T-Mobile, MetroPCS Propose Merger

Rep. Eshoo says deal has ingredients to provide new competition

By John Eggerton -- Broadcasting & Cable, 10/3/2012 10:50:54 AM

T-Mobile and MetroPCS have proposed a merger creating a $24.8 billion, 42.5 million subscriber company, the two said Wednesday. It would need approval by the Justice Department and the FCC.

T-Mobile is a subsidiary of German company Deutsche Telekom.

The FCC and Justice last fall blocked AT&T's bid to buy T-Mobile, but that involved one of the two dominant carriers heavying up, while this deal could create a stronger competitor to AT&T and Verizon.  Certainly that was the companies' take on their meld. They said Wednesday that the deal would make them a stronger national competitor, including providing no-contract and pay-as-you go mobile broadband.

The FCC has been trying to create more wireless competition in mobile broadband, including opening up satellite spectrum for flexible use and giving LightSquared a shot at creating a wholesale competitor, though that effort was quashed by GPS interference issues.

Rep. Anna Eshoo (D-Calif.), for one, supported the deal. "At a time when two companies continue to dominate the wireless marketplace, the need for a strong national competitor has never been greater," she said. "The proposed merger of T-Mobile and MetroPCS has the right ingredients to provide consumers with a viable alternative for wireless voice and data service. I hope the FCC and the Department of Justice will conduct a thorough, but swift review of the transaction's merits."

Free Press suggested the deal would not be a substitute for FCC policies promoting competition.

"Wireless consumers have long suffered in an uncompetitive market. We need stronger competitors to push back against the AT&T-Verizon juggernaut, ones that will force these carriers to compete on price and service quality," said Free Press Policy Director Matt Wood. "But consolidation at the bottom between a regional prepaid carrier and the last-place national carrier is not going to fix all of the problems in our wireless market. The FCC is going to have to formulate bold public policies to bring consumers the relief they need."