Say weak neophyte is not fair trade for established carrier

Groups opposed to the T-Mobile/Sprint merger vowed to fight on Friday after the Justice Department reached a settlement it suggested would maintain four carriers and they suggested would trade an experience carrier with a weak and experience-less competitor with a checkered buildout history.

In a conference call with reporters, Phillip Berenbroick, senior policy counsel for Public Knowledge; Carri Bennet, general counsel, Rural Wireless Association; Debbie Goldman, telecommuications policy director for the Communications Workers of America (CWA); and George Slover, senior policy counsel, Consumers Union, urged state attorneys general (AG) to press their suit against the deal, regardless of the Justice settlement, as well as the likely approval of the FCC.

T-Mobile and Sprint have agreed not to close the deal until after the AG suit is either dropped or a court decision is issued. Some top AGs signaled they are still suing, and the trial does not even begin until October and may be delayed beyond that so the DOJ settlement can be factored in.

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So, if the suit continues, the deal won't close for months.

That could save the groups' legal fees, since they might otherwise file for a court stay of the FCC's likely approval of the deal to keep it from closing.

None of the groups was persuaded by DOJ's plan to preserve competition, which consists of requiring the New T-Mobile to spin off its pre-paid Boost Mobile operation and some unused spectrum assets, with Dish initially operating Boost Mobile via an MVNO with T-Mobile, and in the meantime building out its own facilities-based wireless network with that and spectrum it already owns.

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Berenbroick said that while DOJ recognized that there needed to be four strong facilities-based competitors, its solution was, rather than block the deal, place a risky bet, one that was unlikely to pay off, leaving consumers with less competition.

The companies have agreed to various conditions, but Berenbroick said if past is prologue, such conditions are ineffective, subject to gaming, or go unenforced.

Based on what they have seen of the settlement, he said, the deal should be blocked, and the FCC should put it out for new public comment. FCC officials have said that is not happening.

Goldman said the deal remains harmful to workers and will kill 30,000 jobs. She said the Dish "side deal" does nothing to remedy the fundamental antitrust problems because it substitutes an experienced fourth, facilities-based operator with a weak neophyte operator--Dish has never built or operated a wireless network--initially dependent on T-Mobile spectrum--to operate Boost Mobile--while it tries to build out its network toward a speculative competitive future. She said DOJ had created a new T-Mobile customer, not competitor.

She pointed out that MVNOs typically operate on low margins with few of their own stores, and that the conditions on the companies were complex and tough to enforce. Plus, she said, Dish has a checkered history of noncompliance.

Bennett, of the Rural Wireless Association, said DOJ had caved to political pressure and ignored evidence of harm to consumers. He said the merger will mean higher prices and reduced access for rural consumers and called the conditions on the deal "drastically insufficient" to repair the harms and "spells disaster."

Slover, from Consumer Reports, was also down on the Dish side deal, replacing an experienced carrier with an unproven newcomer building from scratch. He called it trading a bird in the hand for a pig in the poke, saying Justice "tried too hard to get to 'yes.'"