- The FCC staff rejected calls for conditions on issues including roaming and spectrum aggregation
- The approval comes on the heels of T-Mobile agreeing to trash everything related to diversity, equity and inclusion programs
- The FCC also approved license transfers for T-Mobile to complete its Metronet deal with KKR and for SES to close its acquisition of Intelsat
Here’s one for the wireless history books. UScellular, the largest regional wireless network operator in the U.S, just got the green light from the staff at the Federal Communications Commission (FCC) to get gobbled up by T-Mobile, the country’s second-largest network operator.
T-Mobile announced just over a year ago that it wanted to buy most of UScellular's wireless operations, including its retail stores, about 4 million customers and spectrum, for about $4.3 billion. The spectrum includes 600 MHz, 700 MHz, 2.5 GHz, AWS and PCS holdings. UScellular will keep its 4,400 towers and concentrate on the tower business.
Just a few days before the FCC decision, T-Mobile sent a letter to agency Chairman Brendan Carr spelling out how it’s eliminating anything and everything related to its diversity, equity and inclusion (DEI) programs, a stipulation Carr had made clear was necessary for companies to get their transactions approved by the FCC.
The FCC also approved two other transactions last week. One is the transfer of control of FCC licenses held by Intelsat to SES, smoothing the path for SES to close its $3.1 billion acquisition of Intelsat. The other is the transfer of five Metronet subsidiaries to T-Mobile, allowing T-Mobile to acquire fiber provider Metronet as part of a joint venture with investment firm KKR.
“As part of the FCC’s Build America Agenda, the agency is working to unleash new builds, encourage greater investment, and expand network capacity. The FCC’s decisions this week further all of these goals while cutting across multiple different sectors of the communications market,” Carr said in a statement.
It’s worth noting that the FCC staff made the decision to greenlight the T-Mobile/UScellular deal without a vote by the full commission, which currently consists of two Republicans and one Democrat.
The decision further underscores that Chairman Carr can accomplish much of his agenda without a majority vote by the commission, noted New Street Research analyst Blair Levin in a report for investors today. That is, items move forward as long as President Trump’s priorities are addressed, which in this case meant T-Mobile throwing its DEI programs out the window to please Carr.
“Looking forward, there are some issues where his Republican colleague will matter but for the most part, investors should look to Carr’s views as likely to determine the outcomes,” Levin said.
Specifically, in its 124-page order approving the UScellular deal, the bureau rejected calls for conditions on customer transitions, roaming, employment, Lifeline and handset unlocking, among other things.
RWA angry about roaming
The lack of any conditions on roaming is of particular concern to the Rural Wireless Association (RWA), which was “astonished” by the FCC staff’s “complete rubber stamping” of the deal and failure to place any guardrails on the transaction.
RWA is worried that T-Mobile won’t honor UScellular’s existing roaming agreements with rural carriers, raising questions about the viability of smaller providers that rely on roaming deals.
RWA maintains that UScellular has provided meaningful competition in underserved areas and its exit will leave rural consumers with fewer choices and higher prices.
“The FCC’s decision takes T-Mobile’s promises as gospel without any demand for accountability post-closing,” said Carri Bennet, RWA’s outside general counsel, in a statement. “FCC staff’s failure to impose meaningful safeguards is a dereliction of its duty to protect competition and consumers and safeguard the public interest.”
FCC says no to consolidating deals
Some industry groups, including RWA, wanted the government to expand the scope of the review process to include the spectrum that UScellular is selling to Verizon and AT&T, each of which is buying about $1 billion worth of UScellular spectrum. Those deals were announced after T-Mobile announced in May 2024 that it planned to acquire most of UScellular’s wireless assets and about 30% of its spectrum.
The groups argued that the deals should be consolidated and viewed as one big single transaction because, viewed together, the anticompetitive effects of the transactions are clear and pronounced.
But the FCC didn’t buy that argument. In total, UScellular’s transactions involve five different, unrelated buyers – T-Mobile, AT&T, Verizon, Nsight Spectrum and Nex-Tech Wireless – and contemplate each buyer acquiring different amounts and types of spectrum, implicating different aggregation issues and public interest analyses, the agency said.
“We find that consolidation of the proceedings would not facilitate an efficient resolution of the issues, nor is it necessary to allow for full and thoughtful review of each transaction,” the FCC staff said.
“While it is true that the other UScellular transactions are contingent on the closing of this transaction, such contingency does not suggest that the transactions are more deeply – or improperly – intertwined. Instead, it reflects the simple business reality that UScellular chose not to bind itself to sell the majority of its spectrum to other providers were this transaction – the sale of its wireless business – to fall through,” the agency added.
What about the designated entity stuff?
Loyal Fierce readers might recall the attorneys we wrote about last fall who wanted to see UScellular held accountable for the way in which it used designated entity (DE) programs to acquire spectrum.
Attorneys Mark O’Connor and Sara Leibman argued that UScellular took advantage of the DE program, which was meant for small businesses, and undermined its integrity. Leibman worked as an attorney at the FCC from 1991 through 1995 when the FCC developed rules around DE and other FCC spectrum auction regulations, so she’s well acquainted with the original intentions of the rules.
But the FCC found no reason to further investigate, saying nothing in the attorneys’ petition warrants reevaluation of the qualifications of UScellular or its subsidiaries to hold this spectrum.
Of course, that didn’t sit well with O’Connor and Leibman, who told Fierce that they will continue their efforts in courts and elsewhere to expose the way in which UScellular used DE firms King Street and Advantage to acquire spectrum inappropriately.
“The FCC and the Justice Department conducted their own investigation and acted as our partners in exposing UScellular’s wrongdoing. Now, in its rush to grant the T-Mobile transaction, the FCC has concluded that UScellular’s behavior was not egregious enough to call into question its qualifications to hold spectrum licenses,” they said in a joint statement. “We will continue our efforts to vindicate the taxpayers even if the FCC chooses not to.”