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Could the T-Mobile-Sprint merger still fall through? Companies’ behavior says: Yes.

by Resurgent Insider Read Profile arrow_right_alt

For months now, DC-based consultants working to push through the T-Mobile-Sprint merger have been loudly boasting to anyone questioning the viability of the deal that they have a plan to ensure it goes through no matter what, and are executing against that plan perfectly.

But in recent days, those claims have been thrown into doubt with news that Democratic Attorneys General could shut the merger down, regardless of the Department of Justice (DOJ) and Federal Communications Commission’s (FCC) views on the matter.

The news has causedresearchers at MoffettNathanson analysts to downgrade the chances the merger will win approval to 33 percent from 50 percent, just within the last week.

But just as interestingly, if you look at recent moves undertaken by T-Mobile, which is leading the public affairs charge with regard to the merger (Sprint is taking the back seat, and going along for the ride), the companies’ own lack of confidence about the merger’s path to success becomes easily visible.

Former FCC Commissioner, T-Mobile-Sprint merger advocate and daughter of Rep. Jim Clyburn Mignon Clyburn, coincidentally wearing a T-Mobile pink dress.

This week, T-Mobile has been pushing a statementfrom the California Emerging Technology Fund—and an accompanying tweet—purporting to speak to the “public benefit” of the merger. That appears aimed at countering concerns from progressives—a particularly dominant force in California, one state whose Attorney General is expected to challenge the deal—that the merger would somehow prove to be “anti-consumer.”

In winter, it became apparent that merger proponents had brought on board former FCC Commissioner Mignon Clyburn to advocate for the merger. 

Politico Influence reported months back that Clyburn had been “tapped” “as a paid adviser to [T-Mobile’s] $26 billion deal with Sprint,” though should would not “lobby” for it. 

One T-Mobile consultant tweeted out a picture and quote from Clyburn speaking at an early March Georgetown Law School event in support of the merger. 

Clyburn also authored thisstrongly pro-merger op-ed at influential California politics site CAL Matters.

Clyburn opposed AT&T ‘s failed attempt to merge with T-Mobile in 2011 on grounds that it wouldn’t serve the public interest. It’s hard to completely avoid thinking that might have something to do with money changing hands as opposed to sheer philosophical and market considerations.

Clyburn’s involvement in advocating for the merger ultimately looks like a calculated, and somewhat cynical move to shift the allegiances of minority voters, and minority Democratic Representatives perceived to speak for them in a fairly rote and typical Beltway blueprint fashion—something that is probably politically necessary in order for the merger to go through.

Clyburn is the daughter of Rep. Jim Clyburn (D-SC), the House Majority Whip and third-ranking Democrat in the House. The elder Clyburn is also an influential member of the Congressional Black Caucus (CBC). 

Whether fair or not, in DC telecoms consulting circles, the CBC and associated groups have long been seen as an easy group of Democrats to pick off in support of telecoms policy that their party by and large is inclined to oppose. Opponents of net neutrality back in the 2000s and early 2010s made outreach to the CBC and minority Democratic groups a focus of their strategy to make it politically untenable for President Obama’s FCC to institute net neutrality regulations. 

When push came to shove, of course, Clyburn voted for those regulations as an FCC Commissioner anyway. Still, a lot of money was spent trying to bring African-American liberals on board with telecom companies’ position on the matter, and attempting to influence the CBC through measures that look a lot like what T-Mobile is doing now by engaging the younger Clyburn. 

Of note, in 2017, Mignon Clyburn apparently votedagainst an FCC report that determined there was sufficient competition in the mobile wireless market. That raises the question of why she thinks there is sufficient competition now or why there would be in the wake of T-Mobile and Sprint merging. This is just one reason why T-Mobile’s moves hint at lingering concerns on the part of both companies that the merger will tank—and there are other reasons why African-Americans in particular could prove unenthusiastic despite perceived moves to win them over.

Not only are African-American women basically Democrats’ most reliable voters now—and Democrats are making anti-trust and competition a key plank of the party platform—T-Mobile has been perceived as trying overly hard and overly overtly to align itself with  PresidentTrump, who is not exactly loved by African-Americans. 

T-Mobile dropped $195,000 at the Trump International Hotel in Washington, DC, something perceived by liberals as an effort to “buy” the approval of President Trump’s DOJ and FCC, and  cuddle up to Trump. 

And for Sprint’s part, only about 12 percent of African-Americans nationwide apparently had accessto the company’s high-speed broadband network as of 2014, compared to about 70 percent of Whites. Then there’s Sprint’s 2016 “ghetto” ad which landed the company in the crosshairs for alleged racism, and which hasn’t exactly been forgotten yet.

All in all, it’s not as pretty a picture for T-Mobile or Sprint as what either company’s consultants would have you believe—and it’s clear that T-Mobile had reasons to worry about the merger’s pathway from the outset and, despite protestations to the contrary, planned in a way that indicates that they were indeed worried it wasn’t a slam dunk.

The question now is, will the merger actually tank, or will moves like bringing on Clyburn be enough to satisfy detractors who could otherwise shut it down? Outreach to minority groups over broadband access and net neutrality weren’t enough to stop Obama’s FCC from instituting a favored netroots policy—which is what antitrust, competition and merger-blocking amount to now. It’s far from clear that T-Mobile and Sprint have a guaranteed win here, or that anyone working in tech policy should assume that they do.


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