A day earlier than receiving the go-ahead, T-Cellular US despatched a letter to the FCC promising to finish its DEI insurance policies ‘not simply in identify, however in substance’
The U.S. Division of Justice has cleared T-Cellular US’ $4.4 billion acquisition of UScellular’s wi-fi enterprise, only a day after T-Cellular introduced it was ending its range, fairness and inclusion (DEI) applications.
The antitrust division acknowledged that its overview raised issues about market competitors and spectrum focus, however in the end concluded that the deal’s advantages outweighed the potential hurt. In a press release, Assistant Lawyer Basic Gail Slater famous that UScellular’s lack of ability to take a position at scale had considerably eroded its competitiveness: “UScellular merely couldn’t sustain,” she mentioned, including that “shoppers would profit from a stronger T-Cellular.”
New Road Analysis’s Coverage Advisor Blair Levin echoed this actuality, telling RCR Wi-fi Information that UScellular was not aggressive. “They have been shedding subscribers to the massive three. Their pricing was larger than the massive three — it wanted to be as a result of they lacked scale,” he mentioned, including that the acquisition shouldn’t materially influence underserved or rural communities.
The deal, introduced in Could 2024, consists of most of UScellular’s wi-fi property: prospects, shops and roughly 30% of its spectrum holdings.
“This overview makes clear we stand at a pivotal second for the wi-fi business,” Slater mentioned, pointing to the dominant place of the highest three operators, which now management greater than 90% of the nation’s 335 million cell subscriptions.
Slater additionally acknowledged that ongoing spectrum consolidation among the many Massive Three carriers dangers blocking the emergence of a viable fourth nationwide competitor — one that would convey contemporary innovation and shopper alternative. She pledged that the DOJ would proceed to scrutinize future spectrum offers and “use its enforcement authority” if such transactions threaten to undermine competitors.
However Levin advised RCR that whereas Dish continues to be adamant that it may be profitable as a fourth service “given the chance,” his agency stays skeptical. “The trail to a profitable enterprise is slender and treacherous,” he mentioned. “The almost certainly end result is EchoStar [or Dish] promoting spectrum to the massive three. We acknowledge that the DOJ doesn’t need this end result, however they don’t have jurisdiction over spectrum gross sales. That is the area of the FCC, and the FCC may be very comfy with three nationwide carriers.”
A day earlier than receiving the go-ahead, T-Cellular US despatched a letter to the FCC promising to finish its DEI insurance policies “not simply in identify, however in substance.” It added: “T-Cellular will not have any particular person roles or groups targeted on DEI” and that it’s eradicating “any references to DEI on its web sites and can make sure that firm web sites and future communications would not have any references to DEI.”
The DOJ’s determination follows a rising development: Verizon additionally scrapped its DEI initiatives earlier this yr and obtained the inexperienced mild for a $20 billion acquisition of Frontier Communications shortly after. In the meantime, T-Cellular continues to be looking for approval to individually purchase a 50% stake in fiber supplier Metronet by way of a three way partnership with KKR — a deal that Levin mentioned “does nothing for the corporate strategically.” He continued: “In the event that they decide that they want terrestrial property, they might want to do one thing a lot greater.”
