& cplSiteName &

Altice USA Urges FCC to Deny, Alter T-Mobile/Sprint Deal

Jeff Baumgartner
8/28/2018
50%
50%

Altice USA has petitioned the FCC to deny the proposed T-Mobile/Sprint merger -- or hit the combined firm with a handful of conditions -- as it fears that more mobile industry consolidation will have anti-competitive effects and impair Altice USA's MVNO agreement with Sprint.

Altice USA struck a "full" MVNO deal with Sprint Corp. (NYSE: S) in Q4 2017 and expects to launch service in 2019. In the meantime, Altice USA is moving forward with tests in the emerging, shared 3.5 GHz Citizens Broadband Radio Service (CBRS) band to offset some of its MVNO costs. (See Altice USA Gears Up for Trio of CBRS Trials and Altice USA: 'Wait Till Next Year!' )

In the petition (PDF) filed August 27, Altice USA maintained that is "confident" in its ability to enter the mobile market next year based on its current deal with Sprint, but lodged concerns that T-Mobile US Inc. has "made no tangible commitments regarding meaningful support for current MVNO partners..." with respect to areas such as providing additional capacity, improving national coverage and lowering pricing that can facilitate competition in the mobile sector.

Altice USA said its view is magnified by "hostile statements" against MVNOs, including cable operators entering the mobile market.

Of specific note, Altice USA pointed to comments by T-Mobile CEO John Legere in February 2018 during the company's Q4 2017 earnings call when he referred to Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s Xfinity Mobile service (which uses an MVNO with Verizon Wireless) as "very irrelevant" and put forth assumptions that Charter Communications Inc. 's similar mobile offering "will be irrelevant squared." (See Charter Unleashes Spectrum Mobile…Without the iPhone and Mobile Is No Passing Fad for US Cable.)

"The harms of the transaction are especially potent today as cable operators entering the wireless market using MVNOs are only beginning to offer consumers wireless choice," Altice USA argued.

If an outright denial isn't in the cards, Altice USA also outlined a list of conditions that, it believes, would help to protect MVNOs, particularly those (like Altice USA) that have some infrastructure and can compete on "more than just price":

  • Commit to honor and implement existing MVNO agreements, including good faith finalization of any future requirements in those agreements;
  • Commit to offering existing MVNO partners – for the full term of existing deals or for ten years post-consummation, whichever occurs later -- the best wholesale terms and conditions offered individually by each of the applications to their MVNO partners;
  • Divest spectrum that exceeds "that exceeds the spectrum screen, and associated network infrastructure" in order to make those assets to MVNOs and smaller wireless players that need it for national mobile deployments... so long as any divestiture partner isn't controlled or owned by AT&T, Verizon or the new T-Mobile; and,
  • File detailed quarterly reports with the FCC describing the merged company's status in implementing the above conditions for ten years after the deal is consummated.

Altice USA acknowledged that Legere mentioned at a recent Senate hearing that T-Mobile would have "strong incentives to continue offering MVNOs competitive prices," but held that incentives are not the same as assurances or commitments.

As opposition against the deal hit the FCC docket, Legere took to Twitter Tuesday to mock T-Mobile's biggest US rivals and reset the argument that the Sprint merger is about taking it to AT&T and Verizon.

— Jeff Baumgartner, Senior Editor, Light Reading

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Michelle
50%
50%
Michelle,
User Rank: Light Sabre
8/31/2018 | 2:29:19 PM
Re: Odd.
Seems plausablie. 
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
8/29/2018 | 11:30:38 PM
Re: Odd.
It's also entirely possible that AT&T+VZ are taking a wait-and-see approach and don't particularly care because they are confident in beating the both telcos combined anyway in the long run.
Joe Stanganelli
50%
50%
Joe Stanganelli,
User Rank: Light Sabre
8/29/2018 | 11:28:40 PM
Corp counsel needs to help direct IR strategy
All this only goes to show how important it is to have the lawyers involved in the earnings calls and all manner of IR functions -- beyond mere SEC forms and typical check-the-box compliance, but in IR strategy. That way, you might avoid having your colorful CEO say things on said earnings calls that get you in trouble later.

I'm also reminded, on this note, of how Reed Hastings got kind of in trouble with the SEC a few years for a relatively benign Facebook post announcing what could have been considered material information (in this case, # of subscribers).
Clifton K Morris
50%
50%
Clifton K Morris,
User Rank: Lightning
8/29/2018 | 10:18:38 PM
Odd.
The more I think about this merger including the 40-50 brands MVNOs that will be eliminated due to overlap, the more I believe US-owned companies like Verizon and AT&T should also file similar suits. If allowed, it seems like the FCC doesn’t think American companies should be allowed to compete- purely based on spectrum holdings. Even if you look at the outcomes of the incentive auctions. In those auctions, US TV broadcasters, many were entrepreneurs, ultimately shut down to support a European Monopoly that today is still partially owned by a foreign government.

It’s strange that free TV broadcast is being replaced with T-Mobile’s upcoming fixed wireless data network and paid TV service.

On the flip side, it was reported in Seattle Times Newspaper that John Legere stands to get a substantial golden parachute if the merger is approved. Who knows. Maybe AT&T and Verizon remain silent, and want to allow a competitor with double the PCS/AWS licenses and a robust tier-1 fiber network because they prefer to see Legere go away.
Jeff Baumgartner
50%
50%
Jeff Baumgartner,
User Rank: Light Sabre
8/29/2018 | 10:34:13 AM
More opposition
Among others opposing the deal, Dish, which has plans to build its own network despite cries for it to sell its spectrum, argued that the combo would lead to higher prices and tossed some cold water on the contention that the merger is needed to fuel the move to 5G, Reuters notes, adding that the CWA believes that the deal will result in the loss of more than 28K jobs.
https://www.reuters.com/article/us-sprint-corp-m-a-t-t-mobile-us-altice/altice-files-opposition-to-t-mobile-and-sprint-merger-idUSKCN1LD244

The response from T-Mobile & Sprint is due by September 17. JB
Featured Video
Flash Poll
From The Founder
After almost two decades at Light Reading, it's time for a different optical adventure.
Upcoming Live Events
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 6, 2018, London, United Kingdom
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
March 12-14, 2019, Denver, Colorado
All Upcoming Live Events
Hot Topics
Apple: It's the End of the SIM as We Know It
Iain Morris, International Editor, 9/13/2018
MWCA Day 2 Recap: '5G' Rolls Out & We Roll On
Phil Harvey, US News Editor, 9/14/2018
The Mobile Network Is Becoming a Cloud Service
Phil Harvey, US News Editor, 9/18/2018
MWCA Day 1 Recap: 5G Is Here…?
Phil Harvey, US News Editor, 9/13/2018
So Long, & Good Luck With That
Steve Saunders, Founder, Light Reading, 9/14/2018
Animals with Phones
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Partner Perspectives - content from our sponsors
One Size Doesn't Fit All – Another Look at Automation for 5G
By Stawan Kadepurkar, Business Head & EVP, Hi-Tech, L&T Technology Services
Prepare Now for the 5G Monetization Opportunity
By Yathish Nagavalli, Chief Enterprise Architect, Huawei Software
Huawei Mobile Money: Improving Lives and Accelerating Economic Growth
By Ian Martin Ravenscroft, Vice President of BSS Solutions, Huawei
Dealer Agent Cloud – Empower Your Dealer & Agent to Excel
By Natalie Dorothy Scopelitis, Director of Digital Transformation, Huawei Software
All Partner Perspectives