Congress Should Not Use COVID-19 Recovery Money to Fund T-Mobile’s Merger Commitments

Tuesday, April 21, 2020

The Communications Workers of America (CWA), New America’s Open Technology Institute, the Rural Wireless Association, NTCA - The Rural Broadband Association, the American Economic Liberties Project, and Free Press Action sent a letter today calling on Congress to ensure that T-Mobile does not receive COVID-19 recovery funding to meet the merger specific build-out commitments it agreed to when it sought approval of the T-Mobile/Sprint merger from the Federal Communications Commission (FCC), Department of Justice, state attorneys general, and state public utilities commissions.

READ THE LETTER HERE: https://cwa-union.org/sites/default/files/t-mo_letter_to_congress_-_final.pdf

“The New T-Mobile has repeatedly and emphatically claimed that as a direct result of the merger, it would have the necessary resources to deliver 5G to millions of square miles of the U.S. and hundreds of millions of Americans, including those living in and traveling through rural America,” the letter says. “[T]o the extent there will be additional stimulus recovery measures Congress needs to make sure T-Mobile does not receive funding as a corporate handout to meet commitments it already made based on synergies that it lauded to get its deal done.” 

The groups also point out that the FCC specified that its decision to approve the merger “would be conditioned on the network build out commitments of the licensees to provide 5G service to a large portion of the U.S. population, including rural areas.”  

“Congress must hold the new T-Mobile accountable for the promises it made to ram the merger through the approval process,” said CWA Director of Government Affairs Dan Mauer. “T-Mobile promised that the merger would give the company the resources to build out 5G to nearly the entire U.S. population, including rural areas. COVID-19 recovery funds should be used to address the crisis caused by the pandemic, not as a corporate handout to help the new T-Mobile fulfill the promises the company was eager to make to push this merger through.”

“On April 1, 2020, on his first day as CEO of the ‘New’ T-Mobile, Mike Sievert said: ‘We’ve had eight quarters of blockbuster results during the pendency of this merger of T-Mobile, and nothing has changed in our long term thesis -- this is about bringing together these two companies and the uniquely positioned assets of the two, to unlock the potential of massive scale, and invest that, the synergies from that massive scale into creating the world’s best 5G network.’ Even amid the COVID-19 crisis and resulting global economic turmoil, T-Mobile acknowledges that the synergies it gains with the Sprint merger means that it does not need any type of economic assistance from the U.S. government. RWA has come to the same conclusion and urges Congress to allow this new behemoth to stand on its own without government support,” said Carri Bennet, General Counsel for the Rural Wireless Association.

“T-Mobile's takeover of Sprint will mean fewer choices and higher prices for people who need essential communications services,” said Free Press Action Vice President of Policy Matt Wood. “Hundreds of millions of people are struggling right now due to the COVID-19 pandemic and economic crisis, and Free Press Action has called on Congress to provide billions of dollars in funding to keep people connected to the internet while they're staying home and trying to stay online. But while increased public investment in broadband connectivity and affordability is exactly what the country needs at this moment, T-Mobile certainly does not need and should not get any taxpayer money just to keep the overblown promises it made to sell its merger.”

"T-Mobile has promised the government that its anti-consumer, anti-worker merger with Sprint will reap benefits for the public,” said Joshua Stager, Senior Counsel for New America's Open Technology Institute. “Congress must hold T-Mobile accountable for these promises, and that includes ensuring that T-Mobile receives no taxpayer money to fulfill these promises. T-Mobile is already in a position to raise prices and stifle competition—they don't need corporate welfare to boot."

For nearly two years, T-Mobile argued that as soon as it could join forces with Sprint, it would be in a position to compete effectively against AT&T, Verizon, and other telecom and cable industry giants by offering numerous “compelling public interest benefits” to America’s broadband consumers. New T-Mobile made the following merger-specific buildout commitments to expand coverage and increase download speeds to rural America to convince the Federal Communications Commission and the U.S. Department of Justice to approve the merger:

  • New T-Mobile will offer download speeds of 25 Mbps or more to 84% of America’s rural POPs by 2024.  
  • New T-Mobile will offer download speeds of 25 Mbps or more to 2.4 million square miles of rural America by 2024.  
  • New T-Mobile will offer “outdoor” coverage to 99% of America’s rural POPs by 2024.
  • New T-Mobile will bring 5G to at least 99% of the U.S. population receiving download speeds of 50 Mbps or more by April 1, 2026.
  • New T-Mobile will bring 5G to at least 90% of the U.S. population receiving download speeds of 100 Mbps or more by April 1, 2026.

 

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About CWA: The Communications Workers of America represents working men and women in telecommunications, customer service, media, airlines, health care, public service and education, and manufacturing.

NTCA represents approximately 850 independent, community-based telecommunications companies and cooperatives and more than 400 other firms that support or are themselves engaged in the provision of communications services in the most rural portions of America.  All NTCA service provider members are full service rural local exchange carriers (“RLECs”) and broadband providers, and many provide fixed and mobile wireless, video, satellite and other competitive services in rural America as well.

Rural Wireless Association is a 501(c)(6) trade association dedicated to promoting wireless opportunities for rural telecommunications companies who serve rural consumers and those consumers traveling in rural America. RWA’s members are small businesses serving or seeking to serve secondary, tertiary, and rural markets. Each of RWA’s member companies serves fewer than 100,000 subscribers. 

Free Press Action is a nationwide, non-partisan, non-profit with nearly one and a half million members across all fifty states, the District of Columbia, and Puerto Rico. It fights for people's communications rights and fights against corporate consolidation that raises prices, reduces choice, and deprives affordable service to marginalized and under-served communities.

New America's Open Technology Institute works at the intersection of technology and policy to ensure that every community has equitable access to digital technology and its benefits. OTI promotes universal access to communications technologies that are both open and secure, using a multidisciplinary approach that brings together advocates, researchers, organizers, and innovators.

American Economic Liberties Project is an independent organization fighting against concentrated corporate power to realize economic liberty for all, in support of a secure, inclusive democratic society. Our team and growing network include policymakers, lawyers, economists, working people, business owners, artists, and activists allied against excessive consolidations of economic and political power.

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