FCC Pauses T-Mobile/Sprint Review; DOJ Officials Called Skeptical of T-Mobile Price Freeze
The FCC paused the informal 180-day shot clock on its review of T-Mobile’s proposed buy of Sprint Thursday and asked for additional comment on new data submitted by the companies. On Feb. 21 and March 6, “the Applicants filed significant additional information regarding their network integration plans for 2019-2021, an extension of their previously filed merger simulation analysis to cover the years 2019-2021, and additional information regarding their claims related to fixed wireless broadband services,” said a public notice in docket 18-197. The FCC sought comment on just the new submissions, due March 28.
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“Absent further significant new record submissions by the Applicants or other outstanding issues, including documentation of claims of privilege, the informal 180-day clock will resume on April 4” at Day 122 of the review, the PN said. The companies announced the deal in late April and sought approval a few months later. T-Mobile didn't comment now.
T-Mobile, Sprint and Sprint parent SoftBank reported on a call with FCC Chief of Staff Matthew Berry on “merger simulation modeling and the conservative assumptions used in that modeling,” filed in docket 18-197. T-Mobile filed information on its proposed home internet service. The offering “will connect millions of rural and low-income households to high speed Internet access by delivering quality service at an aggressive price point, including to areas where no broadband service exists today,” T-Mobile said. The carrier projects 9.5 million customers in 2024. Details were redacted.
DOJ officials are “privately pooh-poohing” parts of T-Mobile/Sprint, the New York Post and Fox Business News, both affiliated with News Corp Chairman Rupert Murdoch, reported (see here and here). DOJ officials were particularly skeptical of T-Mobile’s commitment to freeze prices for three years, they said. But Fox also said the White House is comfortable with the deal.
New Street’s Blair Levin said the reports have the ring of truth. DOJ and the FCC want to see “evidence that market forces, post deal, will constrain the combined company from raising rates,” Levin told investors Thursday. “If the companies believe they have to offer a price regulation regime … it is a sign that they are having a problem with their core economic argument about the impact of the deal on market competition.” The companies "keep inventing ‘new’ reasons to buy the same old excuses for this mega-merger,” said Protect America’s Wireless, which opposes the deal.