. How quickly things change," Dish says in its letter. "Now, T- Mobile opposes measures that would help new entrants and smaller providers compete."

This should surprise absolutely nobody, including Dish. When you reduce overall competition via consolidation, the remaining competitors will always take full advantage. People like to debate this stuff, but it's like debating whether water will be influenced by gravity. It (layoffs, higher prices, worse service) happened in numerous other countries (Germany, Canada, Ireland) that saw a 4-3 sector consolidation, and, as US regulators increasingly rubber stamp mindless merger mania in wireless, it's going to happen here. And absolutely nobody responsible for it will take ownership when rates skyrocket a few years from now.

Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: ajit pai, competition, doj, fcc, makan delrahim, mergers, mobile
Companies: dish network, sprint, t-mobile


Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 8 Apr 2021 @ 11:22am

    LOL, Another Trump article? You guys need some new material.


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Follow Techdirt
Special Affiliate Offer

Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.