The FCC appears to be widening its lens as it considers the market impact of the proposed merger of Sprint and T-Mobile, according to Wells Fargo analysts.
This week the agency sent out information requests to major cable operators including Charter, Altice USA, and Comcast, seeking details about their mobile services, as well as how the T-Mobile-Sprint deal could affect their businesses.
Comcast and Charter both offer mobile service, branded Xfinity Mobile and Spectrum Mobile, respectively, which operate through MVNO agreements with Verizon. Comcast launched its wireless offering in May 2017 and Charter rolled out service across its national footprint early last month. Altice USA, meanwhile, struck a deal with Sprint last year to launch its own wireless offering using the carrier’s network.
Specifically, the FCC is requesting documents showing:
- characteristics of customers and the mobile wireless service providers customers could have switched from previously
- engineering of the company’s cable wireless networks
- revenues, costs and profitability of the wireless service
- negotiations and financials terms of any MVNO agreements with a wireless company
- all plans to develop a facilities-based mobile wireless network or acquire spectrum or to use spectrum already acquired for mobile wireless service
- any actual or potential impacts of other cable wireless service on the company’s business in general
The document shows the FCC also wants recipients to “describe in detail” how the proposed $26 billion deal could impact their mobile wireless and TV or internet business.
“This offers evidence that the FCC is at least somewhat considering the fact that the New TMUS will directly compete with home broadband and that the wireless business should be looked at through a wider lens,” Wells Fargo Senior Analyst Jennifer Fritzsche wrote in a Friday research note.
In September, T-Mobile told the FCC the combined company would compete aggressively with cable companies in wireless broadband and video. T-Mobile had said the new company would be able to deliver wireless speeds of more than 100 Mbps to 90 percent of the U.S. population by 2024 and expects to provide broadband internet to 9.5 million subscribers, potentially making it the fourth largest internet service provider in the country.
Fritzsche indicated that the FCC has typically looked at the market “as it stands” when the merger application is filed, but could now be considering a wider view.
“Based on these actions we believe the FCC is going to great lengths to get a sense of what the market will look like longer term,” Fritzsche wrote. “While we still expect spectrum divestures will have to be made, we see this development as a positive for the TMUS / S transaction.”
The FCC also sent information requests to AT&T, Verizon, U.S Cellular, C-Spire, and TracFone.
The Commission is asking for the companies’ responses by Oct. 17 and 18.