The Sprint/T-Mobile merger had appeared to be sailing through judicial and FCC review. Now, however, with the Democrats taking over the House, Congress is exercising its oversight role. Energy and Commerce and Judiciary Committees plan to hold a joint hearing on the merger on Feb. 13 to exam the merger’s potential impacts on consumers, workers and the wireless industry.
“A merger between T-Mobile and Sprint would combine two of the four largest wireless carriers and the carriers with the largest numbers of low-income customers,” said Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ).
While the complete list of hearing participants is still being confirmed, T-Mobile CEO John Legere and Sprint Executive Chairman Marcelo Claure have both agreed to testify.
This will be the first merger review hearing before the Energy and Commerce Committee in more than eight years—the last time Democrats held the majority in the House of Representatives.
“As the committees with oversight of the FCC and Department of Justice, we must hold this hearing to examine the effects on important issues like jobs, costs to consumers, innovation and competition,” Pallone said. “We look forward to examining this merger from the perspective of what is in the best interest of consumers and hardworking people.”
The merger was expected to close at the end of the second quarter of this year with the completion of reviews by U.S. Department of Justice and the FCC. There certainly may be conditions placed not the merger by those two agencies, if they approve it.
“Regarding the Sprint/T-Mobile merger, one sticking point was Deutsche Telekom [owner of T-Mobile] punting on Huawei as a condition. Softbank is already replacing them in Japan. Not sure how real this issue was. If this is a must have and DT won’t play, then the deal may be shot down,” said Earl Lum, analyst, EJL Research. “Any hearing is never good if it goes south so will need to wait and see what they say or DON’T say. I have to assume some spectrum will be given back as part of the deal.”
Calls for Merger Hearing Echoed in the Senate
Hearings may also be held on the Senate side. Senate Commerce, Science and Transportation Committee Chairman Roger Wicker (R- Miss.) and Ranking Member Maria Cantwell (D-Wash.) were urged schedule a hearing on the proposed merger in a letter by Senators Edward Markey (D-Mass.), Amy Klobuchar (D-Minn.), Tom Udall (D-N.M.), Tammy Baldwin (D-Wisc.), and Richard Blumenthal (D-Conn.), all members of the committee.
“The merger of T-Mobile and Sprint would reduce the number of nationwide wireless carriers from four to three,” according to the letter. “This reduction in competition raises a number of important questions that the committee should address.” The letter went on to note the possibility of harmful repercussions, such as “higher prices, fewer choices and less flexibility in switching carriers.”
The Senators went on to demand scrutiny of the 5G claims of T-Mobile and Sprint. “T-Mobile and Sprint have argued that their merger is necessary for successful deployment of a robust nationwide 5G network, despite previous individual assertions by each company made prior to the merger boasting of their own progress building towards 5G.”
T-Mobile, Sprint, if Joined, to Build 5 ‘Customer Experience Centers’
In what will certainly be a talking point during the hearings, T-Mobile and Sprint have announced that, upon the merger, they plan to build five new “Customer Experience Centers” around the United States, averaging 1,000 new jobs each.
The new centers will give customers more personalized support. Additionally, the companies plan to expand two existing T-Mobile Centers, cumulatively creating up to 5,600 additional American customer care jobs by 2021.
Overland Park, Kansas, will be the first of the five new locations. The Overland Park facility will be a new addition to the existing Sprint campus, which was previously announced as the New T-Mobile’s secondary headquarters.