On January 28, the public comment period closed in the FCC's review proceeding for the T-Mobile/UScellular transaction. The weight of available evidence indicates that the proposed acquisition by T-Mobile of 30% of UScellular's spectrum and its subscribers most likely would bring public benefits by making high-speed 5G mobile services and residential fixed wireless services available to more Americans. Given UScellular's small market share, the transaction is unlikely to cause any significant harm to competition or consumers.
The FCC should decide on the proposed T-Mobile/UScellular deal well before the agency's 180-day shot clock for completing transaction reviews expires. The shot clock was intended to be the outside date by which agency reviews of transactions involving substantial concerns are to be finished – not the much shorter timeline in which most reviews, which do not raise substantial concerns, ought to be decided.
The backdrop to the proposed T-Mobile/UScellular transaction is today's "mobile telephony/broadband services" product market that is characterized by strong competition among nationwide mobile providers T-Mobile, AT&T, and Verizon, emergent nationwide provider EchoStar, and regional cable mobile virtual network operators (MVNOs) Xfinity Mobile and Spectrum Mobile. Importantly, the "mobile telephony/broadband services" exist in a broader converged broadband marketplace wherein traditional mobile wireless face cross-platform competition from potentially substitutable fixed wireless (FWA), cable, fiber, and satellite services.
To briefly recap the terms of the proposed transaction, T-Mobile would acquire UScellular's wireless operations, subscribers, and about 30% of its spectrum licenses for $4.4 billion. UScellular subscribers would gain access to T-Mobile's faster and more capacious 5G mobile wireless network.
T-Mobile and UScellular apparently do not have an overlapping competitive presence in thirty-seven percent (37%) of the Cellular Marketing Areas (CMAs) implicated by the proposed deal. Also, on average, T-Mobile’s spectrum holdings are reportedly lower in UScellular's geographic territory than in other areas. Post-transaction, consumers in those overlap areas would still have a choice of three nationwide mobile wireless providers, and many would also have a choice among EchoStar’s 5G service and/or a cable MVNO.
Moreover, petitions and replies filed in opposition to T-Mobile/UScellular do not raise any transaction-specific competitive concerns that would justify agency delay in making a decision. Concerns about spectrum concentration expressed variously by CCIA, EchoStar, and RWA appear overstated because T-Mobile would only acquire 30% of UScellular's spectrum, and providers AT&T, Verizon, and EchoStar all have vast valuable spectrum holdings. Indeed, it appears the agency's spectrum screen for closer analytical scrutiny is not triggered in any CMA subject to the deal.
Furthermore, claims or concerns raised by petitions and replies in the proceeding about data-roaming arrangements and employment-related matters do not appear to be tied to this specific transaction. Post-transaction, any aggrieved mobile provider can file complaints with the Commission for adjudication under the agency’s data roaming rules. Insofar as employment-related concerns are raised, they are more suitable for review by agencies such as the National Labor Relations Board.
Based on a review of the available record in light of competition principles, the proposed deal appears to offer public benefits without any harms that would outweigh them. The Commission should promptly act on the T-Mobile/UScellular proposal, without having the review delayed by matters that are unrelated to the transaction.
P.S. On January 8, the Free State Foundation filed its Opposition to Petitions to Deny in the FCC's review proceeding for T-Mobile/UScellular.
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