Rep. Eshoo flips, now favors merger of Sprint-T, Mobile

Rep. Anna Eshoo, D-Palo Alto. Post file photo.
Rep. Anna Eshoo, D-Palo Alto. Post file photo.

BY ALLISON LEVITSKY
Daily Post Staff Writer

Palo Alto Congresswoman Anna Eshoo appears to have flipped her position on big telecommunications mergers, giving a glowing endorsement of a plan to merge T-Mobile and Sprint, the nation’s third- and fourth-largest wireless carriers.

Telecom companies gave Eshoo $49,600 last year and $75,500 in 2017. Over the years, the 26-year congresswoman has pulled in $572,461 from the industry, more than all but 10 other members of the House and Senate.

At a Feb. 13 hearing of the House Commerce Subcommittee on Communications and Technology, Eshoo said she wanted to use her time not to ask questions about the merger, but to make a statement.

In 2011, Eshoo said she supported the Justice Department’s decision to block the merger of AT&T and T-Mobile and that the move reflected her own views of the “need for true competition and value to consumers.”

Then, at last week’s hearing, Eshoo said her support of those two free-market values — competition and value to consumers — were the reasons to support a merger of T-Mobile and Sprint. Verizon and AT&T control two-thirds of the market, and have done so for the last 15 years, Eshoo said.

“This is hardly a competitive, dynamic market that we have. For all intents and purposes, we have a duopoly in the country,” Eshoo said. “In reality, I think the merger will increase the new company’s network capacity eightfold.”

Eshoo said that Sprint and T-Mobile had fought “tooth and nail” to adopt pro-consumer policies, but both companies are missing a crucial ingredient to become “heavyweight competitors” in the market.

T-Mobile needs Sprint’s midband spectrum, and Sprint is carrying a $40 billion debt and can’t make the investments necessary to compete with Verizon and AT&T.

Eshoo said she disagrees that consolidating the market from four carriers to three would increase prices and hurt consumers.

She noted that she wishes T-Mo-bile’s workers were unionized.

“I wish they were, but they’re not, but I think that competition and the protection of consumers is front and center in this,” Eshoo said.

9 Comments

  1. I don’t get the logic that fewer players would mean more competition. I think it would be the opposite, more companies means more choices for consumers, ergo more competition.

    • Sprint can only invest 3-4 Billion dollars as does T Mobile. Meanwhile AT&T is investing 25 Billion and Verizon about 17Billion this year. So you call this fair? Nobody can compete again the “Big 2” (AT&T and Verizon). Come on now… This merger is needed or we will be down to 3 regardless when Sprint goes Bankrupt.

  2. She gets it. When two companies bring in 93% of the wireless revenue in this country, that is not true competition. You need another carrier with the scale and spectrum to challenge them.

  3. The answer isn’t to allow two companies to merge. Her response should be to break up AT&T and Verizon into several smaller companies. Instead of three players, how about 10? In the early 80s, you may Eshoo’s predecessors (people like Tim Wirth and Bob Packwood) successfully split Ma Bell into several regional carriers. With several phone companies, rates fell. With a separate company to sell equipment, and no requirement that it come from Ma Bell, the cost of a phone dropped. MCI was allowed to compete with AT&T in the longlines business. Breaking AT&T up lowered consumer costs and opened the door to the explosion in wireless technology. Today, the idea of allowing four carriers to become three is a step in the opposite direction. We should push for 10 or more companies. More competitors means lower rates. Ms. Eshoo, you remember Tim Wirth. What do you think he would say?

  4. Sprint can only invest 3-4 Billion dollars as does T Mobile. Meanwhile AT&T is investing 25 Billion and Verizon about 17Billion this year. So you call this fair? Nobody can compete again the “Big 2” (AT&T and Verizon). Come on now… This merger is needed or we will be down to 3 regardless when Sprint goes Bankrupt.

  5. You can’t break up the companies… Investment in cellular network is very costly. This isn’t wireline, (Oh which by the way AT&T and Verizon own most of for backhaul (underground fiber) to the towers)… We have a Duopoly situation and have for years. Better to have 3 strong players rather than 2 giants and 1 weakling and 1 on a near deathbed.

  6. Readers should know that seven Democratic senators (four of whom have announced their candidacies for president in 2020)and independent senator Bernie Sanders (who has also announce a presidential run) have jointly sent letters to the FCC and the Justice Department, that also has jurisdiction in merger cases, urging them to reject the proposed merger. In their letter, the Senators argue that the merger would be a “sharp blow to competition in the telecommunications industry” and would “eliminate competition that has been shown to benefit consumers and stifle the emergence of new carriers” (see https://thehill.com/policy/technology/429618-dem-senators-urge-fcc-justice-department-to-reject-t-mobile-sprint-merger and https://thehill.com/policy/technology/428619-t-mobile-sprint-step-up-merger-push). Eshoo’s position in this can be best explained by the mountain of money she has received in career contributions from telecommunications corporations. (This parallels her even more fervent work in protecting the pricing power of drug companies who have made her the fourth biggest career recipient of drug company contributions after Barack Obama, Hillary Clinton and Orin Hatch. See https://www.sanjoseinside.com/2019/01/10/op-ed-rep-anna-eshoo-needs-to-answer-for-ties-to-big-pharma/)

  7. Need the ‘Badass’ unnetworkers to keep VZW/ATT in line. Otherwise, they eat Sprint then Tmo that can’t persist alone. Can only suspect VZW/ATT $s as why Bernie & other Dems don’t get it.

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