The announcement over the weekend that AT&T seeks to takeover Leap Wireless (Cricket) is a clear sign that whatever vestiges of competition existed between nationwide carriers and competitive carriers in the past have now all but disintegrated. Rampant industry consolidation exists today and fosters an anti-competitive and anti-consumer environment. The market research firm iGR recently noted that the number of Americans subscribing to regional and small operators (RSOs) has dropped from approximately 22.2 million in 2012 to just 12.5 million this year. A dearth of RSOs leads to higher prices for network equipment, a lack of interoperable mobile devices, higher roaming costs, and dozens of other systemic problems – all of which inevitably leads to higher consumer prices and fewer marketplace choices. The Rural Telecommunications Group, Inc. (RTG – The Rural Wireless Advocate) believes that the health of the entire mobile wireless industry hinges on the competitive presence of carriers of all sizes: from the four nationwide carriers to the various regional carriers down to the much smaller, but vital to competition, rural carriers. Were Cricket to disappear like MetroPCS and ALLTEL before it, the U.S. would find itself with essentially just one remaining (and downsizing) regional carrier: US Cellular. American consumers naturally assume that as an industry matures, consumers will find more competitors offering their services in more locations. This is not the case in the domestic mobile wireless industry, especially if AT&T is allowed to swallow-up Cricket uncontested.
“Not too long ago AT&T repeatedly asserted to the FCC that ‘Leap and other regional providers are increasing competitive threats’ to AT&T” said Carri Bennet, RTG’s General Counsel. “Yet in the few short years since those AT&T statements were made, those competitive regional carriers have all but disappeared through consolidation. So if all of these regional providers are no longer present to provide the ‘competitive threat’ to large carriers, then AT&T should at least have the courtesy to tell the Commission — and more importantly American consumers — who it believes will assume that role as a serious competitor.”
While RTG has not yet reviewed the specifics of the Leap/AT&T transaction, this much is readily apparent: the disappearance of Cricket would mean one less facilities-based LTE provider to tens of millions of Americans as well as AT&T acquiring between 10-50 megahertz of additional spectrum in dozens of Top-100 markets. RTG cannot fathom how mobile consumers can possibly be helped by these sobering developments. Indeed, RTG strongly believes that after the FCC and the Department of Justice review this proposed transaction they will conclude that the elimination of Cricket is anticompetitive.
About RTG – Headquartered in Washington, DC, the Rural Telecommunications Group, Inc. (RTG) is a trade association representing rural wireless carriers who each serve fewer than 100,000 subscribers. RTG’s members have joined together to speed delivery of new, efficient and innovative telecommunications technologies to remote and underserved communities. ruraltelecomgroup.org @RTGwireless
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