Collapse of Sprint/T-Mobile Talks Seen as Likely Good Development for Pai Agenda
T-Mobile and Sprint pulling the plug on a potential combination (see 1711060068) is likely good for FCC Chairman Ajit Pai, since work on approval would have taken over a big part of the wireless agenda for months to come, former and other industry officials said Tuesday. It means the FCC won’t have decide immediately whether four major national wireless carriers are necessary for wireless competition. AT&T’s proposed buy of T-Mobile in 2011 dominated wireless discussions for months before the would-be buyer pulled out.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
Transactions “take a ton of time to process and that one would have had a lot of attention with a highly uncertain outcome,” said a former FCC spectrum official. “The wireless industry is highly competitive right now, and Chairman Pai must appreciate that and this allows him to continue to pursue a less regulatory path.” A Communications Daily Special Report being published soon after this report focuses on Pai's deregulatory agenda (see 1711070021 and 1711050001).
BTIG analyst Walter Piecyk agrees that Sprint and T-Mobile not moving forward is helpful to the rest of Pai’s agenda. Piecyk said in a note to investors Tuesday that BTIG is raising the price targets on two of the three major tower players -- American Tower and SBA Communications -- in light of that and other developments. Sprint indicated it plans to increase its capital investment to $5 billion-$6 billion from $3.5 billion, Piecyk wrote. “AT&T is about to begin its long anticipated deployment of multiple spectrum bands across its markets. Verizon’s dwindling spectrum position and slow moving small cell strategy are likely to increase pressure to re-accelerate investment in macro towers.” Meanwhile, he said, T-Mobile “continues to push on low-band deployment as its market strategy broadens and has shown a willingness to pay for early access to spectrum it recently bought in the incentive auction.”
Most FCC chairmen have “a list of big picture policy-oriented legacy items they want to be remembered for,” said Francisco Montero, Fletcher Heald communications lawyer. “For Pai, I imagine they will be media ownership, deregulation, response to the hurricane disasters and roll back of Title II net neutrality regulation. But mergers are always a thorn.”
“T-Mobile/Sprint being off the table certainly forestalls a contentious, bandwidth-draining proceeding,” agreed Doug Brake, senior policy analyst at the Information Technology and Innovation Foundation. "It definitely leaves more room for other policy initiatives.” Work on the deal likely wouldn’t have slowed Pai’s agenda, said Fred Campbell, director at Tech Knowledge. The death of the transaction means Pai can pursue unimpeded all other items on his agenda, said Roger Entner, analyst at Recon Analytics.