Union, Public Interest Groups Blast T-Mobile-UScellular Deal

T-Mobile's acquisition of wireless assets from UScellular would further increase anticompetitive practices and put labor at a greater disadvantage, Communications Workers of America (CWA) said Tuesday.

The prominent labor union filed a petition to deny with the FCC Tuesday, arguing that T-Mobile's already "dominant position in many local labor markets" will expand following its $4.4 billion acquisition. T-Mobile's proposed acquisition, announced May 28, would buy essentially all of UScellular's wireless operations, including spectrum licenses, customers and stores. UScellular would retain cell towers and some spectrum. T-Mobile would reportedly require some 30% of UScellular spectrum.

CWA's Petition Against T-Mobile Deal

The CWA in its 35-page filing argues that T-Mobile's 2020 acquisition of Sprint had already entrenched the provider's power in labor markets and weakened the bargaining power of retail wireless store employees.

"The T-Mobile/Sprint merger has worsened terms across downstream consumer and upstream labor markets and follows a longer trend toward concentration in the industry," the filing said, "... The merger review of T-Mobile/Sprint was flawed because it failed to examine potential job losses and wage suppression, which led to 'worsened terms.' Failing to find oligopsony power does not mean workers will escape the harms of merging parties' anticompetitive practices. Rather, the outcomes since have demonstrated a discrepancy from antitrust enforcers’ expectations. Ultimately, the merger resulted in a highly concentrated wireless sector that is squeezing consumers, workers, and small businesses."

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CWA president Claude Cummings Jr. said T-Mobile made "false promises about job creation and preserving competition" when it bought Sprint.

"Instead, the company cut jobs, suppressed wages, and left workers afraid to speak out. Now, T-Mobile wants to continue its takeover of the industry by purchasing UScellular,” Cummings said. “We have seen what mergers of this scale can mean for workers if they can’t protect themselves through union representation, and it’s not good. It’s up to regulators to require strong, enforceable conditions to ensure that workers and consumers don’t take a back seat to corporate profits. If not, we will see an industry-wide race to the bottom.”

Additional Petitions: Deal Against Public Interest

Four consumer and public interest groups on Monday filed their own petition to deny with the FCC: Public Knowledge, Open Technology Institute at New America, Benton Institute for Broadband & Society, Access Humboldt, and Institute For Local Self-Reliance. Their 21-page filing describes the T-Mobile-UScellular deal as "anticompetitive and contrary to the public interest." The groups argue that T-Mobile bears a burden of proof to show that its acquisition will create "verifiable, transaction-specific public interest benefits." They argue that the exit of the fifth largest U.S. wireless in UScellular will negatively impact consumers.

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"In these locations where UScellular does have a presence, its pricing structure adds competition to the wireless market nationwide, as nationwide carriers must compete with UScellular while maintaining a priority to have the same pricing across the country," the groups wrote in the filing. "In the markets of several states, UScellular competes with the top three wireless providers and has an impact on the prices that these larger providers set nationwide. A transaction of this magnitude, which completely wipes out a smaller, competitive market participant does not serve the public interest, as competition will be harmed on local and national levels. Because it harms the public interest, this application should be denied."

Other petitioners include the Rural Wireless Association and EchoStar.

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T-Mobile: Prices Will Lower

The "un-carrier" in its latest earnings call argued that the deal will lead to lower prices and better coverage for customers.

"This is a transaction that very clearly will result in both lower prices and a better network. Both T-Mobile and UScellular customers will have a better network experience," CEO Mike Sievert said. "There's no question about that. And UScellular customers will be offered lower prices as they migrate to the T-Mobile plans. And that's just a classic win-win. So we're very confident, but we have to keep our heads down and go through the process and explain our case to all the parties involved."