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Consider that, today, AT&T and Verizon control 80 percent of the industry earnings, have 70 percent of the wireless customers in the U.S., own licenses for over 80 percent of the ultra-efficient low band spectrum, and own the networks supplying most of the landline connections to the towers used by all other wireless carriers. Note that AT&T and Verizon did not reach their tremendous size by beating their competition; they did so by buying their competition during an era of unfettered acquisitions and near-total regulatory disinterest. The several “Baby Bell” descendants of the original AT&T spent a decade reconstituting themselves into the “Twin Bells,” while also acquiring various smaller operators. That era of consolidation is why we now have a wireless duopoly. Without market-based competition from a third comparably-sized wireless carrier, heavy-handed, public utility-style regulation is the only option for promoting competition in the industry. Since that solution is generally regarded as politically untenable, a merger of Sprint and T-Mobile provides the best option to inject competition into the wireless industry.
Congressional Democrats still must reconcile their support for such a transaction with the Justice Department’s stated opposition and the FCC’s less-than-lukewarm interest, but the FCC is an independent agency that may be convinced of the public interest benefits such a transaction would deliver, and the Justice Department, when presented with an actual transaction to evaluate, could easily determine that their preconceptions about the industry and their fears about such a merger are unfounded.
If the wireless industry is to be competitive and deliver the benefits of competition to the consumer, Sprint and T-Mobile must be allowed to merge and then must work with the nation’s smaller competitive carriers to create both the scale and combined footprint of a third national wireless carrier. Then, and only then, will we have a counterbalance to the wireless Twin Bells, and true competition for the U.S. wireless consumer.
Hu Meena is president & CEO of C Spire.