Home / Innovative / The merger of T-Mobile and Sprint should be stopped according to cartel experts

The merger of T-Mobile and Sprint should be stopped according to cartel experts

T-Mobile's and Sprint's blockbuster lineup was approved by the Department of Justice in July, along with a series of complicated conditions designed to make Dish Network a national mobile operator. Instead of blocking the merger and maintaining all four major mobile operators, the government is essentially trying to establish a fourth Sprint replacement by having T-Mobile operate a new Dish Network mobile service for seven years while Dish builds its own network that will eventually compete with T-Mobile. If Dish does not build this network by 2023, it will have to pay a $ 2.2 billion fine.

If that sounds like a complicated scheme that makes no sense, you're not alone. A group of seven economists and cartel experts said in a new file that the court should reject the solution proposed by the DOJ and called it "fate [ed] … to failure" and "a means that does not conform to the standard of restoring the Competition matches. " Currently being deployed by Sprint. "

Over the next seven years, anyone buying a Dish service will only get a new T-Mobile service, and that's no real competition. In addition, it is not certain that Dish will ever build its own network, and even if so, it is far from certain that the network will not reach as many people as Sprint.

The submission seeks to convince the court to suspend the approval of the Ministry of Justice's merger before it enters into force. Technically, the DOJ has filed a legal complaint to block the merger, and at the same time the comparison with the deal with T-Mobile and Dish. This comparison must still be recognized by the Federal Court as a non-profit. If the court is not satisfied that the business is restoring competition, it may be rejected and T-Mobile may fall back to # 1.

Hal Singer, an economist at Georgetown University and one of the newspaper's authors, says he believes there is a strong case for blocking the deal. "What's remarkable about this case is that the DOJ complaint has no negative impact on the competition," says Singer. "This puts a huge burden on the DOJ's settlement" to prove that the complex requirements of T-Mobile and Dish actually preserve the competition.

The submission, which is remarkably readable for a legal argument of a group of scientists, states that betting on Dish is fundamentally wishful thinking. Dish "would try what no company has ever done – build and operate a nationwide wireless network, at a cost of at least $ 10 billion, from scratch and in a few years."

And Singer just does not do it I do not think that's going to happen because the business logic just is not there. "Any sensible company in Dish's position would milk the easy access agreement earlier, pay penalties for disassembling, and then return the spectrum to an established carrier before the massive investment costs for expansion are incurred," he says.

Since Dish has broken promises in the past to build a network with the spectrum it already has, chances are good. The DOJ's plan works even worse, say the authors. "This significant venture surpasses what Dish has previously promised the regulators, but has not always managed it," they write. "The DOJ's ambition to create a new competitor in these circumstances carries a risk that will surely cause it to fail."

"The DOJ has adopted a consent decree with Sprint / T-Mobile, which states Dish – a company with no history or presence in the industry – will attempt to compete as a non-network MVNO reseller for the foreseeable future, and may acquire and develop assets that are sufficient to become a full-fledged wireless service provider in the foreseeable future, "the authors write. "But for this to happen, Dish relies on T-Mobile's vague and untrustworthy promises to oppose its economic incentives."

To solve the problem, T-Mobile needs to support its own new competitor. The agreement includes a long list of things that T-Mobile needs to do, including specific traffic management requirements, operational support, and three-year billing and customer support direct competitors. "

The government traditionally prefers" structural "solutions to solve problems or simply to divest assets and businesses without further control, while the DOJ's plan is a" behavioral "tool that Dish tries to explain and T-Mobile how to do business under the supervision of regulators. And that creates a lot of opportunities for fun business, say the authors. "The extreme dependency of Dish on the merits of New T-Mobile offers numerous opportunities for … strategic pricing, slowing down the deployment, changing conditions or quality of assets and services," the authors write.

The authors also point out that Dish does not necessarily need to build a nationwide network for graduation – the goal for graduation is 70 percent of the population not 70 percent of the country. "It's clear that certain parts of the country will be losing," the authors write. [Dish can] Cover 50 percent of the population by targeting only 15 percent of urban areas in the US. Although Dish achieves that goal of 70 percent, the resulting network is unlikely to fully replace Sprint's nationwide network and leave nearly 100 million Americans behind with a less facility-based carrier. "

The filing, along with other commentary on the proposed merger, is due filed with the DOJ, which then publishes it and presents it to the court, there is no time yet plan when the court will make a decision, but the government needs to respond – and figure out how to prove it's less complicated to get T-Mobile to help Dish Network build a network than anyone else leave to buy sprint. 19659017]
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