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Ex-FCC commissioner advises T-Mobile, Sprint on $26 billion merger

Democrat Mignon Clyburn says a combined company would bring affordable 5G to underserved communities. Also, T-Mobile's CEO tells the FCC he'll keep rates low.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
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FCC Commissioner Mignon Clyburn (left) served at the agency for nearly nine years before stepping down in June 2018. 

Alex Wong / Getty Images

Former FCC Commissioner Mignon Clyburn is working to help T-Mobile and Sprint get their $26 billion merger approved by regulators.

Clyburn, a Democrat, confirmed she's working as a paid consultant to the carriers to advise them on their impending merger. The news of her involvement was first reported by Politico on Monday.

The companies, whose merger was announced in April last year, need approval from the Federal Communications Commission and the US Department of Justice.

"Affordable broadband access is a critical priority particularly for those Americans who are underserved or currently have no viable options at all," she said in an interview with CNET. "I am advising T-Mobile and Sprint as they seek to accelerate the creation of an inclusive nationwide 5G network on how best to build a bridge across the digital divide that currently exists in our country."

Clyburn served on the FCC from August 2009 until June 2018. She was originally appointed under President Barack Obama and served as interim chairman of the agency for half the year in 2013. Clyburn was considered a champion of several consumer causes, including reforming prison inmate calling services and pushing to modernize and protect the FCC's Lifeline program, which subsidizes the cost of phone and broadband service for poor and disabled Americans. She also advocated for enhanced accessibility in communications for the disability community. And Clyburn was a strong supporter of the 2015 net neutrality protections adopted when her party was in control of the FCC.

It's not uncommon for former FCC commissioners and others serving in government to work for companies they once regulated. Former FCC Commissioner Robert McDowell, a Republican, also consults for T-Mobile. He published an op-ed in Fortune in May extolling the benefits of the merger.  But  Clyburn's involvement in advising the merger is interesting because she was part of the majority on the FCC in 2011 that rejected the merger between AT&T and T-Mobile, concluding that a reduction in the number of national carriers would harm consumers.  When the idea of a merger between T-Mobile and Sprint was first floated in 2014, the Democratic-controlled FCC also signaled it wouldn't approve the deal for the same reason.

Critics of the deal, including many public interest groups that have long considered Clyburn a friend, oppose the merger, because they say more consolidation in the wireless market is bad for consumers. Specifically, they say the deal will lead to fewer choices and higher prices for consumers and reduce the incentive for these companies to continue to compete aggressively on price. They also point to the competitive pricing and promotions both T-Mobile and Sprint have offered in the market, which have pressured AT&T and Verizon to lower prices and ditch contracts. And they argue that if the deal were to be approved those competitive pressures would go away.

"The proposed combination of T-Mobile and Sprint is a clear-cut horizontal merger that will dramatically curtail competition in the wireless market and harm consumers," Phillip Berenbroick, senior policy counsel at Public Knowledge, said in August when the group filed a petition with the FCC to deny the deal. "By nearly any measure, today's wireless marketplace is already excessively consolidated … Without independent T-Mobile and Sprint challenging Verizon Wireless and AT&T, and each other, consumers are unlikely to continue to reap the benefits they have accrued from four-firm competition."

Executives for the companies say they will not raise rates on consumers. In a letter to the FCC on Monday, T-Mobile CEO John Legere made a personal pledge to regulators that the "New T-Mobile" would not raise prices on its service following the merger. Doing so, he said, would erode the relationship with T-Mobile customers. 

"I want to reiterate, unequivocally, that New T-Mobile rates are NOT going to go up," he said. "Rather, our merger will ensure that American consumers will pay less and get more ... My management team and I can make this personal commitment because we believe in delivering on our promises, and we know if we do not, we will lose credibility and the trust of our customers."

The companies say the deal will lead to faster and wider deployment of 5G, the next generation of wireless technology that will not only increase speeds, but also improve the responsiveness of the network. The new technology is expected to pave the way for a slew of new services like streaming VR and self-driving cars.

They've argued they need the scale of a larger, combined company because 5G infrastructure will be very expensive to build, particularly in hard-to-reach areas like rural communities or underserved poor areas.

Legere and Sprint Executive Chairman Marcelo told the Senate Judiciary Committee in June that the deal is necessary to ensure US dominance in 5G. The two executives will be on Capitol Hill again later this month defending the merger in front of a joint hearing before two House committees, as the intensity over the regulatory review of the deal heats up. 

Still, Clyburn said she's not abandoning the ideas she fought to protect when she was a public servant. She serves as a board member of the Benton Foundation, a public interest group pushing for equity and diversity in communications policy. Clyburn was also recently appointed by Rep. Frank Pallone, chair of the House Commerce Committee, to serve on the board of the National Security Commission for Artificial Intelligence.

"I bring certain sensitivities and passions that I believe are natural extensions of this public-private partnership that I have been a part of for 19 years that is so clearly expressed in our nation's universal service principles," she said.

Clyburn, who was the first African-American woman to serve on the FCC and was also the first woman to chair the agency, was included in CNET's first list of notable women in tech to celebrate International Women's Day last year.  

First published Feb. 4, 11:14 a.m. PT.
Update, 3:42 p.m. PT: Added T-Mobile's commitment to the FCC that it won't raise rates.

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