FCC Approves T-Mobile Buy of UScellular Wireless Assets; DOJ Won't Oppose

Groups concerned about the effect on competition criticized DOJ’s announcement. In what some saw as an unexpected twist, Gail Slater, DOJ's Antitrust Division chief, also raised concerns about the loss of UScellular as a competitor and the overall competitiveness of the U.S. wireless sector.

When DOJ and the FCC approved T-Mobile’s buy of Sprint in 2020, regulators tried to lay the groundwork for Dish Wireless to emerge as the fourth national carrier, replacing Sprint.

“For years, Americans have witnessed the too-familiar pattern of local or regional companies that discern and cater to their customers’ needs vanishing in favor of the ‘one size fits all’ approach of national brands,” Slater said. “Continued spectrum aggregation by the Big 3 threatens to impede the path for a fourth national player to emerge and challenge the entrenched incumbents with new and innovative offerings.” She also noted that a regional player like UScellular doesn’t offer the same level of competition as a fourth national carrier.

The wireless industry has reached “a pivotal moment,” Slater said. The deal comes “near the tail end of a decades-long trend toward consolidation-by-acquisition that has now left most consumers with meaningful choices among just the ‘Big 3’ national carriers,” she said. “The stark facts of today merit our immediate attention: together, the Big 3 account for more than 90 percent of the roughly 335 million mobile subscriptions in the United States.”

New Street’s Blair Levin told investors Friday that Carr hasn’t raised similar concerns about the need for a fourth provider and didn’t before FCC approval of the T-Mobile/Sprint transaction, either.

DOJ potentially could prove to be a force within the administration to get the FCC to strike a deal with EchoStar, parent of Dish, on its spectrum, without it having to file for bankruptcy, Levin predicted. “While the statement does not mention the FCC, it appears that both the long-term civil servants in the Anti-Trust Division and the new leadership have concerns about the way that the FCC is currently making it more difficult for [Dish] to succeed in building out a fourth network.”

A former top FCC official said “DOJ’s tip of the hat to preserving the notion of a fourth wireless carrier shows that the career staff in the Antitrust Division are still holding on to the belief that such a premise was needed to justify the T-Mobile/Sprint combination.” Phoenix Center Chief Economist George Ford noted that Carr appears to have “written off Dish, to the point of actively seeking its demise and the repurposing of its spectrum.”

View From the Ground

The top three carriers “continue to tout their ‘improved networks’ but the reality on the ground tells a different story,” said Carri Bennet, outside general counsel to the Rural Wireless Association, in an emailed statement. “The T-Mobile/Sprint merger was a bridge too far, and we have seen the consequences ever since -- fewer choices, higher prices, and degraded service for rural consumers and all Americans travelling through rural areas.”

Public Knowledge Senior Vice President Harold noted that AT&T and Verizon also have deals with UScellular to buy other parts of its spectrum portfolio (see 2507070030 and 2507080053). DOJ’s analysis “clearly shows these three transactions, taken together, will stifle future competition and inevitably lead to higher prices for consumers.”

The announcement “provides further proof that the FCC needs to consider all three of these transactions together under its broader public interest standard, and do what the DOJ under its more limited standard could not” and either block the merger or mandate conditions to protect consumers, Feld said.

Others questioned Slater’s cautious view of the transaction.

The analysis appears to be “a bit out of step with how competition actually plays out,” emailed Kristian Stout, innovation policy director for the International Center for Law & Economics. For most consumers, wireless competition “is experienced at the local level, and the empirical work I’ve seen shows that three well-capitalized carriers can sustain healthy price and quality outcomes.” Keeping the field at three players “can yield scale efficiencies -- particularly in how spectrum is financed and deployed over a wide footprint -- that ultimately benefit users.”

Joe Kane, the Information Technology and Innovation Foundation's director of broadband and spectrum policy, said he’s not surprised at the different views of the DOJ and the FCC. “The FCC has a closer eye on this market and … is likely more attuned to the pro-consumer outcomes produced by the current market structure,” he said. “Just adding more firms doesn't necessarily benefit consumers.”

Highlighting the importance of convergence, Kane noted that wireless carriers are now also offering fixed wireless home internet. “The overall connectivity market has a growing number of players such that consolidation is even more likely to benefit consumers.”

Communications Workers of America, meanwhile, warned the FCC that early indications are that UScellular is already looking to downsize workers as it moves closer to exiting as a regional carrier. “CWA remains concerned that the proposed transaction will further entrench and extend T-Mobile’s dominant position in many local labor markets for retail wireless workers, significantly harming competition and the public interest,” said a filing posted Friday in docket 24-286.