C Spire and T-Mobile have been duking it out in dueling letters to the FCC concerning T-Mobile rural plans which, according to T-Mobile, are contingent on its planned merger with Sprint being approved by regulators.
T-Mobile Rural Plans
T-Mobile has said it would broadly expand fixed wireless service to rural areas if it obtains Sprint’s vast spectrum holdings. But C Spire and the Rural Wireless Association questioned the viability of those plans in a letter to the FCC, expressing concern about whether T-Mobile would have sufficient high-speed backhaul capacity to support those plans.
T-Mobile responded earlier this month with its own letter to the FCC, in which the company cited information about the backhaul facilities that support its current rural deployments. As is customary in cases like this involving competitive information, some details were redacted, but the gist of it was that some rural cellsites have fiber connectivity and some sites use “temporary circuits and satellite connections to transport backhaul, while awaiting contracted fiber build-out.”
The company also said it has future-proofed its backhaul with “scalable/upgradable solutions and contractual arrangements already in place.”
That response wasn’t good enough for C Spire, which fired off a follow-up letter this week.
“The point that C Spire made earlier in opposition to the merger is that there is nothing about the proposed transaction that changes the challenging economics of doing a green field build in rural areas where the availability and cost of backhaul present severe limitations,” said C Spire in the letter. T-Mobile “failed to address this obvious shortcoming” and the company’s reference to future-proofing is too vague, the letter states.
What Will Regulators Think?
I think C Spire could have a tough time convincing regulators to block the T-Mobile/ Sprint merger on that basis, as it seems like one company’s word against the other’s. And regulators are likely to take C Spire’s arguments with a proverbial grain of salt, considering that C Spire provides wireless and wireline broadband in rural areas, where the company would face a strengthened competitor if the merger were to be approved.
Nevertheless, C Spire makes another argument that I think has a lot of validity.
The letter notes that T-Mobile has failed to commit to build out any particular rural area and that’s an important point at a time when government and industry are trying to determine the broadband speed currently available to every residence in the country with the goal of ensuring that broadband is available to everyone.
Whenever mergers of major service providers are approved, they usually come with conditions. And if nothing else, perhaps regulators will keep C Spire’s concerns about the vagueness of T-Mobile rural plans in mind as they consider any conditions they might impost on the merger. For example, perhaps they might require T-Mobile to make fixed wireless available to a certain number of locations that can’t already get internet service at a certain speed
Haven’t we learned by now that the only way to make a company accountable for its promises is to make those promises measurable?