Ex-FCC Commissioner Advises T-Mobile, Sprint On $26 Billion Merger (cnet.com)

An anonymous reader quotes a report from CNET: Former FCC Commissioner Mignon Clyburn is working to help T-Mobile and Sprint get their $26 billion merger approved by regulators. Clyburn, a Democrat, confirmed she's working as a paid consultant to the carriers to advise them on their impending merger. The news of her involvement was first reported by Politico on Monday. The companies, whose merger was announced in April last year, need approval from the Federal Communications Commission and the US Department of Justice. "Affordable broadband access is a critical priority particularly for those Americans who are underserved or currently have no viable options at all," she said in an interview with CNET. "I am advising T-Mobile and Sprint as they seek to accelerate the creation of an inclusive nationwide 5G network on how best to build a bridge across the digital divide that currently exists in our country."

Clyburn's involvement in advising the merger is interesting because she was part of the majority on the FCC in 2011 that rejected the merger between AT&T and T-Mobile, concluding that a reduction in the number of national carriers would harm consumers. When the idea of a merger between T-Mobile and Sprint was first floated in 2014, the Democratic-controlled FCC also signaled it wouldn't approve the deal for the same reason. [...] Executives for the companies say they will not raise rates on consumers. In a letter to the FCC on Monday, T-Mobile CEO John Legere made a personal pledge to regulators that the "New T-Mobile" would not raise prices on its service following the merger. Doing so, he said, would erode the relationship with T-Mobile customers.

Comments

What? It makes no sense.

[Anonymous Coward]

Both carriers are on completely different networks, so there is little synergy. ATT would screw up T-Mobile, but Sprint + T-Mobile would be worse. GSM and CDMA just don't splice.

Dumbest PR in a week

[TimothyHollins]

"I am advising T-Mobile and Sprint as they seek to accelerate the creation of an inclusive nationwide 5G network on how best to build a bridge across the digital divide that currently exists in our country."

It's good that they are building inclusive 5G networks as opposed to the old racist 4G networks that had those header bits for black/hispanic recipients. I wonder if they will also be accepting of non-binary traffic?

The jig is up boys.

[Anonymous Coward]

The feds are coming to take you down. Better get too big to fail before it's too late!

Re:What? It makes no sense.

[AHuxley]

5G will bring all that together.
5G will bring services to more parts of the USA.
No more paper insulated wireline.
Neighborhoods not yet gentrified will get their new 5G too.
Education, computer games, movies, tv series, social media, intelligent assistants.
5G and a 4K TV with lots of new ads.
In every home with an intelligent assistant ready to respond to any new voice, sound, accent.
The networks of the past will be replaced with the new 5G services.

Word vomit

[Anonymous Coward]

This is a plethora of marketing doublespeak. Here's one gem I've seen before:

In a letter to the FCC on Monday, T-Mobile CEO John Legere made a personal pledge to regulators that the "New T-Mobile" would not raise prices on its service following the merger

They won't raise prices following the merger. No. They'll wait 3 whole minutes and then raise prices in a completely unrelated way.

This entire pledge is devoid of content. How about putting some measurable numbers on that? How about "not raise prices on its services in the 12 months following the merger". And if he doesn't dare to (he won't), ask him why he doesn't.

Re:Word vomit

[Anonymous Coward]

I have a better idea.

Get a large swath of customers together, say 60% of the customer base, and have them all co-ordinate to not pay their T-mobile and sprint bills.

We were promised savings, no? I think free is savings.

And you watch the chaos as the companies finanices discintegrate and a thousand mini carriers buy up the equipment and take their place.

Re: Word vomit

[Anonymous Coward]

Nice idea but it wonâ(TM)t work. You will have to pony up regardless

Re:Word vomit

[bobbied]

Will prices go up? As sure as the sun shines during the day....

Don't forget though that building out a 5G network to replace Sprint and T-Mobile's existing is what this merger thing is really about. Both companies own existing spectrum space, tower space and a subscriber base that will make the transition to 5G over time. Having a bigger network is an advantage when dealing with equipment vendors, having a larger subscriber base allows these costs to be passed on at a lower cost per subscriber, and having spectrum space that overlaps in may places makes the logistics easier.

But you are right, it's going to cost subscribers more and cost some their jobs if the merger happens... But the question really should be if this price increase will be more that it would have been had the merger not happened? On that question, the answer is less clear.

Re: Word vomit

[Anonymous Coward]

The question is, how will they pay for this $26 billion merger? Not only do they have to payback that money but they more than likely also have to pay back an additional 10-15% to their investors. AFAIK, their only sources of revenue are their customers.

Re:Word vomit

[dgatwood]

They won't raise prices following the merger. No. They'll wait 3 whole minutes and then raise prices in a completely unrelated way.

This kind of misses the point. The reason that reducing the number of carriers hurts consumers is that it reduces consumer choice. Even if the prices don't change as a result (and they might not), the fact remains that different carriers have different plans with different options. Some people might prefer unlimited data. Others might prefer a cheaper, metered plan. Some might be okay with reduced quality from Netflix, and others might not. And so on.

As consumers, we have these choices because we have multiple carriers competing. The fewer carriers, the fewer options, and the more likely consumers are to get screwed, even in the absence of companies jacking up the price.

Now if they want to agree to provide all plans from both of the two services going forwards, and to subject themselves to a public utilities commission with the right to veto plan changes, that's a different matter, but short of that, fewer choices is bad for consumers, period. The size of the resulting network doesn't change that, and neither does a promise not to raise rates.

Re:Word vomit

[phalse phace]

This is a plethora of marketing doublespeak. Here's one gem I've seen before:

In a letter to the FCC on Monday, T-Mobile CEO John Legere made a personal pledge to regulators that the "New T-Mobile" would not raise prices on its service following the merger

They won't raise prices following the merger. No. They'll wait 3 whole minutes and then raise prices in a completely unrelated way.

This entire pledge is devoid of content. How about putting some measurable numbers on that? How about "not raise prices on its services in the 12 months following the merger".

How does 3 years sound?

T-Mobile promises not to raise prices for 3 years if Sprint merger is approved

T-Mobile CEO John Legere typically proposes deals to wireless consumers. Now he is offering one to the Federal Communications Commission.

If the FCC approves the telecom company's $26 billion merger with competitor Sprint, T-Mobile will put price increases on hold for three years, Legere said in note sent this week to FCC Chairman Ajit Pai.

Well DUH!

[p51d007]

"Clyburn's involvement in advising the merger is interesting because she was part of the majority on the FCC in 2011 that rejected the merger between AT&T and T-Mobile, concluding that a reduction in the number of national carriers would harm consumers." Well, she wasn't being paid a buttload of MONEY then!

Re: Well DUH!

[Anonymous Coward]

Everyone had their price.

Well back it up then..

[Anonymous Coward]

"Executives for the companies say they will not raise rates on consumers. In a letter to the FCC on Monday, T-Mobile CEO John Legere made a personal pledge to regulators that the "New T-Mobile" would not raise prices on its service following the merger. Doing so, he said, would erode the relationship with T-Mobile customers."

Will they put it in legal writing, that if they do they would lose their bonuses, from that point on for the entire time they are in that position and no exit bonuses.

Do that then they can be believed, until that point its just idle words.

(.)-(.)

Wow!

[kenh]

A former regulator that sold-out once they left office and entered the private sector - now that IS news!

Seriously?

Re:Wow!

[Anonymous Coward]

So what? I mean, what do you expect her to do for the rest of her carrier? Dig ditches? This is an area she knows, she should apply her knowledge.

Re:Wow!

[MightyMartian]

I think there's a strong argument for basically pensioning senior bureaucrats once they leave their post. Basically the deal should be "You work for us in a senior position for over a year, you get a lifetime pension with an annual amount equal to your salary (or heck, triple your annual salary), but you can never ever ever work in any capacity in any industry related to what you were responsible for. If you do, not only will you lose your pension, but you will be fined some obscene amount of money equal to that of the GDP of some equatorial African nation and spend years in a prison cell.

In other words, while it will cost the taxpayer lots of money, the integrity of the system is maintained. Someone like an FCC Commissioner, even if they've been out of the job for years, still has an enormous amount of internal information that would be highly valuable to industry players, and efforts should be made to assure that none of those companies can ever gain any advantage from it.

Re:Wow!

[Nidi62]

So what? I mean, what do you expect her to do for the rest of her carrier? Dig ditches? This is an area she knows, she should apply her knowledge.

So teach, speak, become a TV talking head, use connections to help towns set up municipal ISPs, etc. You know, jobs/activities that don't involve you taking money from businesses that you used to regulate.

Re:Wow!

[CrimsonAvenger]

"You work for us in a senior position for over a year, you get a lifetime pension with an annual amount equal to your salary (or heck, triple your annual salary), but you can never ever ever work in any capacity in any industry related to what you were responsible for. If you do, not only will you lose your pension, but you will be fined some obscene amount of money equal to that of the GDP of some equatorial African nation and spend years in a prison cell.

"But I have never worked since I quit the government. Alas, my daughter has worked in the industry. Are you seriously trying to suggest that my work for the government requires that all my direct descendants work for the government or nobody?"

Re:Wow!

[Can'tNot]

Corruption of FCC commissioners is a known problem, but this isn't a good example. Selling out the public after leaving office isn't nearly as much of a problem as selling out the public while still in office. You could point to Ajit Pai, and that would probably be accurate, but there are even better examples than him.

Re:Wow!

[LazarusQLong]

in the DoD there is a waiting period you have to go through before you are allowed to go to work for any company you used to have oversight of... is this not the case for the FCC?

This is Fake News

[Anonymous Coward]

Because we all know only that E-vile Ajit Pai would do such a thing!

"Clybourn, a Democrat...."

[Anonymous Coward]

Not exactly what you're supposed to be getting from the party that claims to represent "the people" better than the other party does.

T-Mobile is EXTREMELY badly managed.

[Anonymous Coward]

In my experience, T-Mobile is EXTREMELY badly managed.

T-mobile is already cheaper

[Anonymous Coward]

That's brilliant. Then you give the entire market to AT&T and Verzion, which are much, much more crooked. T-Mobile is German level slimy. AT&T and Verizon completely crooked.

Re:What? It makes no sense.

[pushing-robot]

Google Fi already uses both Sprint and T-Mobile’s networks. Many phone radios can communicate using either GSM or CDMA, and at this point LTE has largely replaced both of them. By the time the merger goes through and the new company is ready to start consolidating towers, 2G/3G will probably be a distant memory.

Very little downside to merging?

[King_TJ]

I don't understand why people would be resistant to this merger, really? Sprint is a dying company that's been up for grabs for a while now. Their cellular service has lousy coverage and they've resorted to heavily discounting iPhones to get people to take their garbage network.

In that light, we're not losing much of anything by having Sprint go away. T-Mobile has been growing, but is still the "underdog" compared to Verizon or AT&T. If they can make use of the Sprint network as something to supplement their own, and get the boost to the subscriber-base by acquiring Sprint customers -- it seems like it puts them on more even footing with the "big 2".

I don't see much chance of somebody coming along and wanting to buy Sprint just to continue operating it as a separate entity. The opportunity was there to do that for the last 7 years or so, and nobody seriously expressed interest.

Re:Very little downside to merging?

[dgatwood]

I don't understand why people would be resistant to this merger, really? Sprint is a dying company that's been up for grabs for a while now. Their cellular service has lousy coverage and they've resorted to heavily discounting iPhones to get people to take their garbage network.

That's not my experience in the Bay Area. I've found them to be more reliable in the places I care about than AT&T was, and a close second to Verizon. Perhaps you just live in a place where it isn't financially viable for more than two carriers to compete. But that's not a good reason to ruin it for the folks who live in places where Sprint is a viable competitor.

In that light, we're not losing much of anything by having Sprint go away. T-Mobile has been growing, but is still the "underdog" compared to Verizon or AT&T. If they can make use of the Sprint network as something to supplement their own, and get the boost to the subscriber-base by acquiring Sprint customers -- it seems like it puts them on more even footing with the "big 2".

They can do that anyway. There's nothing stopping Sprint or T-Mobile from leasing access to each other's towers to each other, and there's also nothing stopping them from spinning off some of their towers into a holding company that is owned jointly by both companies. In fact, I would argue that this is the only sensible thing to do for towers that serve outlying areas (and maybe even small cities), assuming any of those towers are even owned by Sprint or T-Mobile rather than leased from the North Podunk Cellular Company or whatever.

Really, the only impact of a merger, other than reducing administrative overhead, is reducing consumer choice by taking away half of the rate plan options.

I don't see much chance of somebody coming along and wanting to buy Sprint just to continue operating it as a separate entity. The opportunity was there to do that for the last 7 years or so, and nobody seriously expressed interest.

Why does someone need to buy them? They're a profitable business. I see no reason that the status quo can't be maintained indefinitely.

Personal Pledge

[gavron]

TMO boss made a "personal pledge" not to raise prices? I see that and raise him to add this language to their T&Cs:

"T-Mobile and Sprint Wireless will not raise your rate for your current services nor for any services you add so long as your contract stays in force. We will not update our T&Cs to allow us to raise your rate during this time. If you renew your service we will keep the same rate active."

NOW THAT'S A PLEDGE.

DO THAT, JOHN "ARE YOU TELLING THE TRUTH OR ARE YOU LYING" LEGERE!

Ehud
P.S. I'm not a lawyer, but it's good language, right?

Re:What? It makes no sense.

[Anonymous Coward]

One 5G to bring them all, and in the darkness bind them...

"We won't raise rates."

[neo-mkrey]

right up there with "I won't cum inside you."

Re:"We won't raise rates."

[HornWumpus]

I didn't do it.

The check is in your mouth.

I would never ever cum in your mailbox.

Re:Hang Ajit Pai Because BizX Told Us...

[LazarusQLong]

How about hang him because he has consistently sided with whatever Verizon/AT&T/Cox/Comcast have told him to do? Aren't those good enough reasons to be angry at his stewardship of the FCC?

Re:What? It makes no sense.

[AHuxley]

The collect it all network.
A live mic in every 5G home.