T-Mobile Wants a Consolation Prize for Its Dead Merger

The cell-phone carrier is lobbying the FCC for access to more airwaves.

A man talks on a mobile phone at the T-Mobile stand at the CeBIT technology fair March 15, 2007 in Hanover, Germany. CeBIT, the world's largest tech fair, will run from March 15-21. (Photo by Sean Gallup/Getty Images)
National Journal
Brendan Sasso
Aug. 14, 2014, 11:22 a.m.

T-Mo­bile is hop­ing the Obama ad­min­is­tra­tion will show some sym­pathy after for­cing the com­pany to call off mer­ger talks with Sprint.

The cell-phone pro­vider is ask­ing the Fed­er­al Com­mu­nic­a­tions Com­mis­sion to come up with new rules that will give it ac­cess to more air­waves, which will mean bet­ter cel­lu­lar ser­vice for its cus­tom­ers. T-Mo­bile’s im­pli­cit ar­gu­ment is that it de­serves an ad­di­tion­al leg up over its com­pet­it­ors after the gov­ern­ment killed its hopes of be­ing bought by Sprint.

Sprint and T-Mo­bile nev­er ac­tu­ally ap­plied to merge, but they aban­doned their talks last week due to ob­vi­ous res­ist­ance from the FCC and Justice De­part­ment.

This week, T-Mo­bile filed a pe­ti­tion ask­ing the FCC to re­work its rules for an up­com­ing auc­tion of spec­trum””the air­waves that carry all wire­less sig­nals. Sprint filed a sim­il­ar pe­ti­tion on re­lated is­sues.

The FCC already en­acted rules to fa­vor T-Mo­bile and Sprint in the auc­tion, which is planned for next year. The rules cap the amount of spec­trum that the two largest car­ri­ers””Ve­r­i­zon and AT&T””can buy in each mar­ket around the coun­try. The FCC’s goal is to en­sure that the two in­dustry gi­ants don’t dom­in­ate the auc­tion, ac­cu­mu­lat­ing enough spec­trum to kill off com­pet­i­tion and raise prices. Without ad­equate spec­trum, a car­ri­er’s net­work would be­come con­ges­ted and slow, lead­ing cus­tom­ers to flee to com­pet­it­ors.

In a blog post Wed­nes­day, T-Mo­bile’s head of reg­u­lat­ory af­fairs, Kath­leen Ham, said cap­ping the largest car­ri­ers was “one of the most in­nov­at­ive and for­ward-think­ing” ac­tions the FCC has ever taken. But T-Mo­bile thinks the FCC should go farther.

“We want the FCC to do more of the right thing,” she ex­plained.

T-Mo­bile’s form­al fil­ing with the FCC strongly al­ludes to the re­cent de­mise of its deal with Sprint. A main ar­gu­ment that FCC Chair­man Tom Wheel­er and lead­ers at the Justice De­part­ment made against the mer­ger was that it was im­port­ant to keep four in­de­pend­ent car­ri­ers to pre­serve in­dustry com­pet­i­tion.

In its fil­ing, T-Mo­bile said the FCC’s rules for the spec­trum auc­tion are at “odds with its stated goal of pro­mot­ing com­pet­i­tion among four na­tion­wide com­pet­it­ors.”

The cur­rent frame­work “gives too much to the two dom­in­ant car­ri­ers at the ex­pense of com­pet­i­tion,” T-Mo­bile claimed. The com­pany wants the FCC to des­ig­nate at least half of the spec­trum in each mar­ket as off-lim­its to the largest car­ri­ers.

T-Mo­bile, the smal­lest of the four car­ri­ers, has struggled to com­pete with Ve­r­i­zon and AT&T. Sprint and T-Mo­bile saw a mer­ger as the best way to gain the scale they need to be on equal foot­ing with the in­dustry lead­ers.

The FCC de­clined to com­ment on the pe­ti­tion.

Wheel­er had said he would be will­ing to re­con­sider the rules for the auc­tion if there was an im­port­ant change in the mar­ket­place (i.e. if Sprint and T-Mo­bile ac­tu­ally merged). But there haven’t been any ma­jor changes in the three months since the FCC en­acted the rules, so it ap­pears that T-Mo­bile’s bid is a long shot.

Wal­ter Piecyk, an ana­lyst for for re­search firm BTIG, said T-Mo­bile’s fil­ing is “clearly con­nec­ted” to the re­cent de­mise of its Sprint deal. It would be un­usu­al for the FCC to re­verse its de­cision, but Piecyk in­sisted there’s still time for the agency to tweak the rules be­fore the auc­tion next year.

T-Mo­bile has a “good ar­gu­ment” for why the FCC should re­con­sider “giv­en that the FCC has set up some road­b­locks for T-Mo­bile to gain scale with a mer­ger with Sprint,” he said.

What We're Following See More »
‘PULLING A TRUMP’
GOP Budget Chiefs Won’t Invite Administration to Testify
1 days ago
THE DETAILS

The administration will release its 2017 budget blueprint tomorrow, but the House and Senate budget committees won’t be inviting anyone from the White House to come talk about it. “The chairmen of the House and Senate Budget committees released a joint statement saying it simply wasn’t worth their time” to hear from OMB Director Shaun Donovan. Accusing the members of pulling a “Donald Trump,” White House spokesman Josh Earnest said the move “raises some questions about how confident they are about the kinds of arguments that they could make.”

Source:
A DARK CLOUD OVER TRUMP?
Snowstorm Could Impact Primary Turnout
23 hours ago
THE LATEST

A snowstorm is supposed to hit New Hampshire today and “linger into Primary Tuesday.” GOP consultant Ron Kaufman said lower turnout should help candidates who have spent a lot of time in the state tending to retail politicking. Donald Trump “has acknowledged that he needs to step up his ground-game, and a heavy snowfall could depress his figures relative to more organized candidates.”

Source:
IN CASE OF EMERGENCY
A Shake-Up in the Offing in the Clinton Camp?
18 hours ago
THE DETAILS

Anticipating a primary loss in New Hampshire on Tuesday, Hillary and Bill Clinton “are considering staffing and strategy changes” to their campaign. Sources tell Politico that the Clintons are likely to layer over top officials with experienced talent, rather than fire their staff en masse.

Source:
THE LAST ROUND OF NEW HAMPSHIRE POLLS
Trump Is Still Ahead, but Who’s in Second?
5 hours ago
THE LATEST

We may not be talking about New Hampshire primary polls for another three-and-a-half years, so here goes:

  • American Research Group’s tracking poll has Donald Trump in the lead with 30% support, followed by Marco Rubio and John Kasich tying for second place at 16%. On the Democratic side, Bernie Sanders leads Hillary Clinton 53%-41%.
  • The 7 News/UMass Lowell tracking poll has Trump way out front with 34%, followed by Rubio and Ted Cruz with 13% apiece. Among the Democrats, Sanders is in front 56%-40%.
  • A Gravis poll puts Trump ahead with 28%, followed by Kasich with 17% and Rubio with 15%.
×