Without the FCC, This Man Wouldn’t Be at the Telecom Party

Photograph by David Becker/Getty Images

T-Mobile President and CEO John Legere in Las Vegas.

Is there any big-company executive in the U.S. right now as compelling as T-Mobile’s John Legere? Having taken every possible opportunity to tweak Brand X (Verizon Wireless) and Brand Y (AT&T) in public, Legere outdid himself by showing up at AT&T’s Consumer Electronics Show party. That gave AT&T a lovely chance to publicly demonstrate a petty insecurity by ejecting him. Legere has portrayed the telecom wars as nimble David versus ugly Goliath. AT&T (whose spokesman didn’t respond to an email last night asking for comment) seems to be doing its best to oblige.

In his glee at tweaking his bigger competitors, Legere resembles Herb Kelleher of Southwest Airlines. And, as with Kelleher, what he’s doing is more than a sideshow because he’s delivering real competitive results. A couple of years ago, T-Mobile, the U.S. wireless carrier majority owned by Deutsche Telekom, was moribund. Now Legere has reversed its slide with subscriber increases it expects will reach 1.6 million to 1.8 million in 2013.

Legere would never have had the chance to revive T-Mobile if it hadn’t been for the intervention of another actor: the good old Federal Communications Commission. Because, to put it simply, without the Federal Communications Commission there would no longer have been a T-Mobile to revive.  In March, 2011, AT&T announced a planned deal to buy T-Mobile (a friendlier approach than Kelleher faced from his competitors, which tried to litigate the nascent Southwest out of existence). AT&T’s argued at the time was that it should be allowed T-Mobile’s spectrum to shore up its own network because T-Mobile was not a viable wireless competitor.

AT&T said that T-Mobile had no product differentiation and an offering so lacking that it was doomed to continue losing market share — a case that Ars Technica neatly summarized as “T-mobile sucks and we’d like to buy it for $39 billion.” T-Mobile then was “not an important factor in AT&T’s competitive decision making.” The FCC found AT&T’s argument unconvincing, and blocked the merger. So you can thank the bureaucrats in Washington for getting Legere a ticket to the party that really matters.


An earlier version of this post appeared in the Market Now daily email. Click here to register and subscribe. Or here to follow @markgimein on Twitter.

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