Looks like MetroPCS and T-Mobile USA are thinking of hooking up. T-Mobile and MetroPCS are allegedly in merger talks, according to Investor’s Business Daily. The transaction would see the combined company come under control of T-Mobile’s parent, Deutsche Telekom. AT&T was unsuccessful in its bid for T-Mobile, and Sprint had its eyes on MetroPCS but I guess couldn’t close the deal.

If the deal is approved, the two companies would be able to acquire spectrum from each other and have at least 42.8 million customers.

Will the Federal Communications Commission play spoiler? I don’t think so. This transaction gives the FCC an out for two reasons. First, approving the transaction will show that the FCC is willing to allow the market and not Don Quixote politics to allocate spectrum. Second, it takes the FCC off the hook for putting the number four wireless carrier in a position where it was considering saying auf wiedersehen to the American market.

Again, Sprint may be left without a date to the dance.

The Wall Street Journal reported back on 27 March 2012 that Sprint has plans to offer 4G phones on an LTE network. Given the time and energy the company wasted trying to block the AT&T/T-Mobile merger, it’s about time.

It’s good to see from a broadband adoption standpoint that Sprint is deploying a network that can help the company deploy these advanced mobile devices. If it can leverage a price strategy that gets the company more customers at a lower price to consumers, all the better. Lower prices charged to consumers keeps them connected.

Does the word “communications” or “telecommunications” mean anything anymore? Communications refers to the act of imparting or interchanging thoughts, opinions, or information by signs, writing, or speech. A communication may be a document or message imparting news, views, or information.

If I talk to my son, I’m communicating (or trying to. Kids are hard headed.). If I call him on his cell phone, we are still communicating since the only thing happening is that electrons are moving up and down a wire and the message isn’t being changed by the phone company (But as parents we know the message is being changed in our kids’ heads…).

The reason I’m pondering the definition is because I’d love to see Apple, Google, or Facebook make a play for a wireless or even a wireline company. I don’t want to see them get bogged down by 20th century notions of what communications is, however. The FCC and a bunch of state regulatory commissions would love to get their hands on a piece of Apple’s, Google’s or Facebook’s cash flow.

With people using their smart phones as miniature and mobile information access terminals (I avoid using the term computer or phone when I can), maybe some type of separations cost scheme is needed, much like the separations mechanism used by the FCC and the states to share access revenues. That would really give Apple, Google, or Facebook an advantage by reducing their cost of entry into the wireless market while giving AT&T, Verizon, Sprint, and T-Mobile a run for their money.

I expect, given their truly nationwide network that AT&T and Verizon would do well. Deadweight companies like Sprint and T-Mobile would probably go the away like the wind, given their networks are not as large or as fast.

Let’s face it. Apple, Google, and Facebook are media companies. It’s only logical that they would want to secure the distributional channels for the information that they want to share, namely our information. It would be like AMC Studios owning movie theatres. They produce the flick, they sell the flick.

Can FCC follow policy that would keep them out of the way of a potential mega deal?

A couple posts ago I shared the idea of Apple buying T-Mobile. What would really be an act of charity would be Google buying Sprint. Talk about putting a company out of its misery. Shares of Sprint have been falling for six months and this company needs a parachute. It waged a successful legal/regulatory campaign against the AT&T,T-Mobile merger, but looks like it may be in need of some help itself.

Here is a quote from an analysis by Morningstar:

“We believe this strategy is correct, but execution has failed thus far in one critical area: financing. That Sprint needs to raise capital isn’t a surprise, given the steady debt maturities it faces during the next few years. Sprint’s initial reluctance to clearly lay out its funding needs and continued uncertainty around Clearwire CLWR have caused the market to lose faith in management. Backed into a corner, the firm was forced to accept costly terms on its recent $4 billion debt offering. Sprint should now have the financial resources to work through Network Vision, but the firm still has little room for error.”

Google definitely has resources and could be Sprint’s white knight. In addition, keeping Sprint viable is good for public policy reasons because it keeps another choice for mobile broadband access in the game.

Spectrum is a nonrivalrous, excludable good. Like any other wireless carrier, Sprint’s cell towers, cell phones, heck even their customers generate that electromagnetic field we call spectrum. Just like Sprint bids for access to spectrum from the Federal Communications Commission, we “bid”, usually on a monthly basis, for access to Sprint’s cell towers.

Our little hand held radios that we call cell phones and smart phones emit signals that eventually clog the highways and channels we refer to as frequencies. The greater the demand to access spectrum, the greater the cost to use it.

Sprint, like every other carrier, faces not just a spectrum crunch, but a cash crunch. Telling investors that roaming agreements are its best bet to conserving cash should put investors on edge. Also buying 30 million smart phones when your network isn’t ready for all that capacity doesn’t set well with me either.

I also have to wonder how Clearwire’s spectrum squatting is impacting Sprint’s decision to rely more on roaming agreements to service its customers versus building out its network? According to Sprint’s 10-K, Sprint has a wholesale agreement with Clearwire where Sprint resells Clearwire’s 4G service. Maybe Clearwire hasn’t built out to the areas where Sprint is relying on roaming agreements or Clearwire wants more money. I don’t know.

I do know that investing in your network and building it out puts your subscribers at ease. They do care that the carrier who says they are providing national service is the carrier that is actually carrying their national service.