In a letter responding to Congressional inquiry, T-Mobile has confirmed that the company dramatically ramped up its patronage of Trump’s hotel in DC as it sought regulatory approval of its $ 26 billion merger with Sprint. A copy of the letter, obtained by the Washington Post, makes it clear that the company spent upwards of $ 195,000 at the property since it originally announced the telecom industry’s latest megadeal last April. That was a dramatic shift from the period of time before the deal was announced:
“T-Mobile’s patronage of President Trump’s Washington hotel increased sharply after the announcement of its merger with its Sprint last April, with executives spending about $ 195,000 at the property since then, the company told congressional Democrats in a letter last month. Before news of the megadeal between rival companies broke on April 29, 2018, the company said, only two top officials from T-Mobile had ever stayed at Trump’s hotel, with one overnight stay each in August 2017.
T-Mobile has also hired former Trump ally Corey Lewandowski and former FCC Commissioners Robert McDowell and Mignon Clyburn to “consult” on the deal and grease the wheels of approval. T-Mobile CEO John Legere has consistently tried to play this obvious attempt at pandering to Trump as just unrelated happenstance:
Yet with everything going on right now you have to expect people to think this is shady. It looks like a back door deal even if its above the board and you put that speculation on yourself by staying there. If the CEO of ATT did the same thing you would raise an eyebrow!
— Kiefer Wall (@roleplayinguy) January 16, 2019
Amusingly, Legere built his entire brand on being a “no bullshit” alternative to AT&T and Verizon. Yet here we are.
As Legere has attempted to sell the press, public, and regulators on the deal, he’s adopted many of his competitors’ worst habits. It’s been clearly documented in countries like Canada or Ireland that when you reduce the total number of major wireless competitors from four to three, it results in dramatically higher rates as the incentive to compete on price is proportionally reduced. Such telecom mergers almost always result in significant layoffs as redundant positions are eliminated. Wall Street predicts T-Mobile’s merger will be no different, eliminating anywhere between 10,000 and 30,000 jobs.
This is not alien territory. In US telecom, these megadeals almost uniformly make the sector worse, as your wallet can attest. Yet both Sprint and T-Mobile execs have engaged in the same old game of Charlie Brown and Lucy football, breathlessly insisting that this deal will somehow be different. At the same time, execs continue to pretend that kissing Trump’s ass by staying at his DC hotel isn’t an obvious lobbying strategy for the company:
“While we understand that staying at Trump properties might be viewed positively by some and negatively by others, we are confident that the relevant agencies address the questions before them on the merits,” (T-Mobile) wrote.
That makes one of you. The Trump FCC has been a glorified rubber stamp for absolutely every pipe dream telecom lobbyists can cook up, be it killing popular net neutrality rules (something Legere supported) or literally weakening the definition of the word “competitive” to make life easier on the sector’s biggest players. While the DOJ is less certain (though still sounding likely from what I’ve heard), there’s zero doubt that the FCC will rubber stamp this merger, likely piggybacking on T-Mobile’s (false) tailor-made claims that the deal is essential if the United States doesn’t want to “fall behind” in the “race to 5G.”
Once Legere gets done bullshitting his way to merger approval, he’ll have to quickly pivot back again to pretending he’s the “no bullshit” alternative to the other major wireless carriers. But of course as just one of three remaining competitors, history has shown us time and time again how T-Mobile will have less incentive than ever to seriously compete on price, and will, sooner or later, come to resemble AT&T and Verizon in all the wrong ways.
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