CWA reacts to FCC’s formal approval of T-Mobile-Sprint merger

The Federal Communications Commission (FCC) formally approved the T-Mobile-Sprint merger, following a 3-2 vote. The FCC’s review process governing the T-Mobile-Sprint transaction has been fundamentally flawed, lacking in transparency and failing to adhere to existing FCC rules and precedent.

“CWA’s primary objections to this merger remain focused on its substantial public interest harm to competition, leading to higher prices and the loss of as many as 30,000 jobs,” said Debbie Goldman, CWA Research and Telecommunications Policy Director. “Although the FCC Order acknowledges the merger will likely lead to store closures and job loss, the FCC fails to protect workers with employment-related conditions. And though the FCC concedes that the merger would likely lead to price increases, it places blind faith in the companies’ unsubstantiated pledges and commitments which are filled with loopholes. The divestiture deal with DISH fails to resolve the anti-competitive harms, as it simply creates DISH as T-Mobile’s largest customer, not a true competitor in the marketplace.”  

For these reasons and more, the pending state attorneys general lawsuit seeking to block the proposed merger is in a strong position to protect consumers and workers from this anti-competitive transaction.”

In his dissenting statement, FCC Commissioner Geoffrey Starks noted:

“Notwithstanding the fact that the bulk of the savings realized through this merger will undoubtedly come from consolidating operations and thereby reducing staffing, the Order only grudgingly concedes that ‘the transaction has ‘the potential to lead to store closings’ and that ‘some job losses are possible . . . .’ But the record contains evidence that between 20,000 and 30,000 U.S. jobs could be lost as a result of this transaction, the bulk of them in retail 

… 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.

...In short, I believe that T-Mobile and Sprint have not proven that their merger will benefit the public interest.  Vague promises do not change what was true when this deal was first proposed and what remains true today – the harms from this merger are not overcome by any condition imposed in the majority’s order.  While I hope for the sake of consumers that I am wrong, I fear that we will one day look back at this decision and recognize it as a moment that forever changed the U.S. wireless industry, and not for the better.”

In her dissenting statement, FCC Commissioner Jessica Rosenworcel noted: 

“Shrinking the number of national providers from four to three will hurt consumers, harm competition, and eliminate thousands of jobs.  In deciding to overlook these harms, the Federal Communications Commission and the Department of Justice have been wooed by a few unenforceable concessions and hollow promises from the two companies involved.  

[T]his agency’s decision-making overlooked the work of expert staff, undermined other agencies with oversight authority like the Department of Justice, and deprived the public a meaningful opportunity to participate...Once the agency finally had legal, engineering, and economic analysis produced by expert staff, key parts of it were rewritten by the FCC’s political leadership behind closed doors...Significant parts of the initial draft decision were rewritten in the eleventh hour and behind closed doors…

...So I dissent to the FCC’s decision to consolidate the wireless market in the hands of three companies.  I dissent to the process the agency used to reach this result, which hid too much of the negotiations and this decision out of view from the public.  And I dissent to the remedies the FCC adopts that gamble our 5G future on a new wireless entrant and put all the risk of this merger on the backs of American consumers.” 

Other organizations, including Rural Wireless Association, Free Press, and Public Knowledge also expressed their disappointment with the order.