Connect with us

Antitrust

T-Mobile’s Acquisition of Sprint Passes Federal Muster, But 16 States Press On in Opposition

Published

on

Photo of event at the Capitol Forum by Masha Abarinova

WASHINGTON, November 14. 2019- Despite the approval of the T-Mobile-Sprint merger by the Federal Communications Commission and the Department of Justice, 16 state attorneys general are still determined to block the acquisition. Policy experts at Thursday’s Capitol Forum conference advocated both the benefits and drawbacks of the merger, as well as how it will affect competition in the wireless industry.

The state AGs will have a hard time proving that the merger is harmful to consumers, said Former FCC Commissioner Robert McDowell. A substantial amount of competition analysis, he said, is necessary to show that higher pricing and other adverse effects may arise.

The agencies’ decision is the correct call, McDowell continued, because the FCC has the public interest standard in mind, whereas the DOJ has the antitrust expertise to support it.

Sprint alone cannot build a nationwide coast-to-coast 5G wireless network, said McDowell. The carrier has deployed the service in only nine cities so far, and T-Mobile is expanding their 5G coverage at a much more rapid pace.

Competition is ultimately the best enforcer of the merger, he said, with customers leading the drive-testing for innovation.

INCOMPAS Chief Advocate and General Counsel Angie Kronenberg argued that the merger will benefit the wholesale wireless market and particularly DISH Network Corporation’s contract with T-Mobile.

DISH holds a unique place in this transaction, she said, because unlike other merger participants, it will develop its own 5G wireless network and subsequently help users transition from 4G services.

A fourth major wireless network, Kronenberg added, is necessary to help consumers get the service they need. Moreover, DISH has a history of disrupting entrenched markets, such as broadcast radio and satellite services. It doesn’t seem far-fetched for DISH to enter the wireless market as a full-fledged, 5G facilitated network, she said.

Billions of dollars are at risk if DISH fails to meet its buildout requirements in the allotted timeframe, Kronenberg said. That’s why the company has huge incentives to increase 5G rollout rates that can put immediate downward pressure on pricing.

On the opposing side of the merger, Deborah Goldman, director of Research and Telecommunications Policy at Communication Workers of America, argued that it may not deliver the services promised and have unilateral anticompetitive effects.

Goldman referred to Commissioner Jessica Rosenworcel’s past statement about the harm the merger may bring to the distribution of mid-band spectrum. The FCC can better serve the public interest, she said, if it explored alternative options to a price-rising, competitor-killing merger.

DISH Network has also been underperforming in sales the past few years, Goldman continued, making it unlikely that DISH can replace the competition lost by the merger.

Market structure, Goldman said, is key in disruption. Even if there is an excess capacity of spectrum, the wireless market is still highly influenced by competitors. It’s also not entirely certain that Sprint alone is unable to rollout 5G services, she said, as the company possesses thousands of small cell tower leases and spectrum assets from its corporate owner, SoftBank.

Regarding the litigation process itself, legal experts at the conference said that the states have a tough case to make and that the attorneys present must be careful not to politicize the trial.

A horizontal merger has the presumption that the judge will defer to the state, said Corey Roush, partner at Akin Gump. State AGs will need ample time to prove that the merger is anticompetitive and establish a counter-narrative to what the government is putting forward.

However, Roush added, since the trial will not take place in D.C., where judges are more deferential to the federal government, the state clients have a slightly better chance of winning the case. The defendants need to prove that they have the right market to build upon the merger, he said.

The federal government can make a case that Sprint is ill-equipped to move forward with 5G alone, said Baker Botts Partner Michael Perry, if the company’s current shares do not reflect the wireless market’s competitive reality.

Moreover, the current presidential administration has not been aggressive as it would like with antitrust enforcement, Perry added. It would be unwise for the federal defendants to take a partisan stance against the state AGs, since state antitrust enforcers may have different political interests.

It would be a big loss for states, Roush said, if the court makes it appear that the White House is influencing its decision. It may cause states without a predominant Democratic population, such as Texas, to pull out of the trial and have unforeseen complications on the national wireless market.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Antitrust

‘Time is Now’ for Separate Big Tech Regulatory Agency, Public Interest Group Says

‘We need to recognize that absolutely the time is now. It is neither too soon nor too late.’

Published

on

Photo of Harold Feld, senior vice president at Public Knowledge

WASHINGTON, June 21, 2022 – Public Knowledge, non-profit public interest group, further advocated Thursday support for the Digital Platform Commission Act introduced in the Senate in May that would create a new federal agency designed to regulate digital platforms on an ongoing basis.

“We need to recognize that absolutely the time is now. It is neither too soon nor too late,” said Harold Feld, senior vice president at Public Knowledge.

The DPCA, introduced by Senator Michael Bennet, D-CO., and Representative Peter Welch, D-VT., would, if adopted, create a new federal agency designed to “provide comprehensive, sector-specific regulation of digital platforms to protect consumers, promote competition, and defend the public interest.”

The independent body would conduct hearings, research and investigations all while promoting competition and establishing rules with appropriate penalties.

Public Knowledge primarily focuses on competition in the digital marketplace. It champions for open internet and has openly advocated for antitrust legislation that would limit Big Tech action in favor of fair competition in the digital marketspace.

Feld published a book in 2019 titled, “The Case for the Digital Platform Act: Breakups, Starfish Problems and Tech Regulation.” In it, Feld explains the need for a separate government agency to regulate digital platforms.

Digital regulation is new but has rapidly become critical to the economy, continued Feld. As such, it is necessary for the government to create a completely new agency in order to provide the proper oversight.

In the past, Congress empowered independent bodies with effective tools and expert teams when it lacked expertise to oversee complex sectors of the economy but there is no such body for digital platforms, said Feld.

“The reality is that [Congress] can’t keep up,” said Welch. This comes at a time when antitrust action continues to pile up in Congress, sparking debate across all sides of the issue.

Continue Reading

Antitrust

FTC Commissioner Concerned About Antitrust Impact on Already Rising Consumer Prices

Noah Phillips said Tuesday he wants the commission to think about the impact of antitrust rules on rising prices.

Published

on

Screenshot of Federal Trade Commissioner Noah Phillips

WASHINGTON, May 17, 2022 – Rising inflation should be a primary concern for the Federal Trade Commission when considering antitrust regulations on Big Tech, said Commissioner Noah Phillips Tuesday.

When considering laws, “the important thing is what impact it has on the consumer,” said Phillips. “We need to continue to guard like a hawk against conduct and against laws that have the effect of raising prices for consumers.”

Current record highs in the inflation rate, which means money is becoming less valuable as products become more expensive, has meant Washington must become sensitive to further price increases that could come out of such antitrust legislation, the commissioner said.

Phillips did not comment on how such movies would mean higher prices, but that signals, such as theHouse Judiciary Committee’s antitrust report two years ago, that reign in Big Tech companies and bring back enforcement of laws could mean higher prices. He raised concerns that recent policies are prohibiting competition rather than facilitating it.

This follows recent concerns that the American Innovation and Choice Online Act, currently awaiting Senate floor consideration, will inhibit America’s global competitiveness by weakening major American companies, thus impairing the American economy. That legislation would prohibit platform owners from giving preference to their products against third-party products.

This act is one of many currently under consideration at Congress, including Ending Platform Monopolies Act and Platform Competition and Opportunity Act.

Small businesses have worried that by enacting some legislation targeting Big Tech, they would be impacted because they rely on such platforms for success.

Continue Reading

Antitrust

Critics and Supporters Trade Views on American Innovation and Choice Online Act

American Innovation and Choice Online Act is intended to protect fair competition among businesses, but panelists differed on its impact.

Published

on

Photo of Amy Klobuchar from August 2019 by Gage Skidmore used with permission

WASHINGTON, May 10, 2022 – Experts differed on the effect that antitrust legislation targeting big tech companies allegedly engaging in discriminatory behavior would have on small businesses.

Small businesses “want Congress not to do anything that will screw up or weaken the services that they rely on for their business,” said Michael Petricone, senior vice present of the Consumer Technology Association, at a Protocol Live event on Thursday.

Petricone said that antitrust bill would encourage tech companies to relocate to other countries, harming the American economy. He said small businesses would be affected the most.

Instead, Petricone called for  a “smarter immigration policy” to allow foreign innovators access to American tech market, as well as the defeat of the antitrust legislation.

But other said that small businesses suffer from predatory behavior by big tech companies. “Companies can’t get their foot in the door when there is already self-preferencing,” said Awesta Sarkash, representative for Small Business Majority, an advocacy organization, adding that 80% of small businesses say they want antitrust laws to protect them.

Self-preferencing on online platforms is detrimental to the success of small businesses who rely on social media advertising for business, she said. The new antitrust proposals would ensure an level playing field and promote fair competition, she said.

The American Innovation and Choice Online Act would prohibit certain online platforms from unfairly preferencing products, limiting another business’ ability to operate on a platform, or discriminating against competing products and services.

The bill sponsored by Sen. Amy Klobuchar, D-Minn, was introduced to the Senate on May 2 and is awaiting Senate floor consideration.

The debate follows concerns raised by both democrats and republicans about America’s global competitiveness as the bill would weaken major American companies.

If passed, the bill will follow the European Union’s Digital Services Act which similarly sets accountability standards for online platforms, preventing potentially harmful content and behavior.

Continue Reading

Recent

Signup for Broadband Breakfast

Get twice-weekly Breakfast Media news alerts.
* = required field

Trending