FCC Goes Deep on T-Mobile/UScellular Deal as Both Carriers Receive Letters
The FCC Wireless Bureau and Office of Economics and Analytics sent letters to T-Mobile and UScellular on Friday asking a battery of questions about their proposed transaction. Responses are due not later than Jan. 17. The T-Mobile letter explores in depth the carrier's arguments made in a September public interest statement (see 2409160029) and an accompanying declaration from Ankur Kapoor, T-Mobile's chief network officer.
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The companies announced an agreement in May where T-Mobile would buy “substantially all” of UScellular’s wireless operations, including some of its spectrum, in a deal valued at $4.4 billion (see 2405280047). The Rural Wireless Association, EchoStar and Communications Workers of America have urged that the FCC reject the transaction (see 2412100044).
The letter to T-Mobile cites Kapoor’s statements about how the acquired spectrum would help round out the carrier's spectrum footprint. It quotes Kapoor as saying T-Mobile’s “'lack of spectrum depth inhibits [its] deployment in the footprint and results in slower speeds, less capacity, and higher operating costs relative to the rest of the country.’" It notes Kapoor "asserts that the Proposed Transaction would bring [T-Mobile's] ‘spectrum holdings and coverage closer to our national averages and result in substantially improved service for both T-Mobile and UScellular customers as compared to the service offered today by either standalone network in the Footprint.’”
Among 29 areas of inquiry, the letter asks that T-Mobile “describe in detail and provide plans, analyses, and reports relied on in preparing, or that otherwise provide basis and support for, these statements or that discuss, in the Relevant Area, speed or quality of service, including the amount of spectrum and capacity that are required to meet consumer demand, including projected demand.”
The letter to UScellular is nearly as long T-Mobile's, with 23 sets of questions. Among the areas it asks about are UScellular’s fixed-wireless deployments, compatibility of its handsets with the T-Mobile network and the proposed deal's effect on the Lifeline program.
The letter includes questions about a declaration by UScellular CEO Laurent Therivel. For example, it asks, “Describe in detail the ‘spectrum and network cost challenges’ referred to in Mr. Therivel’s declaration and provide all plans, analyses, and reports related to these challenges and UScellular’s network investments." In addition, it asks that the company provide its "average costs associated with upgrading” a 4G site to a 5G site and with deploying a new 5G site.
The FCC letter asks about UScellular’s claims that it faces “structural disadvantages” as a smaller carrier and its purported “need to respond to evolving industry dynamics.” It probes claims that UScellular has lost 500,000 customers since 2020 and the effect on network investments and cellsite construction.
Therivel said in his declaration that the company had hired a consulting firm, which found “no operational improvements or restructuring of UScellular’s wireless operations would suffice to reestablish the company as a sustainable competitor.” The FCC asks for details about this report. “Provide all documents discussing the review and conclusions of the consulting firm referenced here.”
T-Mobile CEO Mike Sievert said at a UBS financial conference this month he remains confident regulators will approve the deal. “I can promise you better networks and lower prices right from the get-go, and the company, of course, will benefit from the synergies, and it's highly accretive,” he said: “This is going to be a win all the way around, and I'm confident the government will see it that way as well.” T-Mobile announced Friday it will release Q4 results Jan. 29.