January 7, 2014
In an interesting advocacy letter published yesterday, and reminiscent of parallel wireless competition issues in Canada (and also discussed in the letter), the American Antitrust Institute has urged the U.S. DoJ and FCC to oppose any potential Sprint/T-Mobile merger. Also somewhat reminiscent of Canada, the AAI argues, among other things, that the U.S. needs at least four major wireless players (and in the U.S. case, that T-Mobile has emerged as a maverick following the blocked AT&T/T-Mobile deal in 2011). I thought this was an interesting advocacy piece both in terms of its discussion of the U.S. wireless market and current parallels and discussion of similar issues in Canada: AAI Urges the DoJ and FCC to Prevent Emerging Wireless Competition From Being Smothered in the Cradle.
Excerpt:
“The American Antitrust Institute (AAI) today called on the Department of Justice (DOJ) and Federal Communications Commission (FCC) to be prepared to block any possible merger between Sprint and T-Mobile.
To the frustration of American wireless subscribers (read: the vast majority of the population), the national wireless market has only four major players (Verizon, AT&T, Sprint, and T-Mobile) and has long been dominated by the Big Two (Verizon and AT&T). The concentrated national market has meant, among other things, high prices and long-term contracts with large early termination fees.
To the delight of consumers, the market took a decisive turn for the better in 2013, after the DOJ and FCC blocked AT&T’s bid to acquire T-Mobile at the end of 2011. Since then, T-Mobile, under new leadership, has emerged as a maverick in the market. It has, among other things, ended two-year contracts, built out its 4G network to cover a majority of Americans, slashed or eliminated charges on voice and data use in foreign countries, and started offering biannual phone upgrades.
In a letter to Assistant Attorney General for the Antitrust Division Bill Baer and FCC Chairman Tom Wheeler, the AAI asks the agencies to ensure that the national wireless market continues to have four independent providers and preserve the pro-consumer rivalry that has broken out over the past year.”
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