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T-Mobile, Sprint File With FCC - Broadcasting & Cable

T-Mobile, Sprint File With FCC

Companies say merger will bring jobs, competition, 5G
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T-Mobile-Sprint

T-Mobile and Sprint have filed with the FCC for approval of their proposed merger, and promised in their public interest statement that the deal would create more jobs, more choice in video and business service, and world-class 5G service, while lowering consumer prices and helping close the rural high-speed divide.

They said the goal is to beat AT&T and Verizon, not emulate them.

That is according to a copy of the redacted merger application and public interest statement from the two companies.

They pointed to Verizon and AT&T getting into other businesses, saying that is not their strategy.

"Verizon and AT&T are investing in a wide array of businesses in recognition of a converging broadband market, and therefore their interests and resources are spread across a lot of areas," T-Mobile and Sprint told the FCC. AT&T has just closed on its deal to acquire Time Warner and its programming assets, for example.

"New T-Mobile will be laser-focused on improved broadband connectivity at a lower price," the companies said. "This means New T-Mobile will not be coordinating with AT&T, Verizon or other large players to increase prices or restrict the amount of data delivered per dollar."

Related: FCC Preps for T-Mobile-Sprint Merger

The deal will be a merger of Sprint into T-Mobile as an indirect subsidiary of T-Mobile and a direct subsidiary of T-Mobile USA, which is itself a subsidiary of T-Mobile. John Legere, CEO of T-Mobile will be CEO of the combined company, with T-Mobile president Mike Sievert serving as president and COO of the combined company.

"This proposed merger is necessary to accomplish a goal critical to enhancing consumer welfare in this country," the companies told the commission; that goal is "the rapid and widespread deployment of 5G networks in a market structure that spurs rivals to invest in a huge increase in capacity, and, correspondingly, to drop tremendously the price of data per gigabyte. New T-Mobile will be able to leverage a unique combination of complementary assets to unlock massive synergies in order to build a world-leading nationwide 5G network that will deliver unprecedented services to consumers, increasingly disrupt the wireless industry, and ensure U.S. leadership in the race to 5G."

“I’m sure the FCC will give the proposed T-Mobile/Sprint merger careful consideration. But it shouldn’t begin with any preconceived notions about market power and market definition. In a rapidly changing and technologically dynamic marketplace, there simply is no place for simplistic catechisms like 'no 4 to 3 merger’ that purport to dictate the outcome of the market power analysis," said Free State Foundation President Randolph May. “The FCC’s indeterminate 'public interest' standard, by definition, is an invitation for abuse as special pleaders of one sort or another seek to deny, slow down, or condition the merger to advance their own particular interests. It’s hard to blame the special pleaders for trying to use the process for their own ends. But the FCC — especially this reform-minded FCC — should not aid and abet this age-old phenomenon."

The companies listed the following public-interest benefits of the deal (an FCC review goes beyond antitrust and competitive harm issues to look at public-interest issues as well).

The companies say the combination would:

  1. "Build a world-class nationwide 5G network – leapfrogging Verizon and AT&T. With a nearly $40B investment to combine the complementary spectrum, sites, and assets of T-Mobile and Sprint, New T-Mobile will deliver a robust, nationwide world-class 5G network and services more quickly than either company on a standalone basis.
  2. "Ensure American consumers will pay less and get more. As New T-Mobile expands its capacity, the other guys will have to compete… and all consumers will win – to the tune of up to a 55% decrease in price per GB and as much as a 120% increase in cellular data supply, according to third-party analysis in the PIS.
  3. "Allow millions of Americans to 'cut the cord.' New T-Mobile’s robust, nationwide 5G network will eliminate the speed and capacity differential between mobile and in-home wired broadband for many Americans, accelerating the trend of cord-cutting as consumers use mobile as their only access to the internet.
  4. "Bring rural Americans better service. We’ll bring increased broadband coverage to rural Americans, along with improved signal quality and increased network capacity. And we’ll offer 'Un-carrier' service at 600 or more new stores and up to five call centers located to serve rural areas and small towns.
  5. "[Provide] new choices for video and enterprise [business] customers. New T-Mobile will have the scale, spectrum and financial strength to disrupt the enterprise segment while also bringing products and services that will bring much-needed competition, innovation and consumer choice to these areas.
  6. "Create thousands of additional American jobs. The merger will create more jobs at New T-Mobile from day one and going forward than T-Mobile and Sprint would have on their own."

The FCC is currently reviewing the application and public interest statements for the merger for completeness, according to an FCC spokesperson, which is why the shot clock had yet to start on the deal at press time Tuesday afternoon.

The applications and statement were filed Monday (June 18) and posted on the FCC's web site Tuesday.

The FCC will signal it is reviewing the terms of the deal when it puts it out for public comment--there is already an open docket ready to receive them--after which the FCC will start the informal 180-day shot clock on the deal.

Currently, the FCC is looking to make sure the application is complete.

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