Though the romance rumor mill is still claiming that Sprint and T-Mobile are hoping to announce their engagement in the weeks to come, and it’s highly unlikely that the pro-industry FCC will do anything to slow these crazy kids from merging, the wireless wedding could be spoiled by the anti-trust wet blankets at the Justice Department.
A combination of the third and fourth-largest wireless providers in the U.S. would result in three mega carriers, each controlling in excess of 120 million customers. The next-largest provider would be U.S. Cellular, which currently has fewer than 5 million wireless customers and only provides service in about half the states.
This concentration of the U.S. wireless market in so few hands was one of the reasons that Sprint and T-Mobile abandoned merger talks in 2014, fearing the Obama administration would try to block the deal, as it did successfully with the failed ATT/T-Mobile and Comcast/Time Warner Cable deals.
While the Justice Department is now under the direction of pro-business Attorney General Jeff Sessions, Bloomberg points out that the DOJ antitrust attorneys who would review this merger are hold overs from the previous administration and may not have changed their view of whether or not the wireless market is too consolidated.
However, even if these DOJ staffers do conclude that it would be best to continue having four wireless companies competing in the national market, the decision will ultimately be up to Makan Delrahim, the new head of the DOJ’s antitrust division who was recently appointed by President Trump. Thus far, even when questioned on the issue during his confirmation hearings, Delrahim has not given any indication on where he comes down on this issue.
Meanwhile, over at the FCC — which also has a say in reviewing telecom mergers — it’s a different story. True, FCC Chair — and guy who probably got elected 8th grade class president because he’s the only one who wanted it — Ajit Pai hasn’t explicitly stated that he’d be fine with this merger. But the FCC’s most recent wireless competition report now claims, contrary to all recent FCC reports on the same issue, that the U.S. wireless market offers consumers robust competition.
At a speech last night, Pai declared that his FCC wants to “eliminate, as much as we can, government regulation of the telecommunications marketplace so as to permit present players to provide new and innovative services to consumers and likewise permit new players to come in and compete.”
So it seems like this FCC is unlikely to overly scrutinize this merger if it is proposed.