DISH can’t and won’t be a competitor in California’s mobile marketplace, T-Mobile/Sprint merger opponents say

24 December 2019 by Steve Blum
, , , ,

Dish kangaroos ces 5jan2015

T-Mobile wants to set up DISH as a new mobile network competitor, to ease anti-trust problems with its proposed merger with Sprint. The California Public Utilities Commission has to decide whether or not that’s a credible ambition. Initial briefs in what should be the closing round of arguments in the CPUC’s merger review were filed on Friday (links below). With DISH declining to say much on its own behalf, T-Mobile (and Sprint, but it’s the junior partner in this game) had to to make the case.

Opponents took their shots, too.

The Communications Workers of America, California’s principal telecoms union, said in its brief that DISH can’t be trusted to keep hard commitments, let alone vague ones…

DISH has a long history of speculative warehousing of spectrum and failing to meet FCC-imposed deadlines. As T-Mobile commented in a March 2019 letter to the FCC, “DISH stands out for its efforts to game the regulatory system” and “has little interest in actually delivering real 5G service“…In fact, DISH has failed to put any of its extensive spectrum holdings to use. Now, DISH seeks approval from the FCC to further extend its construction deadlines to 2025 (16 years after its initial spectrum acquisition). With this track record, “the Commission should view with enormous skepticism the DISH commitments to build a facilities-based wireless network”…

DISH has also misused a government program designed to incentivize wireless competition via new entrants and independent small businesses…In a hearing before the Senate Appropriations Subcommittee on Financial Services and General Government, then-FCC Commissioner Ajit Pai stated that DISH had made “a mockery of the small business program.”

Even if DISH finds the billions of dollars it needs and builds a nationwide 5G network, it must rapidly gain enough customers to be a competitive force in the market. The CPUC’s public advocates office argued that would be an impossible task – “whacky”, according to T-Mobile…

The only customers available to DISH would come from industry-wide wireless market growth, currently below 5% annually, and from customer churn from other established MNOs and MVNOs. During cross examination, T-Mobile’s Chief Technology Officer Neville Ray himself expressed doubt as to DISH’s ability to capture anything close to the 41.8 million customers currently being served by Sprint. When it was suggested that DISH might acquire 40-million customers over a two year period, Ray testified that “there hasn’t been that much wireless [growth] throughout the industry in any given year for the last decade.” Ray dismissed the notion of growth of that magnitude as “whacky hypotheticals.”

Although time is getting tighter, the CPUC’s inquiry is still on a schedule that could lead to a decision in February. It won’t take much, though, to bump that to March or later.

Briefs regarding the T-Mobile/Sprint merger, filed at the CPUC on 20 December 2019

T-Mobile and Sprint, aka “joint applicants”
California Emerging Technology Fund

CPUC public advocates office
Communications Workers of America
TURN and Greenlining Institute, aka “joint consumers”

Links to the stack of arguments and exhibits everyone has filed are here.

My clients include California cities who do business with T-Mobile. I like to think that has no bearing on my commentary. Take it for what it’s worth.