Making a case that joint-bidding suppresses competition, Federal Communications Commission Chairman Tom Wheeler asked the four other commissioners to join him in barring the practice.
“If two of the largest companies are able to bid as one combined entity in the auction, their combined resources may have the effect of suppressing meaningful competition,” Roger Sherman, the FCC’s wireless bureau chief, said in a blog post today.
Billionaire Masayoshi Son, whose SoftBank Corp. gained control of Sprint last year, has been trying to sway skeptical regulators to allow a takeover of T-Mobile. Regulators have warned that such a combination may hurt consumers because it would reduce the number of nationwide carriers to three from four. Today’s potential change in auction rules by the FCC cuts across some of the same issues and concerns about competition.
The two wireless-service providers had already been working to form a venture for an auction next year of airwaves surrendered by television stations, people familiar with the plans said last month.
By pooling resources the companies would be able to pay more to the federal government, demonstrating that a full merger would help them make bigger investments in their networks.
“You’re not going to allow them to merge without a hearing and merger analysis,” Moffett said. “So the idea that they said they would bid jointly and that the FCC would say that’s OK was improbable from day one.”
While the companies have agreed on the broad outlines of a merger in which Sprint would buy T-Mobile for about $32 billion, the agreement isn’t likely to be announced until August, people familiar with the matter have said. The companies, including T-Mobile parent Deutsche Telekom AG, expect it would take the FCC and the Justice Department at least a year to evaluate the deal.
Complicating matters is a rival bid announced yesterday by Iliad SA, the French mobile-phone carrier founded by billionaire Xavier Niel. Its offering $15 billion in cash for a 56.6 percent controlling stake in T-Mobile US.
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