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In the Senate, T-Mobile and Sprint Chiefs Say Their Proposed Merger is Necessary Because of Global 5G Race With China



WASHINGTON, June 28, 2018 – The CEO of T-Mobile on Wednesday defended his company’s proposed merger with Sprint against skeptical senators, claiming the merger is necessary in order for the U.S. to win the race for 5G wireless service against China.

A Senate subcommittee hearing investigating the competitive effects of the proposed merger on the wireless market echoed other recent hearings on Chinese telecommunications equipment manufacturers Huawei and ZTE.

These conflagrations are amplifying fears that the U.S. is losing the global 5G global race to China. T-Mobile CEO John Legere and Sprint Executive Chairman Marcelo Claure used this battle over 5G to make their case for the proposed merger.

At least when responding to senators, talking about 5G makes the difference

The latest effort at combination is not T-Mobile’s first attempt. In 2011, the Justice Department’s antitrust division blocked AT&T’s proposal to merge with T-Mobile. Also, In 2014, Sprint and its parent company, Softbank, considered a merger with T-Mobile but eventually dropped the deal.

Before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, Sen. Amy Klobuchar, D-Minnesota, asked Legere and Claure what they believed had changed since T-Mobile’s previous 2011 and 2014 attempts at mergers.

“What has changed is 5G opponents,” Claure said. “If the U.S. doesn’t launch 5G, there’s going to be other countries like China that are going to launch 5G ahead of us.”

Meanwhile, AT&T and Verizon “continue to just stick with the minimum of what they’re forced to do,” Legere said, accusing the two players of using their dominant positions in the market to slack off in technological innovation.

Legere argued that T-Mobile and Sprint need to combine their networks in order to develop 5G and keep the U.S. at head of the 5G race. “5G has to be nationwide,” Legere said.

The hype surrounding 5G is driving the passion for broadband wireless opportunities like self-driving cares

The hype surrounding 5G is increasingly hailed as the future of wireless and broadband connectivity. The notion that 5G service will allow for higher speed internet connections and enable breakthrough technology such as internet of things, automated cars, and remote healthcare is increasingly taking hold.

Though 5G is largely projected to primarily utilize the high band spectrum, it is set to eventually utilize mid and low band spectrum as well.

“5G will require access to a combination of low, mid and high band spectrum in order to fulfill the various use cases of 5G,” said Asha Keddy, the witness representing Intel, stressing the importance of making available greater access to wireless radio frequencies in developing 5G.

Legere called the combined assets of T-Mobile and Sprint a “uniquely complementary spectrum.”

“T‐Mobile (but not Sprint) has a decent amount of low‐ band 600 MHz spectrum, which works well over long distances but cannot handle the top speeds or massive data traffic that 5G will demand,” Legere said. On the other hand, Sprint has mid-band spectrum that T-Mobile does not have, he said, while T-Mobile has the high-band spectrum that travels quickly with great capacity and is expected to be used heavily for 5G.

Legere argued that the companies would be able to give 5G access to dense urban areas and extend broadband access to rural areas.

“Only this merger brings these assets together to enable a supercharged, nationwide 5G network,” Legere wrote in his testimony.

Voices critical of the merger also weighed in before the Senate subcommittee

Public Knowledge CEO Gene Kimmelman was much more skeptical of the impact that merger would have on 5G development. Kimmelman was senior advisory to Obama administration antitrust enforcement chief Christine Varney, and was a major player in opposing the 2011 AT&T/T-Mobile merger.

“This issue is not about promises,” Kimmelman said. “This is about law enforcement. This is about what the Clayton Act requires as passed by Congress, the Justice Department.”

In an already highly-concentrated wireless market, the merger would cause the primary national companies to drop to three, and therefore “substantially increase that concentration,” Kimmelman said.

The merger could therefore result in less innovation and inflated prices, Kimmelman warned, for the companies may “not necessarily raise praises, but leave prices higher than a competitive market would bear.”

“5G is important but there are many ways to look at how to get the 5G,” Kimmelman said. “There are other options for these companies.”

(Photo of T-Mobile CEO John Legere at CES in 2014 by fanaticTRX used with permission.)



China Not Retaliating on U.S. Export Policy Out of Fear of Further Restrictions: Experts

China recognizes that it cannot produce all tech on its own, one expert said.




Screenshot of Craig Allen, president of the US-China Business Council

WASHINGTON, February 27, 2023 – China has no reason to retaliate against U.S. export controls because it might lead to more restrictions on products which would not be in the Chinese Communist Party’s interests, said the president of US-China Business Council at a web conference on Wednesday.

In October, the Commerce Department prohibited the exportation to China of certain high-functioning chips necessary for supercomputers and moved to prevent other countries from providing China with certain semiconductors made with American technology.

The Commerce Department also limited American citizens’ ability to work with Chinese chip facilities. The restrictions were billed as a national security imperative and designed to limit the development of next-generation, chip-dependent Chinese military technology.

At the same time, the U.S. raised concerns that China would retaliate.

“China has a good number of tools or legal tools, which they could retaliate, but that’s hard,” said Craig Allen, president of US-China Business Council, a non-profit that promotes trade between the two countries. “If they do retaliate, for example, against a chip company or manufacturing equipment company, a tool company, or another type of company, then that will lead to further restrictions on the inflow of technology and a product into China. And so, they have not found a way to retaliate, that suits their interest and I hope it stays that way.”

However, China also has remarkable speed and scale, Allen said. He considers China’s manufacturing speed and scale of accessing the market as “quite formidable.”

“Their dominance in the processing of rare earths, for example, is something that we should be concerned about,” according to Allen.

Other experts on the panel had similar opinions as well.

The most advanced artificial intelligence chips go into supercomputing and equipment for the production of semiconductors, according to Jimmy Goodrich, vice president of global policy at the Semiconductor Industry Association. The export control policy is limited to the “most cutting edge technology,” Goodrich said.

“The vast majority of chips don’t depend on and applications don’t depend on those advanced technologies,” said Goodrich. “Many of those are still unrestricted, because they’re ubiquitous, China has a lot more stronger domestic capability to produce them.”

But China may already be cognizant that development of chips is a globally integrated endeavor.

“It’s too complex, too global, too interdependent for one country to be able to produce all these technologies on their own,” Goodrich said, emphasizing the importance of multilateral approach. And that could be why, Goodrich added, China is hesitant to retaliate.

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Commerce Official Calls for Partnerships with Global Allies in Tech Race with China

Improving competitiveness with China is becoming the top priority for Washington.




Photo of Deputy Commerce Secretary Don Graves, by Tim Su

WASHINGTON, February 6, 2023 – Deputy Commerce Secretary Don Graves said an event late last month that the U.S. needs to build partnerships with other countries to tilt the balance in its favor against the technological influence of China.

“This is how we’re going to build U.S tech leadership, not with silver bullets, but step-by-step with government, business, educational institutions and communities all working together to create the conditions that will drive innovation, attract investment and grow quality middle class jobs,” said Graves at the Information Technology Industry Council’s tech and policy summit on January 31.

Graves addressed a concern that China has moved aggressively to establish a technological powerhouse “through massive government support for their own domestic industries, strategic use of capital to gain access to early stage, commercial tech” and allegedly through technology theft.

Graves said the Joe Biden administration understands the need for a different approach, a modern strategy that will focus on technology that provide innovation and job opportunities. He referred to a focus on computing-related technologies comprising chips, quantum and artificial intelligence and clean energy tech, that will reduce dependence on fossil fuels and protect against the costs of climate change.

The comments come after the House voted to establish a new committee to study the competitive landscape between China and the U.S. The Federal Communication Commission has already designated major Chinese companies such as Huawei and ZTE national security threats. In order to increase independence, President Biden has signed the Chips and Science Act into law in August last year that incentivizes the domestic manufacturing of key technologies, including semiconductors.

Sen. Todd Young, R-IN, one of the speakers at the event, called on Congress to be more united when it comes to the issues with China.

“We need to become more economically resilient,” Young said. “That means hardening our supply chains,” which he said can be done using the success of the Chips and Science Act.

“The administration’s theme that domestic policy is foreign policy is a good way to think about many things.”

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New Leadership and Priorities for Republican-Led Energy and Commerce Committee

The new chair renamed three subcommittees, hinting at the GOP’s goals for the coming term.



Photo of Rep. Cathy McMorris Rodgers in 2018 by Gage Skidmore, used with permission

WASHINGTON, January 27, 2023 — Rep. Cathy McMorris Rodgers, R-Wash., recently named chair of the House Energy and Commerce Committee, announced on Wednesday the new Republican leadership and membership of each subcommittee, giving insight into which members of Congress will be at the forefront of key technology decisions over the coming term.

McMorris Rodgers also announced changes to the committee’s structure, renaming three subcommittees and shifting some of their responsibilities. The changes aim to “ensure our work tackles the greatest challenges and most important priorities of the day, including lowering energy costs, beating China and building a more secure future,” McMorris Rodgers told Fox News.

Rep. Frank Pallone, Jr., D-N.J. — now the committee’s ranking member after serving as chair for the past four years — announced on Friday each subcommittee’s Democratic membership and leadership, and named Rep. Kim Schrier, D-Wash., as the vice ranking member for the full committee.

Rep. Kelly Armstrong, R-N.D., who will serve as the committee’s vice chair, is a vocal critic of Big Tech. In 2021, he was one of several Republicans who championed major reforms to Section 230 of the Communications Decency Act.

The committee’s new names hint at some of the ways that the committee’s priorities may shift as Republicans take control. The former Consumer Protection and Commerce Subcommittee is now titled the Innovation, Data and Commerce Subcommittee and will be chaired by Rep. Gus Bilirakis, R-Fla., alongside Ranking Member Jan Schakowsky, D-Ill.

Bilirakis and McMorris Rodgers have already announced the subcommittee’s first hearing, which will focus on U.S. global technology leadership and competition with China.

The Communications and Technology Subcommittee, now led by Chair Bob Latta, R-Ohio, and Ranking Member Doris Matsui, D-Calif., also emphasized competition with China in the announcement of a hearing on the global satellite industry.

Latta has previously spoken out against the total repeal of Section 230, but he has also expressed concerns about the extent to which it protects tech companies. In an April 2021 op-ed written jointly with Bilirakis, Latta accused social media platforms of engaging in “poisonous practices… that drive depression, isolation and suicide.”

The Environment, Manufacturing and Critical Minerals Subcommittee, formerly known as the Environment and Climate Change Subcommittee, will be led by Chair Bill Johnson, R-Ohio and Ranking Member Paul Tonko, D-N.Y.

The Energy Climate, and Grid Security Subcommittee, formerly known as the Energy Subcommittee, will be led by Chair Jeff Duncan, R-S.C., and Ranking Member Diana DeGette, D-Colo.

The Health Subcommittee will be led by Chair Brett Guthrie, R-Ky., and Ranking Member Anna Eshoo, D-Calif. The Oversight and Investigations Subcommittee will be led by Chair Morgan Griffith, R-Va., and Ranking Member Kathy Castor, D-Fla.

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