Sprint, Nextel, Said to Divert FCC’s Attention from Merger Proposal Shortcomings
Opponents of a proposed Sprint-Nextel merger warned the FCC the companies tried to divert its attention from key issues in a reply to oppositions last week (CD April 13 p4). Sprint and Nextel said most objections didn’t relate to their merger review and should be addressed elsewhere, if at all. But opponents strongly disagreed, citing excessive market concentration, roaming agreements, spectrum aggregation and spin-off of the Sprint local wireline business as major concerns.
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CTCNet said that, contrary to the applicants’ arguments, issues of market power from combining 2 operators with substantial 2.5 GHz assets are “merger- specific.” Speaking for 1,000-plus community technology centers, the group said the FCC “must not allow itself to be misled by the applicants’ attempt to diminish the significance of their combined holdings.”
Several opponents said the merger would create a dominant high-speed wireless multimedia service provider since competitors would have no alternative spectrum to use, despite assertions otherwise by Sprint and Nextel. NY3G said none of the bands Sprint and Nextel identified are “adequate substitutes” for the EBS/BRS band because they don’t provide “nearly the same amount of spectrum” competitors need for high-speed data-intensive service. CTCNet said spectrum outside the 2.5 GHz band wouldn’t be available for competitors, since “no auctions have been scheduled, substantial band clearing would be needed and no equipment has ever been developed that will operate on such bands.”
Smaller wireless carriers seeking a policy in favor of voice and data roaming rebutted Sprint/Nextel arguments that roaming should be addressed only in “industry-wide” proceedings under way at the FCC. U.S. Cellular said it’s “entirely appropriate for the FCC to establish important policies in ruling” on the merger, as it did in evaluating the Cingular-AT&T Wireless transaction, where it established criteria for evaluating wireless mergers.
CWA and IBEW disagreed with a Sprint-Nextel claim that it’s not germane for the FCC to evaluate the impact of the local spin-off of Sprint’s local customers. They called spin-off “a key component” of the transaction, saying the FCC is “compelled” to evaluate its potential harm and protect against it. CWA and IBEW said the firms’ “reluctance” to commit to an equitable allocation of debt and assets in the ILEC separation transaction raises “serious questions” about the companies’ intentions.
The Safety & Frequency Equity (SAFE) Competition Coalition complained Sprint and Nextel failed to provide a “substantive” response to its competitive concerns, deflecting the Commission’s attention away from them. The combined entity would hold nearly all available ESMR spectrum and have “absolutely no incentive to provide its sole viable competitors [SAFE members] in… dispatch markets with access to ESMR spectrum through secondary markets,” SAFE said. The N.J. Div. of the Ratepayer Advocate said unless the FCC imposes “appropriate conditions” to protect competition and consumers it shouldn’t approve the transaction.
Speaking on behalf of disabled persons, several groups urged the FCC to approve the merger. Citing positive longstanding relationships with both applicants, Self Help for Hard of Hearing People, Communication Service for the Deaf and Horizons for the Blind said they expected the merged company to continue to serve the disabled and be in a better position to improve that service.