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Dish closes Boost Mobile purchase, following T-Mobile/Sprint merger
T-Mobile today announced that it has closed a deal that divests Sprint’s pre-paid businesses, including Boost and Virgin Mobile. The news finds Dish entering the wireless carrier game in earnest, courtesy of the $1.4 billion deal.
The whole thing was, of course, a key part of T-Mobile’s bid to merge with Sprint. It was a relatively small concession to those worried that such a deal would decrease competition in the market, as the number of major U.S. carriers shrunk from four down to three. The $26 billion T-Mobile/Sprint deal was finally completed in April of this year, and has already resulted in hundreds of lost jobs, as reported last month by TechCrunch.
The deal gives Dish a nice head start in the pre-paid phone game, with north of 9 million customers and access to T-Mobile’s wireless network for the next seven years. It also finds current Dish’s COO John Swieringa stepping in to lead the new subsidiary. Oh, and there’s a new Boost logo, too:
Dish
See? It’s basically the old Boost Mobile logo, but with the little Dish wireless symbols in the middle, to really show you who’s boss.
Dish used the opportunity to announce a new plan for Boost users with 15GB of data for $45, and has already begun switching consumers with compatible devices over to the new T-Mobile-backed network.
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Robocallers face $225M fine from FCC and lawsuits from multiple states
Two men embodying the zenith of human villainy have admitted to making approximately a billion robocalls in the first few months of 2019 alone, and now face an FCC fine of $225 million and a lawsuit from multiple attorneys general that could amount to as much or more — not that they’ll actually end up paying that.
John Spiller and Jakob Mears, Texans of ill repute, are accused of (and have confessed to) forming a pair of companies to make millions of robocalls a day with the aim of selling health insurance from their shady clients.
The operation not only ignored the national Do Not Call registry, but targeted it specifically, as it was “more profitable to target these consumers.” Numbers were spoofed, making further mischief as angry people called back to find bewildered strangers on the other end of the line.
These calls amounted to billions over two years, and were eventually exposed by the FCC, the offices of several attorneys general and industry anti-fraud associations.
Now the pair have been slapped with a $225 million proposed fine, the largest in the FCC’s history. The lawsuit involves multiple states and varying statutory damages per offense, and even a conservative estimate of the amounts could exceed that number.
Unfortunately, as we’ve seen before, the fines seem to have little correlation with the amounts actually paid. The FCC and FTC do not have the authority to enforce the collection of these fines, leaving that to the Department of Justice. And even should the DoJ attempt to collect the money, they can’t get more than the defendants have.
For instance, last year the FTC fined one robocaller $5 million, but he ended up paying $18,332 and the market price of his Mercedes. Unsurprisingly, these individuals performing white-collar crimes are no strangers to methods to avoid punishment for them. Disposing of cash assets before the feds come knocking on your door is just part of the game.
In this case the situation is potentially even more dire: the DoJ isn’t even involved. As FCC Commissioner Jessica Rosenworcel put it in a statement accompanying the agency’s announcement:
There’s something missing in this all-hands effort. That’s the Department of Justice. They aren’t a part of taking on this fraud. Why not? What signals does their refusal to be involved send?
Here’s the signal I see. Over the last several years the FCC has levied hundreds of millions in fines against robocallers just like the folks we have here today. But so far collections on these eye-popping fines have netted next to nothing. In fact, it was last year that The Wall Street Journal did the math and found that we had collected no more than $6,790 on hundreds of millions in fines. Why? Well, one reason is that the FCC looks to the Department of Justice to collect on the agency’s fines against robocallers. We need them to help. So when they don’t get involved—as here—that’s not a good sign.
While the FCC’s fine and the lawsuit will certainly put these robocallers out of business and place further barriers to their conducting more scam operations, they’re not really going to be liable for nine figures, because they’re not billionaires.
It’s good that the fines are large enough to bankrupt operations like these, but as Rosenworcel put it back in 2018 when another enormous fine was levied against a robocaller, “it’s like emptying the ocean with a teaspoon.” While the FCC and states were going after a pair of ne’er-do-wells, a dozen more have likely popped up to fill the space.
Industry-wide measures to curb robocalls have been underway for years now, but only recently have been mandated by the FCC after repeated warnings and delays. Expect the new anti-fraud frameworks to take effect over the next year.
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FCC mandates strict caller ID authentication to beat back robocalls
The FCC unanimously passed a new set of rules today that will require wireless carriers to implement a tech framework to combat robocalls. Called STIR/SHAKEN, and dithered over for years by the carriers, the protocol will be required to be put in place by summer of 2021.
Robocalls have grown from vexation to serious problem as predictable “claim your free vacation” scams gave way to “here’s how to claim your stimulus check” or “apply for coronavirus testing here” scams.
A big part of the problem is that the mobile networks allow for phone numbers to be spoofed or imitated, and it’s never clear to the call recipient that the number they see may be different from the actual originating number. Tracking and preventing fraudulent use of this feature has been on the carriers’ roadmap for a long time, and some have gotten around to it in some ways, for some customers.
STIR/SHAKEN, which stands for Secure Telephony Identity Revisited / Secure Handling of Asserted information using toKENs, is a way to securely track calls and callers to prevent fraud and warn consumers of potential scams. Carriers and the FCC have been talking about it since 2017, and in 2018 the FCC said it needed to be implemented in 2019. When that hadn’t happened, the FCC gave carriers a nudge, and at the end of the year Congress passed the TRACED Act to spur the regulator into carrying out its threat of mandating use of the system.
Rules to that effect were proposed earlier this month, and at the FCC’s open meeting today (conducted remotely), the measure passed unanimously. Commissioner Jessica Rosenworcel, who has been vocal about the lack of concrete action on this issue, gladly approved the rules but vented her frustration in a statement:
It is good news that today the Federal Communications Commission adopts rules to reduce robocalls through call authentication. I only wish we had done so sooner, like three years ago when the FCC first proposed the use of STIR/SHAKEN technology.
Commissioner Brendan Starks called the rules a “good first step,” but pointed out that the carriers need to apply call authentication technology not just on the IP-based networks but all over, and also to work with each other (as some already are) to ensure that these protections remain in place across networks, not just within them.
Chairman Ajit Pai concurred, pointing out there was much work to do:
It’s clear that FCC action is needed to spur across-the-board deployment of this important technology…Widespread implementation of STIR/SHAKEN will reduce the effectiveness of illegal spoofing, allow law enforcement to identify bad actors more easily, and help phone companies identify—and even block—calls with illegal spoofed caller ID information before those calls reach their subscribers. Most importantly, it will give consumers more peace of mind when they answer the phone.
There’s no silver bullet for the problem of spoofed robocalls. So we will continue our aggressive, multi-pronged approach to combating it.
Consumers won’t notice any immediate changes — the deadline is next year, after all — but it’s likely that in the coming months you will receive more information from your carrier about the technology and what, if anything, you need to do to enable it.
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FCC looks to mandate anti-robocall tech after prodding from Congress
The FCC is finally going to require wireless carriers to implement an anti-robocalling technology, after asking them nicely for more than a year to do so at their convenience. Of course, the FCC itself is now required to do this after Congress got tired of waiting on them and took action itself.
The technology is called Secure Telephony Identity Revisited / Secure Handling of Asserted information using toKENs, mercifully abbreviated to STIR/SHAKEN, and amounts to a sort of certificate authority for calls that prevents phone numbers from being spoofed. (This is a good technical breakdown if you’re curious.)
STIR/SHAKEN has been talked about for quite some time as a major part of the fight against robocalls, and in 2018 FCC Chairman Ajit Pai said that carriers would have until the end of 2019 to implement it. 2019 came and went, and while the FCC (and indeed carriers) took other actions against robocallers, STIR/SHAKEN went largely undeployed.
Meanwhile, Congress, perhaps tired of receiving scam calls themselves, managed to collectively reach across the aisle and pass the TRACED Act, which essentially empowers the FCC and other departments to take action against robocallers — and prevents carriers from charging for anti-robocall services.
It also ordered the FCC to set a timeline for STIR/SHAKEN implementation, which is what Pai is doing now.
“It’s clear that FCC action is needed to spur across-the-board deployment of this important technology. There is no silver bullet when it comes to eradicating robocalls, but this is a critical shot at the target,” he said in a statement issued today.
There does not, however, appear to be any great hurry. The proposal, which will be voted on at the FCC’s meeting later this month, would require voice service providers to implement STIR/SHAKEN by June 30… of 2021. And one-year extensions will be available to smaller providers who claim difficulty getting the system up and running.
In other words, you can expect to keep receiving strange calls offering discounts on cruises and warning you of IRS penalties for some time to come. Of course, there are some things you can do to stem the flow of scammers — check out our 101 on preventing robocalls for some simple tips to save yourself some aggravation.
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FCC proposes $208M in fines for wireless carriers that sold your location for years
The FCC has officially and finally determined that the major wireless carriers in the U.S. broke the law by secretly selling subscribers’ location data for years with almost no constraints or disclosure. But its Commissioners decry the $208 million penalty proposed to be paid by these enormously rich corporations, calling it “not properly proportioned to the consumer harms suffered.”
Under the proposed fines, T-Mobile would pay $91M; AT&T, $57M; Verizon, $48M; and Sprint, $12M. (Disclosure: TechCrunch is owned by Verizon Media. This does not affect our coverage in the slightest.)
The case has stretched on for more than a year and a half after initial reports that private companies were accessing and selling real-time subscriber location data to anyone willing to pay. Such a blatant abuse of consumers’ privacy caused an immediate outcry, and carriers responded with apparent chagrin — but often failed to terminate or even evaluate these programs in a timely fashion. It turns out they were run with almost no oversight at all, with responsibility delegated to the third party companies to ensure compliance.
Meanwhile the FCC was called on to investigate the nature of these offenses, and spent more than a year doing so in near-total silence, with even its own Commissioners calling out the agency’s lack of communication on such a serious issue.
Finally, in January, FCC Chairman Ajit Pai — who, it really must be noted here, formerly worked for one of the main companies implicated, Securus — announced that the investigation had found the carriers had indeed violated federal law and would soon be punished.
Today brings the official documentation of the fines, as well as commentary from the Commission. In the documents, the carriers are described as not only doing something bad, but doing it poorly — and especially in T-Mobile’s case, continuing to do it well after they said they’d stop:
We find that T-Mobile apparently disclosed its customers’ location information, without their consent, to third parties who were not authorized to receive it. In addition, even after highly publicized incidents put the Company on notice that its safeguards for protecting customer location information were inadequate, T-Mobile apparently continued to sell access to its customers’ location information for the better part of a year without putting in place reasonable safeguards—leaving its customers’ data at unreasonable risk of unauthorized disclosure
The general feeling seems to be that while it’s commendable to recognize this violation and propose what could be considered substantial fines, the whole thing is, as Commissioner Rosenworcel put it, “a day late and a dollar short.”
The scale of the fines, they say, has little to do with the scale of the offenses — and that’s because the investigation did not adequately investigate or attempt to investigate the scale of those offenses. As Commissioner Starks writes in a lengthy statement:
After all these months of investigation, the Commission still has no idea how many consumers’ data was mishandled by each of the carriers.
We had the power—and, given the length of this investigation, the time—to compel disclosures that would help us understand the true scope of the harm done to consumers. Instead, the Notices calculate the forfeiture based on the number of contracts between the carriers and location aggregators, as well as the number of contracts between those aggregators and third-party location-based service providers. That is a poor and unnecessary proxy for the privacy harm caused by each carrier, each of which has tens of millions of customers that likely had their personal data abused.
Essentially, the FCC didn’t even look at the number or nature of actual harm — it just asked the carriers to provide the number of contracts entered into. As Starks points out, one such contract can and did sometimes represent thousands of individual privacy invasions.
We know there are many—perhaps millions—of additional victims, each with their own harms. Unfortunately, based on the investigation the FCC conducted, we don’t even know how many there were, and the penalties we propose today do not reflect that impact.
And why not go after the individual companies? Securus, Starks says, “behaved outrageously.” But they’re not being fined at all. Even if the FCC lacked the authority to do so, it could have handed off the case to Justice or local authorities that could determine whether these companies violated other laws.
As Rosenworcel notes in her own statement, the fines are also extraordinarily generous even beyond this minimal method of calculating harm:
The agency proposes a $40,000 fine for the violation of our rules—but only on the first day. For every day after that, it reduces to $2,500 per violation. The FCC heavily discounts the fines the carriers potentially owe under the law and disregards the scope of the problem. On top of that, the agency gives each carrier a thirty-day pass from this calculation. This thirty day “get-out-of-jail-free” card is plucked from thin air.
Given that this investigation took place over such a long period, it’s strange that it did not seek to hear from the public or subpoena further details from the companies facilitating the violations. Meanwhile the carriers sought to declare a huge proportion of their responses to the FCC’s questions confidential, including publicly available information, and the agency didn’t question these assertions until Starks and Rosenworcel intervened.
$200M sounds like a lot, but divided among several billion-dollar communications organizations it’s peanuts, especially when you consider that these location-selling agreements may have netted far more than that in the years they were active. Only the carriers know exactly how many times their subscribers’ privacy was violated, and how much money they made from that abuse. And because the investigation has ended without the authority over these matters asking about it, we likely never will know.
The proposed fines, called a Notice of Apparent Liability, are only a tentative finding, and the carriers have 30 days to respond or ask for an extension — the latter of which is the more likely. Once they respond (perhaps challenging the amount or something else) the FCC can take as long as it wants to come up with a final fine amount. And once that is issued, there is no requirement that the fine actually be collected — and the FCC has in fact declined to collect before once the heat died down, though not with a penalty of this scale.
“While I am glad the FCC is finally proposing fines for this egregious behavior, it represents little more than the cost of doing business for these carriers,” Congressman Frank Pallone (D-NJ) said in a statement. “Further, the Commission is still a long way from collecting these fines and holding the companies fully accountable.”
The only thing that led to this case being investigated at all was public attention, and apparently public attention is necessary to ensure the federal government follows through on its duties.
(This article has been substantially updated with new information, plus comments from Commissioner Starks and Rep. Pallone.)
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Carriers ‘violated federal law’ by selling your location data, FCC tells Congress
More than a year and a half after wireless carriers were caught red-handed selling the real-time location data of their customers to anyone willing to pay for it, the FCC has determined that they committed a crime. An official documentation of exactly how these companies violated the law is forthcoming.
FCC Chairman Ajit Pai shared his finding in a letter to Congressman Frank Pallone (D-NJ), who chairs the Energy and Commerce Committee that oversees the agency, and others in the House. Rep. Pallone and his colleagues have been active on this and prodded the FCC for updates throughout last year, eventually prompting today’s letter.
“I wish to inform you that the FCC’s Enforcement Bureau has completed its extensive investigation and that it has concluded that one or more wireless carriers apparently violated federal law,” Pai wrote.
Extensive it must have been, since we first heard of this egregious breach of privacy in May of 2018, when multiple reports showed that every major carrier (including TechCrunch’s parent company Verizon) was selling precise location data wholesale to resellers who then either resold it or gave it away. It took nearly a year for the carriers to follow through on their promises to stop the practice. And now, 18 months later, we get the first real indication that regulators took notice.
“It’s a shame that it took so long for the FCC to reach a conclusion that was so obvious,” said Commissioner Jessica Rosenworcel in a statement issued alongside the chairman’s letter. She has repeatedly brought up the issue in the interim, seemingly baffled that such a large-scale and obvious violation was going almost completely unacknowledged by the agency.
Commissioner Brendan Starks echoed her sentiment in his own statement: “These pay-to-track schemes violated consumers’ privacy rights and endangered their safety. I’m glad we may finally act on these egregious allegations. My question is: what took so long?”
Chairman Pai’s letter explains that “in the coming days” he will be proposing a “Notice of Apparent Liability for Forfeiture,” for several of them. This complicated-sounding document is basically the official declaration, with evidence and legal standing, that someone has violated FCC rules and may be subject to a “forfeiture,” essentially a fine.
Right now that is all the information anyone has, including the other commissioners, but the arrival of the notice will no doubt make things much clearer — and may help show exactly how seriously the agency took this problem and when it began to take action.
Representative Pallone issued the following statement after receiving the letter:
Following our longstanding calls to take action, the FCC finally informed the Committee today that one or more wireless carriers apparently violated federal privacy protections by turning a blind eye to the widespread disclosure of consumers’ real-time location data. This is certainly a step in the right direction, but I’ll be watching to make sure the FCC doesn’t just let these lawbreakers off the hook with a slap on the wrist.
Disclosure: TechCrunch is owned by Verizon Media, a subsidiary of Verizon Wireless, but this has no effect on our coverage.
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Robocall-crushing TRACED act passes Senate and heads to Oval Office
Somehow during all the partisan furor of the last few days, the Senate found a moment to vote some bipartisan legislation into law — presuming, of course, it survives the president’s desk. The TRACED act pushes carriers to kill robocalls before they ring, and gives the FCC some extra juice to pursue the wicked ones perpetrating them.
“We’re delighted the Senate acted quickly to pass this legislation to shutdown illegal robocalls,” wrote the bill’s co-sponsors in the House Energy and Commerce Committee, in a statement. “We’re working hard to help the American people get real relief from these relentless and illegal calls. We look forward to the President signing this overwhelmingly bipartisan legislation into law very soon.”
Unlike many things called bipartisan, this one really is. Two different versions of the bill originated in the House and Senate and were passed individually with overwhelming majorities. The pertinent committees put their heads together and created a unified version of the bill they could both live with. Amazingly, that was just last month, and now the bill is off to the White House for the Executive signature.
You can read a summary of what the bill does here, but I’ll summarize further:
- Extends FCC’s statute of limitations on robocall offenses and increases potential fines
- Requires an FCC rulemaking helping protect consumers from spam calls and texts (this is already underway)
- Requires annual FCC report on robocall enforcement and allows for it to formally recommend legislation
- Requires adoption on a reasonable timeline of the STIR/SHAKEN framework for preventing call spoofing
- Prevents carriers from charging for the above service, and shields them from liability for reasonable mistakes
- Requires the Attorney General to convene an interagency task force to look at prosecution of offenders
- Opens the door to Justice Department prosecution of offenders
- Establishes a handful of specific cutouts and studies to make sure the rules work and interested parties are giving feedback
Overall it seems like a good bill and quite focused on this specific issue — no weird pork attached. Here’s hoping the TRACED act is signed into law quickly.
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FCC bans spending on Huawei, ZTE and other ‘national security threats’
The FCC has finally put the seal of approval on its plan to cut funding going to equipment from companies it deems a “national security threat,” currently an exclusive club of two: Huawei and ZTE.
No money from the FCC’s $8.5 billion Universal Service Fund, used to subsidize purchases to support the rollout of communications infrastructure, will be spent on equipment from these companies.
“We take these actions based on evidence in the record as well as longstanding concerns from the executive and legislative branches,” said FCC Chairman Ajit Pai in a statement. “Both companies have close ties to China’s Communist government and military apparatus. Both companies are subject to Chinese laws broadly obligating them to cooperate with any request from the country’s intelligence services and to keep those requests secret. Both companies have engaged in conduct like intellectual property theft, bribery, and corruption.”
The Chinese companies have faced federal scrutiny for years, and vague suspicions of selling compromised hardware that the government there could take advantage of, but it was only at the beginning of 2019 that things began to heat up with the controversial arrest of Huawei CFO Meng Wanzhou. The companies, it hardly needs mentioning, have vehemently denied all allegations.
Increasingly complicated relations between China and the U.S. generally compounded the difficulty of ZTE and Huawei operating in the States, as well as selling to or purchasing from American companies.
The FCC’s new rule was actually proposed well before things escalated, a fact that Commissioner Jessica Rosenworcel, though she supported the measure, emphasized.
“This is not hard,” she wrote in a statement accompanying the new rule. “It should not have taken us eighteen months to reach the conclusion that federal funds should not be used to purchase equipment that undermines national security.”
Working out the details may have been difficult, however, given the generally chaotic state of the federal government right now. For instance, one month this summer it was going to be illegal for U.S. firms to sell their products to Huawei — and then it wasn’t. Just yesterday several senators wrote to protest the Department of Commerce issuing licenses to firms doing business with Huawei.
Another proposal discussed today but not yet adopted would require companies that receive USF funds to remove equipment from those companies that they may have already installed.
Admittedly it may be a financial burden for smaller carriers to comply with these rules. There’s a plan for that, though, as Chairman Pai explained: “To mitigate the financial impact of this requirement, particularly on small, rural carriers, we propose to establish a reimbursement program to help offset the cost of transitioning to more trusted vendors.”
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FCC approves T-Mobile/Sprint merger despite serious concerns
The FCC has given its stamp of approval to T-Mobile and Sprint’s proposed merger, saying the deal will “enhance competition” and hasten 5G deployment. Those opposed say the merger defies common sense, creating a triumvirate of mobile giants that will “divide up the market, increase prices, and compete only for the most lucrative customers.”
The two mobile companies have been attempting to merge for years, ostensibly in order to compete with the considerably larger AT&T and Verizon. (Disclosure: TechCrunch is owned by Verizon Media, but this does not affect our coverage in the slightest.)
Previous attempts at deals were blocked more or less on the grounds that while a consolidated market might make the new T-Mobile/Sprint entity more competitive, it would be a net negative for consumers, who would have less choice than ever. The announcement of a $60 million FTC settlement over anti-consumer business practices by AT&T when they had the leverage to carry them out is a timely reminder of the general temperament of mobile carriers.
This latest attempt by the two companies (and backers like SoftBank, which stands to make a bundle on the deal) has met with more success, and the Department of Justice approved it in July. The DoJ’s proposed remedies for competition problems created by the merger apparently gave the FCC “further confidence” in its approval, which Chairman Ajit Pai signaled earlier this year — interestingly, before those remedies were proposed.
Among other things, Sprint must sell its Boost Mobile brand, and T-Mobile must sell its interest in Dish Network. The hope is that Dish, Boost and a few other players will somehow band together to form a new insurgent wireless network that will rise to compete with its former masters.
Sound a bit far-fetched? FCC Commissioner Rosenworcel thinks so as well.
Commissioner Rosenworcel at her confirmation hearing
“Instead of promoting vigorous competition among providers, today’s order justifies increased concentration by jerry-rigging a new provider dependent on the government dictating who sells what to whom and when,” she said in a statement.”
Commissioner Starks indicated his dissent on other grounds as well, specifically recent charges that Sprint has been irresponsibly deploying funds from the Commission’s Lifeline program for low-income mobile subscribers.
“Sprint may be responsible for the most egregious violations of our Lifeline rules in FCC history,” Starks wrote in a statement. “Our review should have been held in abeyance following the Chairman’s recent announcement of an investigation into Sprint’s alleged misappropriation of Lifeline support for 885,000 ineligible accounts. If substantiated, this would represent the misuse of nearly 10 percent of the funds for the entire program.”
More than anything else, though, critics remain skeptical of the basic idea that consolidation will produce increased competition. In fact, the Justice Department even thinks that may happen, which is why it is requiring the carriers to hastily assemble a new competitor out of whatever parts are left laying around, including some still being used by T-Mobile and others.
“The proposed transaction is exactly the type of merger that the Justice Department and the Commission have discouraged and rejected in the past: one that would harm competition and result in higher prices and poorer service, particularly for the most vulnerable consumers,” wrote Starks.
Others are concerned that the deal seemed to be a done deal even before Justice handed down its recommendations to improve competition following the merger.
“The FCC majority prejudged the merits of this merger two months before the Justice Department found the combination of T-Mobile and Sprint to be anticompetitive and required the creation of a new fourth competitor to pass legal muster. Despite this radical change in the merger, Chairman Pai has refused to put the new arrangement out for public comment,” noted Gigi Sohn, who was counselor to former FCC Chairman Tom Wheeler.
“Three of my colleagues agreed to this transaction months ago without having any legal, engineering, or economic analysis from the agency before us,” wrote Rosenworcel. “The procedural irregularities that have plagued the FCC’s review of this transaction make it difficult to ensure this agency’s findings are credible—especially when in so many key respects they are at odds with the findings of the Department of Justice.”
Proponents of the deal lean heavily on promises being made that “New T-Mobile,” as it is referred to in the decision, will use its new position to quickly and efficiently deploy 5G to many markets it might not otherwise have reached.
“This transaction will provide New T-Mobile with the scale and spectrum resources necessary to deploy a robust 5G network across the United States,” said Chairman Pai in his statement regarding the decision. “New T-Mobile will make the mobile broadband market more competitive in large swaths of rural America where neither Sprint nor T-Mobile is currently a strong competitor to AT&T and Verizon.”
Pai says the idea that reducing the number of major carriers from four to three will be harmful to competition is a “simplistic, backward-looking claim.” The truth, he says, is that in many places this merger will increase the number of competitors from two (Verizon and AT&T) to three as T-Mobile enters the market. That’s fair speculation to be sure, but as Commissioner Starks points out, that idea too is simplistic. The truth is that reducing the number of major carriers will likely have serious and immediate negative effects as well as well as Pai’s imagined long-term benefits.
“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,” Starks writes.
While Justice and FCC approval were the largest obstacles to the proposed merger, much still has to occur before Sprint customers find their phones switching over to the T-Mobile network. More than a dozen states have opposed the merger and filed lawsuits, though those might be mooted under the new proposed scheme. Still, state-level challenges are no joke and may further delay the merger, especially if they are elevated to the federal level.
This story is developing; check back for updates.
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Ajit Pai formally recommends T-Mobile/Sprint merger approval
Ajit Pai has long signaled that he would approve a T-Mobile/Sprint merger, but today the FCC chairman made it official. In spite of widespread opposition suggesting that the combining of the country’s third and fourth largest carriers would reduce competition in the marketplace, Pai takes the stance that such a move would actual promote competition.
“After one of the most exhaustive merger reviews in Commission history, the evidence conclusively demonstrates that this transaction will bring fast 5G wireless service to many more Americans and help close the digital divide in rural areas,” Pai said in a statement. “Moreover, with the conditions included in this draft Order, the merger will promote robust competition in mobile broadband, put critical mid-band spectrum to use, and bring new competition to the fixed broadband market. I thank our transaction team for the thorough and careful analysis reflected in this draft Order and hope that my colleagues will vote to approve it.”
Today, I circulated an order that would approve, subject to conditions, the proposed merger of T-Mobile and Sprint . The deal would advance fast #5G across the country, help close #digitaldivide, and put critical mid-band spectrum to use. My full statement: https://t.co/fBKvLnPgmm pic.twitter.com/21r3Us9cUG
— Ajit Pai (@AjitPaiFCC) August 14, 2019
Pai’s statement echoes that of many conservatives on the topic. While T-Mobile and Sprint are in third and fourth place, respectively, AT&T and Verizon are significantly ahead in terms of subscriber bases. Pai and other have suggested that combining the two under the T-Mobile umbrella would help the carriers get a leg up when it comes to competing on a 5G roll out.
“Consumers will directly benefit from improvements in network quality and coverage, which in turn will foster innovation in a wide variety of sectors and services (itself creating significant public interest benefits),” Pai’s team writes. “Moreover, the transaction will help to close the digital divide by bringing robust 5G deep into rural areas, with enforceable conditions in the draft Order requiring coverage of at least 99% of Americans within six years.”
Last month, the proposed merger was given the go-ahead by the U.S. Department of Justice on the condition that Sprint sell its prepaid assets (including Boost) to Dish network. A growing number of state attorneys general, meanwhile, have opposed the merger. Oregon joined the lawsuit yesterday, bringing the total up to 15 states and the District of Columbia.
“If left unchallenged, the current plan will result in reduced access to affordable wireless service in Oregon — and higher prices,” Oregon AG Ellen Rosenblum said. “Neither is acceptable.”
Pai noted earlier this year that he planned to approve the $26.5 billion deal, which would knock the country’s premium carriers down to three. No word yet on when the Commission will formally vote on the deal.
FCC Commissioner Jessica Rosenworcel had a different take on things, noting, “The FCC’s draft order approving the largest wireless merger in history just landed in my inbox.
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