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TechT-Mobile

How T-Mobile CEO John Legere Outfoxed Capitol Hill Challengers

By
Aaron Pressman
Aaron Pressman
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By
Aaron Pressman
Aaron Pressman
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June 29, 2018, 11:06 AM ET

This article first appeared in Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.

Maybe you weren’t impressed with the dozens of members of Congress who tried to pin down Facebook CEO Mark Zuckerberg back in April. Lawmakers each had only a few minutes to ask questions and some seemed wildly ill-informed, at best, about how Facebook operated.

Many fewer viewers, no doubt, tuned in to C-Span on Thursday to watch the Senate Judiciary Committee’s subcommittee on antitrust grill T-Mobile CEO John Legere about his proposed merger with rival Sprint (you can catch the replay here). They would have been considerably more impressed. Just three lawmakers—Sen. Mike Lee, Sen. Amy Klobuchar, and Sen. Richard Blumenthal—spent more than two hours quizzing Legere and other witnesses and going through the deal’s promised benefits with a fine tooth comb.

Legere, appearing in a black T-Mobile-logoed sports coat and a magenta T-Mobile tee shirt, was unflappable. “T-Mobile is a proud disruptor,” he declared at the outset, setting a tone that would continue for the entire session. “It is in our DNA. It is what drives my magenta-wearing employees. It is our brand.”

And if a boxing referee adjudicated the hearing, they might say no one laid a glove on Legere. But the senators certainly tried. All three lawmakers brought up apt historical comparisons and asked Legere and his partner in the deal, Sprint executive chairman Marcelo Claure, to account for past contradictory statements. Noting that Legere was now counting cable companies like Comcast as key competitors in the market, Sen. Lee noted “you appear to have walked back some statements you made as recently as February.” Legere, who back then said the cable companies would “fail horribly, miserably, so bad,” danced around the issue. “I’m glad you brought this up,” he began, going on to explain that he meant the cable companies hadn’t been competing up to their potential, but now had over half a million customers and “analysts” said they’d grab 5 million within two years. “They’re becoming a viable player.”

Finding the weakest part of T-Mobile (TMUS) and Sprint’s (S) case was left to witness and longtime antitrust veteran Gene Kimmelman (whose impressive list of former jobs includes chief counsel to the very subcommittee where he was testifying and chief counsel at the Justice Department’s antitrust division). In short, the carriers claimed they had to merge because competition was failing in the wireless market, with T-Mobile and Sprint unable to do much damage to market titans AT&T (T) and Verizon (VZ). But at the same time, Kimmelman said, the carriers also argued that if they merged there would be robust competition from many new entrants like Comcast (CMCSA) and Google (GOOGL). “I kind of don’t think you can have it both ways,” he observed deep into the hearing. “There’s a problem here in the whole presentation of what’s going on.”

A few other economic experts testified, too, but didn’t add much. As a side note, I still don’t understand how American Enterprise Institute visiting scholar Roslyn Layton, while under oath, offered this whopper: “T-Mobile’s Binge On was wildly popular earning it million of customers. What was the response of the prior FCC and now the California legislature? Shut down the program consumers love.” The prior FCC under Obama-appointed chair Tom Wheeler reviewed and approved of Binge On. And the California legislature added an exception for such programs last week to a bill it is still considering.

At the end of the day, marathon racer Legere successfully ran through the gauntlet of objections and emerged unscathed. The question now is whether regulators at the Justice Department will agree.

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