T-Mobile Still Pretending That Staying At Trump's DC Hotel Isn't An Obvious Ploy To Gain Merger Approval

from the nothing-to-see-here dept

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:

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.

Filed Under: donald trump, john legere, lobbying, merger, trump hotel, washington dc
Companies: sprint, t-mobile

Trump Hotel Fracas Highlights How T-Mobile's Consumer-Friendly Brand Schtick Is Wearing A Little Thin

from the ill-communication dept

To be clear, T-Mobile initially had an indisputably-positive impact on the wireless sector. The company's decision to eliminate consumer pain points like long-term contracts and early termination fees was quickly mirrored by other carriers thanks to a strange concept known as "competition." And CEO John Legere's relentless attacks on giants like AT&T and Verizon have proven to be immensely entertaining over the years. All told, T-Mobile has built its entire brand on the back of the idea that it was a polar opposite of the type of ethically-dubious giants that have dominated telecom for a generation.

In more recent years the company's "uncarrier" branding schtick has started to look a little worn around the edges. From supporting efforts to kill net neutrality to weirdly attacking the EFF, the company occasionally lets its mask slip, showing it's not all that different from the companies it professes to be better than. This shift has been particularly obvious as the company has tried to sell the press, public, and Trump administration on the company's job and competition killing merger with Sprint (like that time it hired Corey Lewandowski to "consult" despite his comments mocking a kid with Down Syndrome).

As it rushes to consolidate the wireless sector from four to three carriers, T-Mobile's increasingly engaging in behavior it used to mock AT&T and Verizon for. Not least of which being the company's empty promises to police the sale of user location data to dubious third brokers and aggregators, something T-Mobile was perfectly happy to do in lock-step with other carriers.

That brings us to this week's revelations that T-Mobile executives booked 9 rooms at Trump's DC hotel the day after it first announced its Sprint merger ambitions. T-Mobile execs have been regular patrons ever since as they try to sell the government on the latest telecom sector megadeal nobody asked for:

"T-Mobile executives have returned to President Trump’s hotel repeatedly since then, according to eyewitnesses and hotel documents obtained by The Washington Post.

By mid-June, seven weeks after the announcement of the merger, hotel records indicated that one T-Mobile executive was making his 10th visit to the hotel. Legere appears to have made at least four visits to the Trump hotel, walking the lobby in his T-Mobile gear."

The Post had been digging into this story for months. When they recently confronted Legere in the lobby of Trump's hotel he tried to claim his patronage was thanks to the "convenience" and "security" Trump's hotel offered:

"Last week, a Post reporter spotted Legere in the Trump hotel’s lobby. In an impromptu interview, the T-Mobile chief executive said he was not seeking special treatment. He chose the Trump hotel, he said, for its fine service and good security.

"It’s become a place I feel very comfortable,” Legere said. He also praised the hotel’s location, next to one of the departments that must approve the company’s merger. "At the moment I am in town for some meetings at the Department of Justice,” Legere said. “And it’s very convenient for that."

Legere has historically built his brand on the idea that he's part of a straight shooting, no bullshit alternative to traditionally sketchy telecom operators. Yet here he is pretty clearly assuming a major media outlet and his Twitter followers are stupid. Legere took to Twitter to similarly proclaim there's just no way that his heavy sudden patronage of a Trump business could possibly influence the Trump administration's policy making decisions:

Right. There's just no way that giving additional money and attention to a raging narcissist's brand could possibly shape the thinking of such an influence-immune administration, right? Again, the assumption here appears to be that we're collectively fairly dim, especially given the ample coverage of the emoluments battle currently being waged. T-Mobile went from insisting it didn't engage in the same "bullshit" as AT&T and T-Mobile, to quickly becoming arguably indistinguishable when it comes to pandering for governmental favors.

To be fair, this was a situation Legere was likely forced into. T-Mobile's owner Deutsche Telekom has been eager to exit the U.S. wireless market for years, putting Legere in the unenviable position of having to shift from playing an edgy Millennial caricature to selling a mammoth turd. Still, the amount of bullshit Legere's been pushing to sell the merger is pretty comical, ranging from claims that eliminating one of just four major competitors will magically increase competition, to claims the deal will create thousands of jobs (despite the fact that Wall Street, and history, predict the exact opposite).

There are, of course, fifty years of history documenting how these kinds of mergers generally raise rates, erode jobs, and reduce service quality as consolidation reduces the incentive to compete. It's the exact cause of the problem Legere has spent the last ten years ranting about. Despite this, opposition to this deal has been slow to materialize, though New York and California regulators are just starting to have some doubts as to whether this deal will even remotely deliver a fraction of its promised "synergies."

All told, T-Mobile in its earlier incarnations applied some very useful pressure on a stale, historically anti-consumer wireless sector, even if its impact on price competition has probably been overstated by the press. But as T-Mobile stumbles further and further down the rabbit hole in its bid to kiss Trump's ass and get its merger approved, it's starting to look more and more like the companies' T-Mobile has spent years making fun of. Should the deal be approved and competitive pressure proportionally reduced, you can expect this metamorphosis away from T-Mobile's consumer-friendly roots to rapidly accelerate.

Filed Under: corruption, donald trump, emoluments, john legere, lobbying, merger, trump hotel, uncarrier
Companies: t-mobile