The devil continues to hide in the details when it comes to Dish Network's plan to enter the US wireless industry.
According to a recent T-Mobile filing with the FCC, a program that Sprint developed for low-income Californians needs to be straightened out before Dish can purchase roughly 9.2 million prepaid Boost customers in a deal initially valued at $1.4 billion. The move would bring satellite TV provider Dish into the US mobile industry as an MVNO of T-Mobile.
There are currently 11,000 people enrolled in the California program.
"T-Mobile hereby seeks clarification that retention of the approximately 11,000 Pilot Program customers does not violate the FCC’s merger condition," T-Mobile wrote. "We ask that this clarification be provided as soon as possible as the parties are anticipating closing soon and will need to know prior to closing whether these subscribers can be properly retained by T-Mobile."
At issue is a program developed by the California Public Utilities Commission (CPUC) intended to reinvigorate the US government's Lifeline program in the state. The Lifeline program – established more than four decades ago – is designed to provide discounts on telecommunications services to low-income Americans, though it has been clouded recently by political debates and reports of fraud.
In 2018, the CPUC worked with Sprint to use the Lifeline program to sign up more customers to Sprint's prepaid, Boost-branded wireless service.
However, T-Mobile said the customers who signed up for Sprint's offering would be "orphaned" if they are included in the sale of Boost to Dish.
"T-Mobile’s understanding is that Dish, the intended buyer of the Boost business, has no plans – or authority from the CPUC – to continue the Pilot Program. Accordingly, after the sale of the Boost business, the consumers participating in the Pilot Program – who are among our country’s most vulnerable citizens – will find themselves disenfranchised from the program and would lose the discounted rates designed to make wireless service more accessible to them. Such a result would plainly harm those customers and be contrary to the public interest."
T-Mobile explained that, under the terms of the CPUC's approval of the operator's merger with Sprint, the company needs to obtain approval from the FCC and the Department of Justice to retain the 11,000 people in the Lifeline program and not sell them to Dish.
In its filing, T-Mobile indicated that Dish supports its intention to keep those customers and to continue providing service to them.
T-Mobile's request to the FCC was filed Friday, and it's likely the agency will respond promptly given its full-throated support for the merger of Sprint and T-Mobile.
Moreover, it appears that Dish and T-Mobile are working to close the sale of Boost to Dish any day now. Dish confirmed to Light Reading last month it intends to buy the business despite the financial upheaval sparked by the COVID-19 pandemic, and T-Mobile on Friday disclosed Sprint's first-quarter financial performance in what one analyst suggested was a move to speed the sale of Boost to Dish.