T-Mobile Hires Ex-FCC Commissioner To Claim Its Competition-Killing Merger Will Be Really Great For...Farmers

from the synergies,-yo dept

As we've discussed, the looming Sprint T-Mobile merger is going to be decidedly ugly for American consumers. Global history has shown repeatedly that when you reduce the number of total competitors from four to three, you proportionally reduce any incentive to truly compete on price. Analysts have also predicted that anywhere between 10,000 and 30,000 retail, management, and administrative employees will lose their jobs as the bigger company inevitably eliminates redundant positions. Of course like any American merger, the two companies' CEOs have spent much of the last week trying to claim the exact opposite.

Still, it's going to be an uphill climb for Sprint and T-Mobile to sell regulators on the deal, even for an administration that seems to take pride in undermining consumers and small businesses. To try and sell it, Sprint and T-Mobile have been trying to make the claim that the only way to ensure we have the fifth-generation (5G) networks of tomorrow is if we sign off on their competition-eroding megamerger:

"It is critically important that America and American companies lead in the 5G era. Early U.S. leadership in 4G fueled a wave of American innovation and entrepreneurship that gave rise to today’s global mobile Internet leaders, creating billions in economic value and job growth. America’s early 4G leadership is credited with creating 1.5 million jobs and adding billions to the U.S. GDP. With 5G, the stakes are even higher – because 5G will be even more transformational."

This plays in handily to the Trump administrations protectionist efforts to ban Chinese companies from the American market in order to "win the 5G race." The problem is that 5G isn't some magic wand. While it will provide us with faster, lower latency and more resilient wireless networks, it's not going to magically cure the fact that American broadband is ranked somewhere around 62nd in speed, and consumers pay some of the highest rates for mobile data in the developed world thanks to a telco monopoly over the fiber lines that feed cellular towers.

Both T-Mobile and Sprint had been making it clear for months that they could deploy 5G easily and independently of each other. Suddenly we're being told that these next-gen networks are only made possible if we sign off on a deal history tells us will be arguably terrible for anybody other than AT&T, Verizon and SprinT-Mobile, who'll all have less motivation to engage in real price competition post merger.

To try and sell this "only merging can deliver next-gen networks" argument, T-Mobile this week hired former FCC Commissioner Robert McDowell to make the same point in an op/ed over at Fortune:

"The T-Mobile-Sprint merger will benefit our country and all Americans. From a farmer in Nebraska using 5G technology to better track crop conditions, to a small business owner in New Hampshire looking to sell products in the global marketplace, to a smart city with autonomous vehicles, all of us will depend on 5G. We can’t afford to lose the global race to develop this remarkable technology."

In the piece's fine print you'll find that McDowell is now a paid T-Mobile advisor, which is a nice shift from outlets that can't be bothered to highlight op/ed author financial ties to industry. Again though, there's nothing "magical" about 5G that helps create smart cities, next-gen agricultural tools, and the automated cars of tomorrow. Those technologies can still thrive on 4G networks, and again, while 5G is going to provide some notable evolutionary improvements, it's not some kind of mystical panacea, and its impacts on our overall economy are being absurdly over-hyped by companies eager to sell networking hardware.

There's numerous problems in the wireless sector that will persist throughout the "5G revolution," none of which get magically eliminated by reducing competition and killing tens of thousands of jobs. The merger doesn't magically fix AT&T and Verizon's backhaul monopoly. It doesn't address the fact that Americans pay more for wireless data that countless other developed nations. And it certainly doesn't solve the problem of regulatory capture, which is why American broadband (fixed or wireless) tends to be such a comical shitshow in the first place.

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Filed Under: 5g, competition, farmers, fcc, lobbying, mergers, robert mcdowell

Companies: sprint, t-mobile