By Henry Waxman
June 27, 2018 at 5:00 am ET
For anyone who likes to see consumers win in the American marketplace, it’s been exciting to watch T-Mobile’s rise over the last five years. CEO John Legere and his team have transformed T-Mobile, once an afterthought in the wireless market, into a powerful force for change in an industry in need of disruption.
T-Mobile achieved this by doing something novel: putting customers first. T-Mobile was the first carrier to go all in on unlimited-data plans, and they did away with two-year wireless contracts, among other pro-consumer innovations. Although T-Mobile is much smaller than the two giants in this area, its aggressive consumer-first approach put pressure on AT&T and Verizon to offer similar packages, bringing down prices and helping more Americans gain access to reliable phone service and mobile internet. The New T-Mobile will be no different.
This week, Legere will be on Capitol Hill to meet with Senate Judiciary policymakers to discuss why consumers should welcome the recent news that T-Mobile and Sprint have agreed to merge. Legere will make the case that their combined resources and relentless, consumer-centric leadership will allow the New T-Mobile to drive pro-consumer innovation on an even larger scale.
I have been a life-long champion of protecting consumers. When I served as a U.S. representative and chairman of the House Energy & Commerce Committee, I pursued policies — like mandatory nutrition labels, cigarette warnings, and an ability for generic drugs to compete—that sought to create a better, safer environment for American consumers. These values have led me to oppose concentrations of power in the past, especially if such actions would lead to less competition, higher prices, or lower quality products. And it was this point of view that led me to argue for spectrum to be set aside in a recent auction so that competitors to AT&T and Verizon could purchase bandwidth even though they were smaller and less wealthy.
While critics cry out that the merger will reduce the number of carriers from four to three, the data shows the combination will allow the New T-Mobile to better compete for customers and deliver significant coverage improvements — changes that will benefit consumers across the country.
For starters, together Sprint and T-Mobile can compete more effectively than they could on their own. With a larger T-Mobile, Legere can even more aggressively put downward pressure on prices and force the competition to improve quality of service, which could result in as much as a 55 percent drop in per GB price and a 120 percent increase in wireless data supply by 2024 compared to the world without the combination.
Next, the merger will expand T-Mobile’s reach. Many people in communities across America must choose between AT&T and Verizon — if they have any real choice at all. In fact, the Federal Communications Commission reports that nearly 10 million rural Americans lack access to at least three LTE providers. The New T-Mobile will be better positioned to compete in these markets, particularly in rural America. The combined company expects to be able to deliver high-speed, in-home broadband service to approximately 52 million rural residents, more than 84 percent of all rural residents.
Lastly, Sprint and T-Mobile have complementary spectrum portfolios that, together, will enable faster deployment of a nationwide 5G network. In fact, following the merger, the New T-Mobile will be positioned to invest nearly $40 billion to deliver the world’s first true nationwide 5G network and bring the company into the 5G future. By 2024, the new company will have around 2X the capacity and approximately 4-6X times the speed than either company could offer on their own.
We’ve long heard about the potential 5G has to move America forward on a variety of vital issues: the opportunity to enable connected devices in the coming “internet of things”; allowing autonomous vehicles and smart cities to monitor and regulate the flow of traffic, reducing greenhouse gas emissions; and even facilitating advancements in healthcare through telemedicine and wearable devices. These are innovations that could come sooner rather than later from this merger by increasing competition among the carriers to make 5G a reality.
With disruption in its DNA and a history of prioritizing customers, there is no other company I’d rather see setting the standards and the pace for innovation on this critical priority.
Henry A. Waxman, who served as chairman and ranking member of the House Energy and Commerce Committee while in his role as U.S. representative for California’s 33rd District from 1975 to 2015, currently serves as the chairman of Waxman Strategies and as an adviser to T-Mobile.
Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Updated submission guidelines can be found here.