Sunday, May 24, 2015

FCC gives go-ahead to T-Mobile takeover of MetroPCS

The deal would merge the nation's number-four and number-five carriers.

FCC gives go-ahead to T-Mobile takeover of MetroPCS

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There was never really much doubt, but the Federal Communications Commission today gave the go-ahead for the nation's number-four wireless carrier, T-Mobile, to acquire fifth-place MetroPCS. If approved by shareholders - and a couple of hedge-fund investors in MetroPCS are balking - the newly combined carrier would start with about 42 million subscribers, fewer than half the numbers claimed by both Verizon Wireless and AT&T Mobility.

The FCC, which had to find that the radio-license transfers underlying the deal were in the public interest, acknowledged that it was removing a competitor from the market - a company with special strength in concentrated urban markets such as Philadelphia. But it concluded that competition would be actually be strengthened by the deal - contrary to regulators' conclusions in 2011, when the Justice Department and then the FCC moved to block AT&T from swallowing up T-Mobile.

Since that merger collapsed, T-Mobile has begun a $4 billion upgrade of its nationwide network to the fourth-generation LTE standard used by the most up-to-date smartphones, such as Apple's iPhone 5. Through its innovative "bring-your-own-device" plan, T-Mobile has recently been adding about 100,000 unlocked iPhones to its network a month, and it says it expects to begin selling new Apple devices sometime this year - perhaps timed to Apple's expected rollout of a new iPhone.

In an email statement, FCC Chairman Julius Genachowski praised the consolidation as pro-competitive. “With today’s approval, America’s mobile market continues to strengthen, moving toward robust competition and revitalized competitors," he said.

The FCC's official findings expressed a similar conclusion:

[T]o the extent there may be some possible competitive harms in selected geographic areas, we find that these possible competitive harms are outweighed by certain public interest benefits likely to result from the proposed transaction. Such benefits include the facilitation of Long Term Evolution (“LTE”) deployment, the expansion of the MetroPCS brand into new geographical markets, the development of a more robust, national network, improved quality of service, and the strengthening of the fourth largest nationwide service provider’s ability to compete in the mobile broadband services market. In summary, we find that any potential public interest harms would be outweighed by the resulting public interest benefits and we conclude that, on balance, the transaction is in the public interest.

Let's hope they're right.

Inquirer Business Columnist
About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

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Jeff Gelles Inquirer Business Columnist