T-Mobile CEO John Legere is “salivating” to compete with cable internet providers.
So he said Monday in a hearing of the U.S. House Energy and Commerce Committee over his company’s proposed merger with Sprint.
For months, Legere and Sprint CEO Marcelo Claure have argued that their combined company would accelerate deployment of 5G wireless technology and improve service to rural Americans. They continued to beat those drums Wednesday but Legere also claimed that the merger would increase competition with cable internet providers, signaling the ambitions of the combined company.
“We will bring new competition to Big Cable in two ways,” Legere said in his prepared remarks. “Our 5G network gives us the speed and capacity to offer an affordable in-home high-speed broadband service to millions of American households. And with fiber-like speeds across our mobile network, many T-Mobile customers will be able to ‘cut the cord’ entirely and eliminate a separate broadband charge.”
T-Mobile and Sprint claim that their merger will allow them to better compete with wireless titans ATT and Verizon. But not everyone is convinced that removing a competitor from the market will increase competition.
Carri Bennet, general counsel for the Rural Wireless Association, testified on behalf of small carriers in underserved parts of the country during the hearing.
“This merger is bad for competition, it’s bad for consumers, especially in rural areas who will experience fewer choices, price increases, and substandard service,” she said. “It should be denied.”
The hearing provided an opportunity for lawmakers to ask Legere about reports of his frequent stays at President Donald Trump’s hotel in Washington, D.C. Executives from T-Mobile booked at least 52 nights at the hotel since announcing the merger, according to The Washington Post. But no committee members raised the issue. Instead, the most common concern raised was access to wireless service for rural America.
“Help me quickly understand how this merger specifically incentivizes the proposed new T-Mobile to better serve rural communities and when can my constituents expect to enjoy the wonders of 5G connectivity,” said Rep. Ray Luján of New Mexico.
Legere responded “the rural divide is extremely important to us” and predicted that 90 percent of Americans will have access to high-speed coverage by 2024.
Rep. Peter Welch of Vermont said he was a “skeptic” when it comes to Legere and Claure’s promises to increase rural coverage.
“We do not have good coverage in Vermont and the assertion that both gentlemen are making is that this will be tremendous for rural America,” Welch said.” I’d like to believe that’s true but I have an apprehension that it won’t necessarily occur.”
But the deal’s future is not up to Congress. The Federal Communications Commission and Department of Justice will ultimately decide whether the merger goes through.
In April 2018, T-Mobile and Sprint agreed to merge and create a $146 billion company under the T-Mobile name. If the deal is approved, Legere will remain chief executive of the combined company and its primary headquarters will be in T-Mobile’s hometown, Bellevue, Wash.