Why the Sprint/T-Mobile Merger Makes Sense for America
It is very rare to find much bipartisanship in Washington, D.C., these days. The rules of engagement right now appear to be if one side is for something, the knee-jerk reaction by the other side is to immediately come out against it, no matter the merits of the idea or policy being proposed.
So when congressional Democrats, Republicans -- and the Trump White House -- agree on something, it’s worth taking note. That is precisely what is taking place right now regarding the potential Sprint/T-Mobile merger. For those who haven’t been following the issue, it would appear to be dry subject matter. But once you understand the implications of the United States and China moving pieces around on the chessboard over who will control global 5G networks, the stakes are enormous.
According to Fox Business, the administration has signaled support for the merger. Why? Because it would create another formidable competitor to countries, especially China, in the battle over the 5G networks. Citing national security concerns and the healthy impact of marketplace competition, policymakers as divergent as Silicon Valley Democratic Rep. Anna Eshoo and Newt Gingrich have come out in support.
There are many reasons why the merger should happen: Sprint and T-Mobile are seeking to form a third major competitor to Verizon and AT&T. Verizon and AT&T don’t want a third competitor in the 5G battle as they have for all intents and purposes been acting as a duopoly. Adding a third competitor to the mix upsets the balance of power and will likely lead to great competitive pricing. Progressives have come out strongly against it, reflexively asserting that the merger will somehow, in defiance of the laws of competition, raise prices. The Communications Workers Association union, a significant donor to the Democratic Party, is claiming that somehow this will result in major job losses. As the Washington Free Beacon pointed out, CWA has not always been opposed to massive telecommunication mergers. “It threw its full support behind the proposed merger of AT&T and Time Warner,” the Free Beacon noted. Not so coincidentally, this happened around the time CWA and AT&T signed a regional labor contract requiring CWA to support the company’s legislative agenda. What a coincidence that the CWA would oppose a merger that would lead to great competition for AT&T.
A Sprint/T-Mobile merger would make it the first nationwide 5G carrier, absolutely leading to greater competition, igniting an arms race of innovation and deployment that will benefit consumers, not only with lower costs, but with greater reach on a shorter timeline. It will also help the United States in the fight with China over the 5G networks: The issue of control cannot be understated when one considers the implications of the 5G networks on the Internet of Things, which could see over 20 billion smart devices in the next few years, and sets the standards and decides who controls the data and how it’s being used.
On top of all of those reasons, one of the biggest conversations taking place in regard to deploying 5G networks is how deep the deployment can go into rural America. There are massive benefits to rural America having 5G networks, from farming to new openings for remote jobs. For personal reasons, I’m rooting for greater competition to accelerate deep rural deployment because I live in the countryside of Loudoun County, Virginia. Cellphone coverage isn’t the greatest there. Somehow, the farm was hardwired with high-speed internet by a previous owner, which allows me to make calls with wi-fi, but I often wonder how I live in one of the wealthiest counties in America and can’t get decent cellphone coverage.
One of T-Mobile’s major pledges regarding this merger is to take 5G networks into rural areas: The company has publicly pledged, if the merger were to take place, to provide coverage for 96 percent of rural America by 2024. Rural interconnectivity is not only a big issue for the Trump administration, it is key to expanding economic opportunity to overlooked areas. While 5G won’t be replacing broadband or fiber anytime soon, 5G deployment can come sooner and reach more rural areas faster than fiber. The beauty of it is that 5G can offer the same speeds as most internet providers: 5G networks will, in a perfect scenario, allow for 500 megabytes-per-second download speed. For comparison, the average internet download speed in the U.S. just a few years ago was only 6.5 megabytes-per-second.
When you realize that, by the FCC’s own estimates, about 40 percent of rural America lacks broadband and that 5G could be an integral part of the solution for rural interconnectivity, this isn’t a hard decision. Having a third major player in this sector would accelerate the timeline on everything. This week the House Judiciary Committee will hold a hearing on the merger. Sometime soon, the Department of Justice and the FCC will make a decision. For the sake of competition, for the sake of the consumer, for greater innovation, and for the sake of helping America beat out China to become the world leader in 5G, this merger should be approved.