With Dish Network owner EchoStar selling $23 billion in valuable spectrum to AT&T, any pretense that the TV provider will become a serious wireless competitor is dead. But the project was always doomed to fail, and despite plenty of assurances by the Trump administration and other companies involved, the very obvious writing was always on the wall.
Back in 2020, the first Trump administration rubber-stamped T-Mobile’s $26 billion merger with Sprint. There were endless warnings from unions, economists, and consumer groups that the consolidation would harm US wireless competition, resulting in layoffs, worse service, and higher prices — warnings that quickly came true.
More than 9,000 T-Mobile employees lost their jobs, the wireless sector stopped seriously competing on price, and T-Mobile increasingly began to behave exactly like the competitors it once promised to disrupt.
The first Trump administration approved the deal without even reading the proposal. Trump’s “antitrust enforcer” at the Department of Justice at the time, Makan Delrahim, was criticized for using his free time and personal devices to help the companies gain approval. T-Mobile also found itself under fire for ramping up patronage of Trump hotels to try and seal the deal. (It’s the kind of pay-to-play arrangements that have become decidedly uglier during Trump’s second term.
To downplay the harm from the T-Mobile deal, Trump officials worked with Dish and T-Mobile to construct a complicated plan they claimed would counter the harms of consolidation. Under the proposal, Dish would acquire Boost Mobile from Sprint — and valuable spectrum from T-Mobile — to cobble together a fourth wireless competitor and restore balance to the US wireless market.
The plan was destined for failure. US regulators, with a history of coddling telecoms, never really seemed capable of the kind of competent oversight required to nanny the build to fruition. The two remaining US wireless industry giants, AT&T and Verizon, were heavily incentivized to lobby the government to ensure added competition never materialized.
Dish Network also had very little experience in wireless, which became obvious when The Verge found Dish’s 5G network to be a disappointing mess with limited phone support, patchy coverage, middling connectivity speeds, and a janky website and sign up process.
As part of the deal, Dish struck an agreement with the Federal Communications Commission (FCC) that the new network would reach 75 percent of the country using its valuable spectrum assets. And while the company met some early deadlines, it didn’t take long for Dish to start missing debt interest payments, forcing the FCC to grant extensions to prevent the plan from becoming an embarrassment.
With growing talk of a potential bankruptcy, Dish managed to buy itself a little time by orchestrating an all-stock merger with EchoStar in 2023, a deal the companies insisted would create “a global leader in terrestrial and non-terrestrial wireless connectivity.”
But with hints that Dish’s wireless ambitions were already circling the drain, the remaining wireless giants (and Space X) began hungrily eyeing the company’s valuable spectrum assets. Last May, the FCC, led by Brendan Carr, announced it was launching an investigation into Dish and EchoStar’s compliance with FCC 5G buildout requirements.
Carr’s threats to pull EchoStar’s spectrum licenses (less than a year after the company had negotiated an extension with the previous administration) annoyed unions, consumer groups, and “free market” Conservative groups alike, albeit for different reasons.
EchoStar’s sale of $23 billion in Dish spectrum licenses to AT&T this week appears to be the direct result of direct pressure by Trump officials. The arrangement demolishes Dish’s ambition to become a fourth wireless carrier, empowers AT&T as a dominant carrier, and ends any hopes that the US can fix the competitive harm caused by the merger of Sprint and T-Mobile.
The deal is a windfall for Dish and EchoStar, which acquired the spectrum in question for $13.5 billion. EchoStar saw its stock value jump 70 percent on the news and is likely to use the proceeds to fund its low Earth orbit satellite constellation.
Dish’s wireless ambitions may stumble forth headless for a while, but analysts indicate the company still has an estimated $30 billion in additional spectrum assets that are also likely to be steadily carved up and sold to the nation’s biggest suitors.
”More spectrum sales will surely follow, and if today’s transaction is any indication, those, too, could fetch more than we had imagined,” Moffett Nathanson analyst Craig Moffett predicted in an investor research note.
Unfortunately, the Dish gambit only really functioned as a way for Dish Network to string regulators along while its costly spectrum assets appreciated, while also providing industry-friendly regulators a convoluted and costly distraction from the harms caused by their rubber-stamping of further harmful telecom consolidation.
One 2024 study by telecom analysis firm Rewheel found that the T-Mobile and Sprint merger effectively put an end to wireless price competition in the United States.
“Five years on, the Sprint T-Mobile 4-to-3 mobile merger made the U.S. one of the most expensive mobile markets in the world,” the Finland-based research firm stated. “While monthly prices were falling and continue to fall across mobile markets…after the merger prices in the U.S. either stopped falling altogether or fell at a much slower rate.”
Meanwhile, T-Mobile, which once heralded as a pro-consumer disruptor in US wireless, increasingly looks exactly like Verizon and AT&T – two companies that former trash-talking CEO John Legere used to mercilessly ridicule. Promises by T-Mobile that the Sprint merger would be a huge job creator instead resulted in more than 9,000 layoffs.
This was all repeatedly predicted by economists, analysts, and consumer groups. Those warnings were ignored, repeatedly, by government officials across multiple administrations. The end result is a costly, embarrassing, completely avoidable mess.
The Trump administration’s second term has already featured no limit of additional telecom merger approvals, which will likely result in mass layoffs and worse, less affordable service. Combined with the administration’s relentless quest to defang federal corporate oversight and consumer protection, consumers are likely to be paying the price for decades to come.
0 Comments
