After a prolonged negotiation, DOJ reached agreement with T-Mobile/Sprint and Dish Network (see 1907260021). Justice got five attorneys general onboard from states that hadn't tried to block the multibillion dollar transaction. Industry officials said getting some support from states was important to the department and delayed an announcement by a day, though opposing states are expected to continue their lawsuit in federal court in New York. The California Public Utilities Commission also hasn't approved the deal. DOJ’s consent decree with the companies did little to mollify most critics.
T-Mobile/Sprint delayed an expected announcement (see 1907240062) of a deal with Dish Network Thursday. T-Mobile issued a news release less than an hour before a Q2 call with its CEO John Legere and others, saying the call was delayed. T-Mobile was ready to go and the holdup likely came from DOJ, which appears to be looking for state support, industry officials said. The deal with Dish was intended to address Justice interest in creating a fourth national wireless carrier to replace Sprint. Dish closed at $39.17, down 5.75 percent.
Qualcomm Technologies and Ericsson said they achieved the world’s first low-band 5G data session using a commercial modem. The test took place in in T-Mobile’s lab in Bellevue, Washington, using the 600 MHz band, the spectrum T-Mobile bought in the TV incentive auction and plans to use to deploy 5G nationwide. “This is a key step toward achieving our vision of 5G for All,” said Neville Ray, T-Mobile chief technology officer, Thursday. “If regulators approve our merger with Sprint, we’ll have the crucial mid-band spectrum and resources needed to supercharge our network and deliver broad AND deep, transformational 5G across the U.S.”
New America's Open Technology Institute and Public Knowledge urged the FCC to make more use of use “use-it-or- share-it” rules to encourage carriers to make spectrum available on the secondary market. Industry groups instead backed rule liberalization to encourage more secondary market deals. Comments in docket 19-38 posted through Tuesday. In March, commissioners approved 5-0 an NPRM (see 1903150067) on how changes to spectrum partitioning, disaggregation and leasing rules “might further the agency’s goals of closing the digital divide and increasing spectrum access for small carriers and in rural areas.”
Industry commenters continued to push for tweaks to proposed competitive bidding rules for the upper 37, 39 and 47 GHz auction, slated to start Dec. 10 (see 1904120058). In initial comments, the Rural Wireless Association and Wireless ISP Association pressed for a more significant change -- smaller license sizes than the partial economic area licenses already agreed to by the FCC (see 1905170014). Replies were posted through Friday in docket 19-59.
T-Mobile CEO John Legere still expects the FCC and DOJ to approve the company’s buy of Sprint by the end of June. The FCC’s unofficial 180-day shot clock expires June 4, he said Thursday. “We remain optimistic and confident,” Legere said on a Q1 call. The company reported it spent $93 million advocating for the deal in the quarter.
The FCC is under increasing pressure to open more mid-band spectrum as 5G deployments start. Most agree none will be available before next year and the auction of the licensed tier of the 3.5 GHz citizens broadband radio service band. The other two main bands in focus at the FCC, 2.5 GHz and the C band, are expected to be opened after the 3.5 GHz auction. Commissioners Jessica Rosenworcel and Geoffrey Starks are leading the effort.
With a federal decision on T-Mobile/Sprint likely close, the deal's fate is anything but certain. T-Mobile/Sprint also must pass state review, which some analysts see as a potential sticking point. Both stocks were down Wednesday after The Wall Street Journal reported Tuesday that DOJ staffers told the two companies the deal's unlikely to be approved as structured (see 1904160036). T-Mobile closed at $72.46, down 2.2 percent; Sprint at $5.64, down 6.16 percent. Analysts said the transaction's still alive, even if it’s in trouble.
Tower companies are reporting a general slowdown in carrier investment, Wells Fargo’s Jennifer Fritzsche told investors Thursday. Fritzsche cited discussion at a recent dinner she hosted for tower and wireless executives. AT&T is investing but not at the same level as the end of 2018, she said: T-Mobile is still building out its 600 MHz licenses, but there's “somewhat of a pause of lighting up new capacity sites until it sees how the [Sprint] merger plays out” (see 1904110026). Verizon is “taking a breath” on macro towers, she said. It seems "Q1 is not as robust as we hoped earlier the year in terms of carrier activity,” Fritzsche said. “All executives were positive as to the long term outlook on the business but our sense is muted expectations should be in place for the March quarter.”
Some changes are possible to the draft order on the 37 GHz band, teed up for a Friday vote by FCC members. The agency proposes rules for coordinating with DOD on future use of the upper 37 GHz band beyond current DOD sites located there. FCC and NTIA officials met to discuss the order Monday and a few tweaks are possible, government officials said.