Federal Communications Commissioner Jessica Rosenworcel (pictured) this week warned Sprint and T-Mobile US will have a lot of questions to answer regarding any potential merger agreement they come to.
In what was widely viewed as a positive for the pair’s merger talks, the FCC’s 20th Mobile Wireless Competition Report declared the US wireless market to be sufficiently competitive for the first time since 2009. However, Rosenworcel and fellow Democratic Commissioner Mignon Clyburn blasted the report’s findings and said the commission could not afford to stick its “head in the sand” with such a consolidation waiting in the wings.
“While this report celebrates the presence of four nationwide wireless providers, let’s be mindful that a transaction may soon be announced that seeks to combine two of these four,” Rosenworcel said in comments delivered ahead of a dissenting vote.
“Any transaction before us will require someone to explain how consumers will benefit, how prices will not rise, and how innovation will not dissipate in the face of so much more industry concentration. Someone will also need to explain how having fewer potential big bidders in upcoming spectrum auctions will not render us substantially less powerful. Those are questions that hover over this report and we should not ignore them.”
Though analysts have indicated the current presidential administration in the US is more favourable to big merger deals, MoffettNathanson placed the odds of approval for a Sprint T-Mobile merger at 50:50.
Any deal would face anti-trust scrutiny from the Department of Justice and a competition review from the FCC.
FCC chairman Ajit Pai notably distanced himself from former chairman Tom Wheeler’s opinions about the number of players necessary in a competitive market. Speaking after Tuesday’s FCC meeting, Pai told the press: “the Wireless Competition Report simply outlines the facts regarding the market and we make no opinion as to the optimal number of carriers within that marketplace”.
Pai added he takes no “preexisting view as to what the optimal market structure is”.