5G, rural coverage, pricing and which hotels T-Mobile US CEO John Legere prefers included in House hearing
Yesterday the U.S. House of Representatives Judiciary Subcommittee on Antitrust, Commercial and Administrative Law convened a hearing to examine the potential impacts of a merger between carriers T-Mobile US and Sprint. The wide-ranging discussion, which involved T-Mo CEO John Legere, Sprint Executive Chairman and former CEO Marcelo Claure and other subject matter experts, was marked by significantly variable questioning from Republican and Democratic members.
One one side, reps focused in Legere and T-Mobile expenditures at President Trump’s Trump International Hotel in Washington D.C., and the potential impact on rural and minority customers, while questioning from Republicans spoke more to how a combination will impact domestic 5G efforts and the role of Chinese telecom infrastructure vendors in current and future telecom networks.
The partisan nature of the conversation was immediately evident. In his opening comments, prior to hearing any testimony from the witnesses, David Cicilline (D-RI) said he was “deeply skeptical” that consolidation leads to heightened competition, which he characterized as “critical to building out the nation’s internet infrastructure.”
Noting President Trump’s reported interest in blocking the merger of AT&T and Time Warner, Cicilline said review of the proposed $26 billion tie-up of Sprint and T-Mobile US will serve as a “critical test” of whether antitrust officials are dedicated to their stated charge or to the whim’s of the White House. “America’s monopoly problem has fundamentally broken our economy,” he said.
On the other side of the aisle, Jim Sensenbrenner (R-WI) called out Cicilline for putting a “partisan spin on the proposal. I don’t think antitrust questions should be partisan in nature whatsoever. There are very few of these proposals that the committee has examined where Republicans and Democrats have been divided from the get-go.”
On to the witness testimony: Legere made clear that the combined company–New T-mobile–will keep prices at the same level for at least three years, create new jobs, expand rural broadband access and heighten competition. “The benefits of 5G wont’ just flow to big cities,” he said. “Combining Sprint and T-Mobile will produce a faster, broader, deeper network that is truly nationwide.”
Legere faced relatively extensive questioning related to stays by him and other T-Mobile US executives at the Trump International D.C. Rep. Hank Johnson (D-GA) said the company spending $195,000 at the property as the merger is being considered “doesn’t pass the smell test. Do you see how that looks? Do you understand the optics of that? It looks like what’s happening is that T-Mobile is trying to curry favor with the White House.”
Legere clapped back that the approximately $195,000 represents about 10% of the money the company has spent on D.C. hotel stays. “I’m a long-time Trump hotel stayer. The optics of me staying at the Trump hotel haven’t changed for 10 years.”
Claure, who serves as Sprint’s executive chairman and COO of parent company SoftBank, said the combined company, given its spectrum portfolio, could deliver and 8x network capacity increase, which lowers the cost of transmitting data. “If we do that, we have an economic interest to fill that capacity. We have made a commitment that we’re going to lower prices. We are making a commitment because we have 8-times the capacity, which is something substantial…Of course we’re going to lower prices.”
Come back tomorrow for more coverage of the hearing.
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