RWA Files Reply to Opposition in Sprint/T-Mobile Merger; Serious Concerns Remain

The Rural Wireless Association, Inc. has filed a Reply to Opposition in the Sprint/T-Mobile Merger proceeding. The merger is anticompetitive, would be harmful to consumers (especially those in rural markets), and should be denied.

RWA’s Reply explains that the proposed transaction will be detrimental to the roaming market. “Eliminating a roaming competitor harms not only those living in rural America, but also those traveling in rural America,” said RWA General Counsel, Carri Bennet. “Sprint’s roaming rates are 20 times lower than those of T-Mobile. Eliminating Sprint will drive roaming rates up, making it impossible for many rural carriers to provide affordable service to their rural customers.”

RWA also highlights T-Mobile’s rural call completion shenanigans, noting that they reflect anti-consumer behavior by a corporation that promotes itself as being a consumer friendly “un-carrier.” The FCC fined T-Mobile $40 million for inserting a false ring tone in hundreds of millions of calls annually.  RWA argues that this behavior, aimed at improving T-Mobile’s bottom line, should be weighed heavily in determining whether or not to allow New T-Mobile to acquire 50 million Sprint subscribers that could suffer future abuse by the Uncarrier. “These corporate cost cutting measures have real consequences,” said Bennet. “Imagine not being able to reach your ailing mother in rural Wisconsin because your T-Mobile phone rings and rings, but is never actually connected to her local telephone network, and she therefore never gets your call.”

Sprint and T-Mobile claim that, once combined, they will improve their coverage in rural areas. But the record does not support claims of vastly improved rural coverage. In fact, the needle on rural coverage moves only slightly if the companies are combined. Moreover, most of New T-Mobile’s rural customers would be forced to settle for significantly lower network performance than its urban and suburban customers. “This merger will not solve the digital divide,” said Bennet. “In fact, the digital divide is likely to worsen, not improve, post-merger.”

RWA is also concerned that the U.S.’s race to 5G may be compromised by the merger.  By combining, T-Mobile and Sprint are seeking to improve their bottom line. Cost savings translates to improved profitability that will be passed on to investors. Sprint’s biggest investor is Japanese-owned Softbank and T-Mobile’s is German-owned Duetsche Telekom.  Both of these foreign-owned companies are also competing in the 5G race utilizing Chinese-based equipment vendors. This, in turn, serves to improve China’s position in the race to 5G – all on the backs of U.S. consumers.

2018-10-31T16:41:37-04:00 October 31st, 2018|Categories: Advocacy, Press Releases|
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