(Photo by Justin Sullivan/Getty Images)
T-Mobile’s much-desired merger with Sprint is stalled for the moment, with the FCC’s “shot clock” stopped at 122 days of its 180-day merger review. The company clearly hasn’t won regulators over, seeing as how it needed to give the FCC a booster shot in the form of “additional information regarding their claims related to fixed wireless services.”
Today, T-Mobile rolled out the consumer version of the information it gave to the FCC: a pledge that it will “disrupt home broadband” with a new $50/month, unlimited, LTE-based service for rural customers. But the company itself makes clear that it doesn’t intend to offer any sort of widely available service, to any sort of real audience, unless the government gives it permission to swallow its rival. That’s what this is really about.
“With our current network, the LTE pilot can only support up to 50,000 households (less than 0.04 percent of US households), but with the scale and capacity of the New T-Mobile, we would cover more than half of US households with 5G broadband service in excess of 100Mbps by 2024!” the carrier crows.
That brings T-Mobile’s promise well beyond politically influential rural areas into being a home internet competitor for the hungry suburban masses—if we let it eat Sprint.
We Need Better Broadband Choices
Home internet in the US tends to have two linked problems: competition and price. Most home internet usage is streaming video nowadays, and that pretty much demands unlimited data at 10Mbps or higher. DSL is too slow, and satellite doesn’t have the capacity (for now), so that leaves cable, fiber, and 5G.
T-Mobile points out through this very limited trial that 4G doesn’t really have the capacity either. Some rural users can get online with AT&T’s rural fixed wireless product at $50/month for 215GB, and Verizon has a $65 unlimited hotspot plan. But those only work in places where the networks are already relatively uncrowded.
Google tried to install competitive fiber and has mostly given up. Some cities and towns want to install their own broadband networks, the way Chattanooga has done, but they’re often banned by corporate-friendly state legislators. Where most people actually live, we’ll probably need 5G to offer competition.
Legere and Sprint’s Marcelo Claure on Capitol Hill (Photo by Chip Somodevilla/Getty Images)
T-Mobile claims that most US consumers pay around $80/month for broadband service. It’s less where there’s competition; Verizon charges $50/month for 100Gbps service where Fios competes with cable, and Google Fiber charges the same in its few cities. AT&T’s rural broadband, at $50 for 215GB, definitely undercuts Hughesnet’s price of $129.99 for 50GB of high-speed data.
So the prospect of nationwide, $50/month, 100Mbps wireless home broadband is a great carrot. It’s something Americans want, and something that would make their lives better. T-Mobile is promising a good thing.
The challenge now becomes simply: can you trust a big, public company to make a promise, get a huge benefit, and then fulfill its promise? Or will it turn around and conveniently forget as soon as it gets what it wants?
I’m admittedly burned by my experience with Verizon Fios, which signed a contract with the city of New York in 2008 to deliver fiber to all city residents by 2014. I did get it, but not until 2018, after the city sued Verizon. The service is great! I begged for it for five years. Verizon just wouldn’t get it to me. T-Mobile’s promise just feels too big to trust.
Can You Believe T-Mobile?
T-Mobile’s general response is to tell us to look at its record, and to say that John Legere won’t lead us astray. Legere has been a great CEO, but a merger isn’t just for Christmas, and Legere will eventually move on.
T-Mobile is a large, public company subject to the markets, and the markets are about turning the screws on consumers to extract the greatest profit, not about offering the best service at the lowest cost. Competition is the brake.
Legere has a maverick mentality. But the company’s next CEO could well decide, just as Google has, that offering inexpensive and widespread home broadband is just too heavy a lift to take on. That would leave us with one less wireless carrier and no more broadband options.
If T-Mobile is serious about this, I’d love to see it take on a binding contract for this promise, with penalties in the billions; something that would really hurt. Set some dates. If T-Mobile fails to deliver broadband to X people by Y date at Z price, investors get hit in the solar plexus.
But I doubt that any shareholder would be willing to commit to that lack of flexibility. This isn’t about T-Mobile, individually; it’s about the markets. Any public company would be glad to reap benefits now, as long as it has the freedom to betray customers in the future.
If you want to express your own opinion to the FCC about this merger, click on the “Express” link on the left-hand side of the FCC’s web page here.
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