Empty T-Mobile Promises Convince Texas To Back Off Merger Lawsuit

Wireless

from the sucker-born-every-minute dept

While the DOJ and FCC have rubber stamped T-Mobile’s controversial $26 billion merger with Sprint, the megadeal still faces stiff opposition from more than a dozen state AGs. What began as a coalition of ten states had been slowly expanding over the last few months to include states like Texas. Collectively, state AGs have made it very clear that every meaningful economic metric indicates the deal will erode competition, raise rates, and result in thousands of layoffs as redundant employees are inevitably eliminated.

In response, T-Mobile lobbyists have been working overtime trying to convince some states to back off their opposition in exchange for promises history suggests there’s little chance they’ll actually adhere to. Case in point: Texas AG Ken Paxton announced Monday morning he’d be quitting the lawsuit coalition after T-Mobile promised more jobs and better broadband coverage. But the promises themselves were kept vague, and there was, you’ll note, zero mention of what happens should T-Mobile not meet them:

“Attorney General Ken Paxton today announced that his office reached a settlement with T-Mobile resolving the state?s antitrust claims against the proposed merger of mobile wireless telecommunications service providers Sprint and T-Mobile. The agreement is designed to prevent the New T-Mobile from increasing prices for wireless services on Texans for five years after the merger is complete. The agreement also commits the New T-Mobile to build out a 5G network throughout Texas, including rural areas of our state, during the next six years.”

But I’ve written pretty extensively how pre-merger telecom promises are absolutely meaningless. 99.5% of the time, when it’s time to hold a big company accountable on the state or federal level for pre-merger promises five years from now, all backbone suddenly and mysteriously evaporates, and whoever is in charge at the time will suddenly decide that actually enforcing any such promises isn’t worth the time and hassle of battling with telecom lobbyists and lawyers. It’s a bipartisan tradition that goes back the better part of forty years, and it’s a major reason why US broadband is so patchy and mediocre.

Economists are painfully clear about the fact that the T-Mobile merger will eliminate thousands of jobs, reduce competition, and drive up US wireless prices (already some of the highest in the developed world). It’s another “debate” where there is no actual debate, yet you wouldn’t generally know that from reading fluffy tech press coverage of the deal, which oddly omits historical context (like the fact two variants of this deal have already been blocked for risk of clear anti-competitive harm). The myopia is thanks in no small part to the litany of folks paid by telecom to pretend mergers are uniformly wonderful.

The job losses from this kind of union are inevitable. And while T-Mobile is busy promising Texas that the merger will result in expanded broadband coverage, with their other hand they’re working with the CTIA to make it harder to actually determine where 5G will be available. Why do you think that might be, exactly? Still, there are thirteen states taking part in the lawsuit which, thanks to the unrealistic nature of these promises and legal precedent, has a good shot at succeeding.

Texas isn’t the only state to be wooed by the dulcet tones of T-Mobile lobbyist promises. Colorado and Mississippi also backed off the lawsuit after receiving promises of new call centers and rural broadband expansion which, if 40 years of telecom history holds, will be little more than a faint echo half a decade from now when it’s time to pay the bill. It’s the American way.

Filed Under: antitrust, competition, empty promises, fcc, ken paxton, merger, texas
Companies: sprint, t-mobile