EXCLUSIVE: Republican AG Raises Concerns About A Sprint, T-Mobile Merger

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Chris White Tech Reporter
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Texas Attorney General Ken Paxton apparently believes a potential merger between Sprint and T-Mobile could leave his state’s citizens without access to fifth generation mobile service, according to a memo obtained by The Daily Caller News Foundation.

A potential merger between the two giant wireless companies risks creating an even larger divide on 5G development between rural and urban states, Paxton, a Republican, wrote in an April 17 letter to T-Mobile CEO John Legere. His letter was dated a month before Sprint and T-Mobile promised federal regulations that the merged company would deploy 5G to most of the country within three years.

“The divide could be exacerbated by the proposed merger and leave whole communities with inferior, expensive, or nonexistent access to wireless and broadband services,” Paxton noted before adding that a potential merger “could disproportionately affect the Texas economy.”

T-Mobile has a history of not cooperating with rural carriers in Texas, a problem that will worsen if the merger is cleared, he said.

In particular, he noted that reducing the number of major wireless companies from four to two leaves open the possibility that prices will increase as competition dwindles. “This merger would create a new company with a market share rivalling those of the other facilities-based wireless carriers, reducing the number of nationwide competitors to a mere three companies,” Paxton noted.

Chairman of the Federal Communications Commission Ajit Pai speaks at the Conservative Political Action Conference (CPAC) February 23, 2018. REUTERS/Joshua Roberts

His office has not yet responded to TheDCNF’s questions about whether the attorney general’s position has changed after both companies told Federal Communications Commission Chairman Ajit Pai on May 20 that they would cover more than 97% of the country in 5G infrastructure over the next three years. Any potential merger is dependent on the FCC and the Department of Justice’s approval.

The FCC indicated Monday that it reached an agreement in principle with the companies after they agreed to sell Sprint’s prepaid brand Boost Mobile. DOJ’s antitrust division has, meanwhile, recommended the agency block the $26 billion acquisition of smaller rival Sprint, sources told Yahoo Wednesday. (RELATED: Trump Makes A Big Push For 5G As Some Republicans Lobby For Nationalizing Such Technology) 

“Two of the F.C.C.’s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity,” Pai said in a statement Monday. “The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives.”

Concerns about 5G connectivity in rural areas has plagued the Trump administration for months.

Pai announced in April a plan to auction off three big slices of millimeter-wave airwaves that experts believe can provide rural areas’ high-speed internet. The FCC also plans to create a “Rural Digital Opportunity Fund” to spend roughly $20 billion over a decade on rural broadband. The push comes as some Republicans press for a new tactic, one that involves developing such technologies in a way similar to China.

President Donald Trump, for his part, wants telecommunications companies to blow past China success on 5G deployment. “I want 5G, and even 6G, technology in the United States as soon as possible. It is far more powerful, faster, and smarter than the current standard,” Trump told his Twitter followers in February.

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