• Earlier this week, T-Mobile US told the US regulator it was ditching its diversity, equity and inclusion (DEI) policies
• The FCC then gave the green light for the acquisition of US fibre broadband operator Metronet by T-Mobile US and private equity firm KKR
• In addition, the US Department of Justice approved the $4.4bn acquisition of USCellular assets by T-Mobile US

Ditching its diversity, equity and inclusion (DEI) policies appears to have done wonders for the M&A ambitions of T-Mobile US, which received positive deal-making news this week from US telecom regulator the Federal Communications Commission (FCC) and the US Department of Justice (DoJ)’s antitrust division. 

The end result will be the further consolidation of market power in the top three US telcos, AT&T, T-Mobile US and Verizon: In addition, one of the deals highlights an extraordinary chapter in fixed broadband market consolidation that also includes two of the country’s major cable broadband players.  

So, what has happened? As we previously reported, T-Mobile US wrote to the FCC to note it is ending its DEI policies “not just in name, but in substance”, a move that will have pleased the anti-DEI Trump administration. 

Within hours, the FCC’s Wireline Competition Bureau gave its blessing to the planned acquisition of fibre broadband network operator Metronet, which currently reaches more than 3 million homes and businesses with its high-speed fibre lines, through the formation of a joint venture by T-Mobile US and private equity firm KKR. T-Mobile US plans to invest $4.9bn for a 50% stake in the new venture. Metronet is already active, or has licences to operate, in Arizona, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Mexico, North Carolina, Ohio, Oklahoma, Texas, Virginia and Wisconsin, and plans to reach 6.5 million premises by 2030. 

The FCC found that the deal doesn’t pose any potential “public interest harms” as the T-Mobile US/KKR joint venture plans to continue running Metronet as it is and without “any disruption of service, or change in customer service offerings, rates, terms or conditions.” The FCC also noted that as Metronet will continue its operations (albeit under new ownership), T-Mobile US and KKR argued that the acquisition doesn’t remove an existing player from the market and “therefore does not pose any threat of anticompetitive effects in connections with any telecommunications service.” Overall, the FCC decided that the deal won’t impact services and will “have no adverse effect on competition.”

While that might be the case, the deal is part of a significant ‘new ownership’ trend in the US fixed broadband networks and services sector: Verizon, having dumped its DEI policies, received the green light to acquire broadband service provider Frontier Communications for $20bn; AT&T, which is currently holding firm on its HR policies, is awaiting regulatory approval for its planned $5.75bn acquisition of Lumen’s fibre access assets; and cable companies Charter Communications and Cox Communications have agreed to merge in a $34.5bn deal that will create a company that reaches almost 70 million US households and boasts 35.9 million broadband connections, 14.4 million video service connections and 10.6 million mobile customers – see M&A megadeals reshape US comms sector.

Soon after the FCC gave the OK for the Metronet deal, the DoJ’s antitrust division announced it will not oppose T-Mobile US’s planned acquisition of most of USCellular’s assets in a $4.4bn deal that was first announced in May 2024.

Assistant Attorney General Gail Slater of the Justice Department’s Antitrust Division issued the following statement today in connection with the closing of the Department’s investigation into the proposed acquisition of UScellular by T-Mobile:

“After a thorough investigation, the Antitrust Division determined prudentially not to seek an injunction to prevent T-Mobile from closing on its proposed acquisition of UScellular,” noted assistant Attorney General Gail Slater of the DoJ’s antitrust division in this announcement. 

However, Slater also raised concerns about “competition in the relevant markets for mobile wireless services and the availability of wireless spectrum needed to fuel competition and entry.” 

Ultimately, Slater decided the deal’s pros outweighed its cons. “UScellular’s inability to maintain its competitive position would result in declining value to its subscriber base, whereas the transaction offers them hope that they will be able to experience the benefits of a more robust cellular network,” noted the DoJ. 

And Slater issued a warning for the industry. “More broadly, the department’s investigation made clear that we stand at a pivotal moment for the wireless industry. The transaction comes near the tail end of a decades-long trend toward consolidation by acquisition that has now left most consumers with meaningful choices among just the ‘big three’ national carriers… [which together] account for more than 90% of the roughly 335 million mobile subscriptions in the United States.” 

The deal will also leave the three market giants with yet more spectrum – 80% of it, in fact. While the DoJ doesn’t feel like the impact of the USCellular deal will “result in sufficient harm to competition to warrant an enforcement action… the risks to future competition due to further spectrum aggregation by the big three are acute,” as the trio of AT&T, T-Mobile US and Verizon will become financially stronger and even better placed to “outbid independent rivals for spectrum at future auctions,” concluded the DoJ. 

- Ray Le Maistre, Editorial Director, TelecomTV