When T-Mobile acquired Sprint in April of 2020, it brought our major wireless carrier choices from four down to three. Recognizing that this would indeed be a bad thing for US wireless customers (aka all of us), T-Mobile agreed to a set of conditions with the FCC’s blessing that would theoretically position Dish Network to fill the Sprint-shaped hole in our wireless landscape.
In other words, one wireless competitor was allowed to reduce competition only if it agreed to help set up another competitor in its place. Sounds a little suspect, right? Surely a deal like that would include a lot of conditions, requirements, and oversight to make sure it would actually work.
But looking back, these were the major requirements imposed on T-Mobile to prop up Dish as a competitor:
- Sell Sprint’s prepaid business, including Boost Mobile, to Dish within 120 days after the close of the merger, and maintain Boost’s competitiveness before the divestiture
- Provide Dish’s wireless customers with access to the T-Mobile network for at least six years through a wholesale MVNO agreement while Dish builds its own network
- Provide transition services for up to three years afterward to ensure Boost customers are transferred smoothly
- Not do anything anticompetitive toward Boost, like throttling or limiting access to new network technologies
- Sell Sprint’s 800 MHz spectrum to Dish three years after the closing of the merger
- Give Dish the option to acquire old Sprint cell sites and retail stores that T-Mobile opts to decommission
- Provide Dish with reasonable advance notice of network transition plans that could affect Boost customers
What’s missing there is any definition of success. The burden for the success of the plan lay on Dish’s shoulders, not T-Mobile’s, with Dish being the one legally required to cover 70 percent of the US population with 5G by 2023 (or now possibly 2025).
Here we are roughly a year later and so far, T-Mobile appears to have technically done everything it said it would do for Dish by now. But is the scheme to prop up our fourth wireless carrier working? It sure doesn’t seem so. The fact that Dish has now fled into the arms of AT&T shows how insufficient T-Mobile’s support has been: instead of relying on the partner mandated by the $26 billion mega merger, Dish now has to spend $5 billion on a competitor to get where it wants to go. While not the final proof, it’s the latest reminder that the deal was built on a shaky premise to start with, and regulators largely took it on faith that big corporations would keep their promises.
From the beginning critics of the merger deal suggested that it depended too much on T-Mobile and Dish doing the right thing, and was so vague that it left the door open for funny business that could seriously hamper the effort to prop up Dish. The new T-Mobile wasted little time breaking its promise of being “jobs-positive from day one” and it didn’t take long after the Boost sale for it to mess with Dish, too. In October of 2020, T-Mobile told Dish it would be shutting down Sprint’s old CDMA network — which many of Dish’s Boost customers rely on — on January 1st, 2022.
T-Mobile says it went above and beyond its obligations set out in the merger deal, and that may be technically true: regulators only required six months’ notice, and the company gave 14. T-Mobile’s filings with the FCC related to the merger don’t state exactly when it anticipated shutting down the CDMA network, just that it wouldn’t do so before January 1st, 2021. But T-Mobile also publicly promised it would “ensure continued and seamless operation of Boost Mobile […] following transition to Dish’s ownership,” and yet its CDMA shutdown is on an even more aggressive timeline than rivals AT&T and Verizon.
Getting the word out to customers that they’ll need to buy a new device and acquiring enough phones for them takes time. AT&T started notifying its customers of its February 2022 3G shutdown in July of last year, and as Dish has pointed out repeatedly, Verizon has delayed closing down its CDMA network by several years to give itself enough time to migrate customers still using 3G phones. In a recent letter to the FCC, Dish also pointed to other statements T-Mobile made that led it to believe that it would have a three-year period to migrate customers off the old network. T-Mobile’s response to the partner it was supposed to prop up? It more or less says that Dish wasn’t paying close enough attention.
Giving Dish a bit more than a year’s notice of a major service upheaval for many of its new customers is, to use the technical term, bullshit. (We’re not even counting the global health crisis and the chip shortage which might have made this task harder.) And while T-Mobile may be right when it claims to have played by the rules, it certainly qualifies as funny business.
Clearly, the deal didn’t require enough from T-Mobile, and relied too heavily on then-CEO John Legere and Dish’s Charlie Ergen seeming like pretty cool guys to the judge, Victor Marrero. Putting the onus on Dish to pay up if it missed its 2025 deadline predictably did nothing to encourage T-Mobile to play nice and help Dish along. Unless Dish can pull off something incredible, it looks like we’ll be living without that fourth major wireless carrier for a long time to come.
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July 22, 2021 at 05:00PM
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T-Mobile’s merger promises weren’t enough to make a carrier out of Dish - The Verge
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