FCC Urged to Deny T-Mobile's Buy of Wireless Assets from UScellular
The Rural Wireless Association, EchoStar and Communications Workers of America filed FCC petitions asking that the agency reject T-Mobile’s proposed acquisition of "substantially all” of UScellular’s wireless operations, including some spectrum (see 2405280047). Public interest and consumer groups also opposed approval. The deal is relatively small as telecom mergers go -- valued at about $4.4 billion, including $2 billion in assumed debt -- but has ignited substantial opposition. UScellular is the nation’s fifth-largest wireless carrier.
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Despite applicants’ arguments that the proposed transaction “is the best path forward for UScellular, there is considerable evidence demonstrating that UScellular can and will remain viable without T-Mobile’s assistance as a regional or local mobile wireless carrier or even as hybrid fixed and mobile wireless carrier,” RWA said in a petition posted Tuesday in docket 24-286.
RWA cited potential harm to its members. The deal will “anticompetitively concentrate spectrum” in the hands of the three major nationwide carriers, “limiting access to spectrum for rural carriers,” it said. The disappearance of UScellular as a reciprocal roaming partner “will increase costs for rural carriers, to the point where the sustainability of their businesses is threatened.” The combination will “waste critical USF support already received by UScellular for its 5G network build out when T-Mobile inevitably shuts down UScellular’s” cellsites. “Allowing T-Mobile to lock UScellular customers’ devices to its network indefinitely will also unnecessarily restrict consumer choice.”
EchoStar noted it invested billions of dollars in a facilities-based 5G network built “from scratch” and “has firsthand experience with how T-Mobile’s conduct over the last five years has created barriers to meaningful competition.” The commission should “recognize that T-Mobile’s strategy is not about improving service or enhancing competition; it is about eliminating competition, hampering competitive use of even more spectrum, and solidifying its already-dominant position.”
EchoStar is the parent of Dish Wireless, a carrier launched with the encouragement of federal regulators as part of T-Mobile’s 2020 buy of Sprint (see 200401006). License transfers can lead to anticompetitive practices, spectrum warehousing and “other harms that could hinder the efficient use of spectrum,” EchoStar said. “The proposed transaction would cause all three of these categories of outcomes.”
The proposed merger “would substantially lessen competition in local markets where UScellular operates, hurting workers, consumers, and other rural carriers,” CWA warned.
Under FCC rules “the burden is on T-Mobile and UScellular to show that its transaction will enhance competition in both upstream labor markets as well as downstream retail markets,” but the companies have not, CWA said. The union said the carriers so far have shone little light on implications for the workforce and potential job losses: “T-Mobile already has significant market power in many local labor markets for retail wireless workers.”
“If this transaction is approved, more than 34 million Americans will lose a wireless competitor,” public interest and consumer groups said: “A transaction of this magnitude, which completely wipes out a smaller, competitive market participant does not serve the public interest, as competition will be harmed on local and national levels.” Public Knowledge, the Open Technology Institute at New America, the Benton Institute for Broadband & Society, Access Humboldt and the Institute for Local Self-Reliance endorsed the petition.
The groups noted that UScellular has announced side deals for selling other spectrum licenses to Verizon and AT&T (see 2410180004 and 2411070026): “Propelling only the top three competitors while eliminating a smaller competitor is an anti-competitive move that will harm the market and raise prices for consumers for years to come.”