UScellular executives have said that their future could be doomed if the T-Mobile acquisition isn’t completed and are praying that the FCC provides its approval. However, the DOJ has asked the agency to pause on deciding until they have had an opportunity to see if the deal could pose risks to U.S. national security.
The U.S. Department of Justice (DOJ) has requested a pause on the proposed acquisition of UScellular by T-Mobile, pending a national security review. In a filing to the Federal Communications Commission (FCC) dated November 19, 2024, the DOJ expressed concerns over potential foreign participation risks associated with the transaction.
T-Mobile, led by CEO Mike Sievert, announced its intention to acquire UScellular on September 13, 2024. The DOJ’s request emphasizes the need to assess any foreign relationships and ownership structures that could pose risks to U.S. national security or law enforcement interests.
The DOJ has referred the matter to the Committee for the Assessment of Foreign Participation in the United States Telecommunications Service Sector, commonly known as “Team Telecom.”
This interagency committee advises the FCC on national security and law enforcement concerns related to telecommunications licenses involving significant foreign ownership or control.
T-Mobile is majority-owned by Germany’s Deutsche Telekom, which holds a 50.42% stake and possesses voting rights for additional shares. The proposed $4.4 billion deal includes acquiring approximately 30% of UScellular’s spectrum holdings, its 4.5 million customers, and retail stores. T-Mobile has also indicated plans to offer employment to a significant number of UScellular’s workforce.
The FCC heeds Team Telecom’s recommendations
This is not the first instance where Team Telecom has intervened in telecommunications transactions involving foreign ownership. For example, in 2020, the committee recommended that the FCC deny the Pacific Light Cable Network’s (PLCN) application to connect the U.S. to Hong Kong via an undersea cable, citing national security concerns.
The FCC denied the application in 2021. Subsequently, the PLCN project was restructured to exclude the Hong Kong connection.