Why An Army of Small Companies is Defending the Sprint/T-Mobile Merger

In Aug it was reported that T-Mobile was asking the small operators that resell T-Mobile's excess network capacity (Mobile Virtual Network Operators (MVNOs)) to write letters and opinion pieces in support of the company's proposed $36 billion merger with Sprint. By helpfully suggesting talking points to resellers —including Mint Mobile, Republic Wireless, and Ting, all of which lease access from the Big Four network operators (Verizon, AT&T, Sprint, and T-Mobile) in order to sell phone and data services to customers, T-Mobile is following the usual "air of inevitability" merger playbook.

Price-aware consumers are in for a particularly rough ride if the merger goes through. A new T-Mobile would control more than 45 percent of all wholesale connections, which means MVNOs will have very little leverage in negotiating their arrangements. T-Mobile has not promised to allow MVNOs to continue using its towers and wires following the merger, and no law obligates T-Mobile to do so; a new T-Mobile would be an equal player in a cozy trio with Verizon and AT&T, with the incentive and ability to eliminate low-price plans and MVNOs altogether, becoming much more like gold-plated Verizon and AT&T in its practices.

The tens of millions of value-oriented wireless customers don't have much of a voice at the Federal Communications Commission these days. T-Mobile has nothing to fear from them. But T-Mobile knows that MVNOs can write letters. And the MVNOs know they cannot take the risk of alienating T-Mobile. If the merger does go through, they'll be at T-Mobile's mercy. So some have apparently decided that they might as well send a wooden letter into the FCC parroting the arguments T-Mobile is pushing in support of the deal, even though there is no universe in which fewer choices for resale equal a better business environment for them. 

[Susan Crawford is a professor at Harvard Law School]