Rosenworcel: T-Mobile/Sprint Meld Means Cozy Wireless Oligopoly

The FCC's release of its T-Mobile-Sprint merger approval decision Tuesday (Nov. 5) drew immediate reaction from inside and outside starting with the dissenting commissioners, who were the last to, reluctantly, vote the item, which already had three Republican "yeas."

Commissioner Jessica Rosenworcel issued a stinging, 17-page dissent.

Related: Rosenworcel Votes Against T-Mobile/Sprint

"The T-Mobile-Sprint merger will end a golden age in wireless that helped bring to market lower prices and more innovative services," she wrote. "It will mean an end to the competitive rivalry that reduced prices by 28% during the last decade. Similarly, the pressure to support unlimited data plans and free international roaming will fade. Offers to pay early termination fees to help families switch to plans that fit their lives will fall by the wayside. And the network improvements that will bring us the next generation of wireless service, known as 5G, will proceed more slowly and yield fewer jobs without the fuel of competitive pressure. In short, our existing wireless market will devolve into a cozy oligopoly dominated by just three carriers."

Fellow dissenter Commissioner Geoffrey Starks agreed. “The proposed transaction is exactly the type of merger that the Justice Department and the Commission have discouraged and rejected in the past: one that would harm competition and result in higher prices and poorer service, particularly for the most vulnerable consumers...“In the short term, this merger will result in the loss of potentially thousands of jobs. In the long term, it will establish a market of three giant wireless carriers with every incentive to divide up the market, increase prices, and compete only for the most lucrative customers.”

The Open Markets Institute added its voice to the chorus.

"T-Mobile’s acquisition of Sprint already threatened to dramatically reduce market competition and drive up bills for consumers as a result," said institute researcher Matt Buck. "But today’s approval by the Federal Communications Commission of the Justice Department’s settlement represents the culmination of two agencies’ overwrought attempt to see this merger through. Not only did Republican commissioners convey full support for the merger before they’d even read the DOJ’s settlement, but the FCC also didn’t put out the settlement for public comment.

"Nor did the FCC even stop to think that it should pause its review after news broke that Sprint may have defrauded the government out of tens of millions of dollars by exaggerating how many low-income people it served. While the FCC’s rubber-stamp of the merger is disappointing but not surprising, the group of states challenging the merger in New York next month represents our best hope of protecting our markets and making up for this massive enforcement failure."

Free Press echoed the refrain:

“Chairman Pai has finally gotten an FCC vote on his predetermined conclusion that the T-Mobile/Sprint merger benefits wireless consumers," said Free Press campaign manager Nilda Muhr. "He decided months ago that he would approve the deal, even as FCC staff were still conducting their review."

“Given the harmful impacts of this merger and the shady manner in which the FCC’s approval was reached behind closed doors, said Muhr, "the public should have had the opportunity to weigh in and comment before the full agency voted. But Pai’s FCC doesn’t care about public input." 

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.