The plaintiffs might not understand that this merger is not about the number of major U.S. carriers left standing; it is about helping the U.S. get a head start on leading the new global 5G economy
California Deputy Attorney General Paula Blizzard said that Dish is an unproven quantity when it comes to the business of selling wireless service. Blizzard called Dish a struggling satellite television company. And speaking with reporters before the trial, California Attorney General Xavier Becerra said, “We have yet to be shown how going from four competitors to three competitors would be good for consumers.” But there is potentially plenty of good for consumers in the form of faster signals that will be available with 5G. The nations that are first to harness the latest generation of wireless connectivity will enjoy an economic boom as new technologies, industries, and corporations are created. While the plaintiffs see this as an antitrust case, for T-Mobile it has been all about obtaining Sprint’s mid-band spectrum so that it can quickly complete a well-rounded 5G network that covers the entire country. For now, Verizon’s 5G rollout is limited to the use of mmWave spectrum. And while the latter has the advantage of delivering faster data speeds and offering huge capacity for data traffic, it just does not travel far enough to allow the carrier to quickly complete a nationwide 5G network. And mmWave signals do not penetrate buildings well. One could make the argument that the merger needs to be allowed so that the U.S. can better compete in the new 5G economy that is in its early days.
During the court session today, the states tried to show that Sprint, which many believe will be out of business if the merger is not approved, simply needs its deep-pocketed parent to lay out some cash. As an example, the plaintiffs called Deutsche Telekom CEO Timotheus Höttges to the stand. Deutsche Telekom is the parent company of T-Mobile and the states tried to show that the German telecom giant simply dug into its pockets to turn T-Mobile into the fastest-growing major carrier in the states. The plaintiff’s attorney, Glenn Pomerantz, was trying to show that if SoftBank were to do the same with Sprint, the latter wouldn’t need a merger to survive. That argument fails for a couple of reasons. One, when AT&T was blocked by the DOJ from buying T-Mobile in 2011, as part of the terms of the busted deal it had to give T-Mobile $3 billion which Höttges called the “real ignition” for T-Mobile’s turnaround. And secondly, much of the credit for T-Mobile’s success goes to its departing CEO John Legere whose unconventional leadership played a big part in the growth of the company.