Today the Rural Wireless Association (RWA) filed an ex parte letter with the Federal Communications Commission criticizing the vague, unsubstantiated merger conditions proposed by T-Mobile and Sprint (“New T-Mobile”) in a May 20 filing to the FCC.
Highlighting New T-Mobile’s promises to “build a world-leading 5G network” and “provide high-speed 5G services for rural America” as illusory, flashy proposals with no substantive detail or explanation, RWA’s letter details how these conditions are drastically insufficient to protect rural consumers against the clear harms this market-consolidating merger would bring. RWA explains how New T-Mobile’s proposed “verification and enforcement regime” will not ensure the merged company upholds these commitments, and how the merger will advantage New T-Mobile and harm consumers and rural wireless providers.
RWA’s filing highlights that, while New T-Mobile may have the spectrum necessary to provide 5G services across the country, installing the thousands of miles of fiber and 200,000-plus cell sites required to make a 5G network operational in 99 percent of rural America will be a timely and costly endeavor – one that will cost the merged company at least $60 billion more than it proposes investing in its post-merger network. Add this to the fact that certain technologies that will make service to rural America possible have yet to be fully developed, and it becomes clear that New T-Mobile’s proposed three- and six-year rural 5G buildout “commitments” are nothing more than open-ended statements, with no concrete plan of action, being sold to the FCC like 5G snakeskin oil.
RWA’s letter further details how the “verification and enforcement regime” that will allegedly keep New T-Mobile honest and committed to its open-ended promises is itself an ambiguous, self-serving representation that will not provide the millions of Americans who will be harmed by this merger any sort of protection once New T-Mobile breaches its commitments. For example, while the proposed 5G buildout verification regime will require New T-Mobile to submit self-audited buildout and coverage reports to track its rollout progress, it is unclear who (if anyone) will be tasked with investigating and double-checking the reports for coverage misstatements. Do we really want New T-Mobile grading its own homework? And while New T-Mobile promises to pay a “voluntary contribution” to the U.S. Treasury for every commitment it breaches, its payment of such a contribution will be tax deductible and pale in comparison to the $26.5 billion-dollar cost of the merger, the billions in revenue New T-Mobile will receive as a result of the transaction, and the $100 billion-plus it will take to actually meet its commitments.
“New T-Mobile has great salesmen working the FCC over on the 5G Fast mantra, but buyer beware, this is one purchase whose purported money-back guarantee is anything but. The Commission needs to read the fine print before signing onto New T-Mobile’s sleight of hand proposal,” warned Carri Bennet, RWA General Counsel.