RWA has filed a Petition to Deny the proposed Sprint/T-Mobile Merger. The merger is anticompetitive, would be harmful to consumers (especially those in rural markets), and should be denied.
RWA’s Petition identifies harm in the roaming marketplace that would befall rural consumers and rural carriers if the merger is allowed to take place and notes that Sprint, unlike T-Mobile, has worked to develop mutually beneficial, strategic roaming relationships with rural wireless carriers. T-Mobile, on the other hand, has refused to allow its customers to roam on rural carrier networks – even when its own networks are substandard or nonexistent. And, while T-Mobile is required by law to allow rural carriers to roam on its network, the rates it charges are often twenty times what RWA members pay Sprint for comparable service and coverage, and are nowhere near “commercially reasonable.”
Spectrum access is another concern. Unlike Sprint, T-Mobile has historically warehoused spectrum, been slow to build out rural markets, and has not entered into strategic build out partnerships with rural carriers. The new T-Mobile would also exceed its liberalized spectrum screen in over 63% of U.S. counties – including 100% of the top 130 most populous counties. There are 37 states or territories (out of 57) where over half of the counties exceed the spectrum screen. In predominantly rural states, more than 80 percent of the counties in each state will exceed the 238.5 megahertz spectrum screen post-merger. RWA’s analysis of the super concentrated spectrum holdings New T-Mobile would hold in a post-merger world are so far beyond acceptable that all American consumers should weigh in and stop the concentration of spectrum sought to be undertaken by what would become a jointly owned German and Japanese company. Spectrum belongs to the American people; allowing over two thirds of it to be controlled by one entity is not in the public interest. Further, in the areas where T-Mobile and Sprint combined would not surpass the spectrum screen, other smaller regional and rural carriers are providing robust mobile services.
“T-Mobile has focused on urban America for years, making its lack of concern for rural consumers clear with its limited coverage, unreasonable roaming arrangements, and spectrum warehousing – and most recently by deliberately failing to complete calls placed by T-Mobile customers intended for customers of rural local exchange carriers,” said RWA General Counsel, Carri Bennet. “The major question facing the FCC and DOJ is whether American consumers will be better off with one less retail option, one less wholesale network option for MVNOs and IoT, and one less potential disrupter in the innovation, device and application marketplace. RWA asserts the answer is a resounding and unqualified ‘No.’”
The FCC must also consider the national security implications of the proposed transaction. In particular, RWA urges the FCC to consider the supply chain issues at play in the proposed transaction, and to do so with a heightened level of scrutiny given passage of the National Defense Authorization Act for Fiscal Year 2019. Further, the FCC should defer a final decision on the national security implications of the proposed transaction until both CFIUS and Team Telecom finish their review.