C Spire Suddenly Endorses Sprint/T-Mobile Deal, but Altice Still Opposes It

Mike Dano
5/29/2019

The proposed merger between Sprint and T-Mobile took yet another unexpected turn Wednesday when Altice USA voiced its full-throated opposition to the transaction despite new conditions proposed by the chairman of the FCC specifically designed to appease the cable operator.

"Altice explained that the proposed commitments offer nothing new to Altice," the operator wrote in a new filing to the FCC. Indeed, the company said none of the new commitments offered by Sprint, T-Mobile and the FCC "address Altice's concern about the anticompetitive impact of the merger on the wholesale market."

"Further, T-Mobile's commitment to negotiate what appears to Altice to be a full infrastructure Mobile Virtual Network Operator ('iMVNO') agreement with the 'to be identified' buyer of Boost Mobile within a specific time period is an important new development," Altice wrote, referring to new conditions around the merger that would force the combined company -- dubbed New T-Mobile -- to sell Sprint's Boost Mobile prepaid business and then offer the buyer cheap wholesale access to new T-Mobile's network. "The fact that T-Mobile felt the need to make an explicit commitment to negotiate a competitive wholesale agreement confirms Altice's concern that absent specific commitments to do so, New T-Mobile will not offer competitive wholesale agreements in a post-merger world."

Concluded the cable company: "Altice continues to believe that the merger, even with the newly proposed commitments by T-Mobile, should be denied given the harm to the wholesale market that will result from the merger."

C Spire's flip-flop
Altice USA's continued opposition to the transaction stands in sharp contrast to regional telecom company C Spire, which apparently had a change of heart and now supports the deal.

"Our advocacy was limited to a narrow set of issues, and we are no longer concerned that those issues should prevent the transaction from being approved," said Ben Moncrief, vice president of government relations for C Spire, in a statement to Light Reading.

C Spire -- a longtime and vocal opponent of the merger on the grounds that it would reduce the number of suitable wireless network roaming partners -- was a founding member of the 4Competition Coalition, an organization specifically devoted to opposing the merger of Sprint and T-Mobile. Other prominent members of the organization -- which are still listed on the association's website -- include Dish Network, the Communication Workers of America union and public-interest group Common Cause. A spokesman for the 4Competition Coalition declined to comment on the topic.

Altice USA's continued opposition to the proposed merger of Sprint and T-Mobile is particularly interesting given reports that the company is weeks away from the launch of a new wireless service powered by Sprint's LTE network. According to a new report, Altice USA plans to offer monthly services as low as $20 a month, far undercutting its cable rivals in the mobile space as well as Sprint's own prices.

Better than a soap opera
Although many had thought that the FCC would ultimately move against the proposed transaction between Sprint and T-Mobile, the agency's chairman made a surprise announcement earlier this month by agreeing to support the merger with a number of new conditions. Among them was a an agreement that New T-Mobile retain Sprint's existing MVNO deal with Altice USA, and that it would also commit to "engage in good faith negotiations to expand the existing Sprint/Altice agreement to the New T-Mobile 5G network."

However, none of the conditions included mention of roaming agreements for companies like C Spire.

Perhaps the biggest condition outlined by the FCC this month was that the combined company sell Sprint's Boost Mobile prepaid business. According to a report from Reuters, prepaid company Q Link Wireless is teaming with some private equity backers to place a bid for Boost for as much as $3 billion.

The report added that FreedomPop's Stephen Stokols is separately advising a private equity group that is also preparing a bid for Boost.

And Peter Adderton -- the founder of Boost Mobile who sold the US business to Nextel in 2004, which was later acquired by Sprint -- is also working to form a bid for Boost.

"Off to NYC now the real work begins... :)" Adderton tweeted this week.

The US Department of Justice hasn't yet said how it might rule on the proposed Sprint/T-Mobile merger.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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