EchoStar, CWA, others move against T-Mobile's UScellular purchaseEchoStar, CWA, others move against T-Mobile's UScellular purchase

Dish Network owner EchoStar teamed up with several public interest groups, unions, trade associations and others to oppose T-Mobile's proposed $4.4 billion purchase of parts of UScellular.

"T-Mobile is asking for the commission's blessing to further entrench its dominance over the wireless voice and broadband markets, making it harder for others (like EchoStar) to compete. The commission should deny this transaction, which threatens to substantially harm competition while offering only illusory public interest benefits," EchoStar wrote in a new filing to the FCC.

EchoStar isn't the only market player to voice its displeasure at the proposed combination of T-Mobile and UScellular. That transaction promises to remove UScellular from the US market, thereby eliminating one of the last few remaining regional wireless network operators and strengthening T-Mobile's position across the 21 states where UScellular maintains operations.

"The merger would substantially lessen competition in local markets where UScellular operates, hurting workers, consumers and other rural carriers. The commission should reject the proposed transaction as currently structured and require specific enforceable measures ... to ensure that the merger remains in the public interest," wrote the Communications Workers of America (CWA), a union that counts thousands of members inside AT&T and Verizon but has struggled to unionize workers in T-Mobile.

And a collection of public-interest groups argued that the proposed merger between T-Mobile and UScellular would "result in the loss of the fifth largest marketplace competitor with a network covering approximately 10 percent of the country's population, reallocate spectrum resources predominantly to the three top wireless carriers only to make it nearly impossible for a fourth competitor to emerge in the market, and waste valuable funding secured for building out 5G networks." The groups include Public Knowledge, New America's Open Technology Institute and Community Broadband Networks Initiative.

The Rural Wireless Association also voiced its opposition.

Nonetheless, T-Mobile officials continue to expect to close the UScellular transaction next year.

"I don't know how many mergers you've heard of in the past that are like, yeah, I can promise you better networks and lower prices right from the get-go, and the company, of course, will benefit from the synergies, and it's highly accretive. So this is going to be a win all the way around, and I'm confident the government will see it that way as well," T-Mobile CEO Mike Sievert said this week at an investor event.

The context and the details

UScellular, along with many other smaller wireless network operators, has been struggling for years amid rising competition with the likes of Comcast and Charter Communications. UScellular has also labored to compete with its bigger rivals like Verizon and their increasing encroachment into UScellular's territory.

That's why it was no surprise when T-Mobile said in May it would purchase around 30% of UScellular's spectrum holdings, all of its 4.5 million customers and its retail stores in a deal worth $4.4 billion. T-Mobile has also said it will make job offers to "a significant number" of UScellular's employees as part of the transaction.

Following T-Mobile's announcement, both AT&T and Verizon inked deals to acquire roughly $1 billion each worth of UScellular's spectrum.

But already T-Mobile is facing some static in its efforts to purchase UScellular. The US Department of Justice (DoJ) advised a deeper review of T-Mobile's UScellular play due to T-Mobile's foreign owner. That's because T-Mobile is controlled by Germany's Deutsche Telekom, which indirectly holds 50.42% of T-Mobile's stock and also holds a proxy agreement that authorizes it to vote additional shares.

But most industry watchers expect T-Mobile to ultimately close on its purchase of UScellular thanks to the incoming Trump administration, which is expected to be more lenient to big business than the Biden administration.

President Trump's first administration gave the green light to T-Mobile's $26 billion purchase of Sprint in 2020.