New competition in home broadband is TMO’s latest carrot to the FCC

As T-Mobile USA finds itself in a familiarly sticky situation in sliding the Sprint merger past regulators, the Uncarrier’s latest attempt to sweet-talk the FCC surprisingly took a break from 5G; well, sort of. T-Mobile is proposing a new in-home broadband service priced aggressively enough to disrupt the broadband market as it has already done so successfully in mobile.

In an FCC filing, T-Mobile has outlined plans for a “broad and deep network with fiber-like speeds and massive capacity” to be deployed by the merged ‘New T-Mobile’. This would add new options for both mobile and fixed broadband services, primarily in rural areas of the US.

The main pitch to the FCC, though, is that with New T-Mobile making in-home broadband an important part of the merged entity’s business plan, it will force incumbent broadband providers to lower prices and improve services.

And the operator notes how an in-home broadband service would complement and create increased revenue opportunities for its video distribution service.

There was a distinct sense of disappointment when T-Mobile revealed its reformed TV plans just last month, turning its potential for TV disruption down a notch by choosing content aggregator over offering its own undifferentiated skinny bundle. However, the analysts at Wireless Watch’s sister service, Faultline Online Reporter, judged that becoming an aggregator of the TV ecosystem is a role well-suited to TMO, given its major mobile reach and ‘hip’ reputation. Offering an aggressively priced in-home broadband service to which it can throw in a TV bundle as an added extra should be a major disruptor of the “cableopoly”, as CEO John Legere describes it.

Unfortunately, the exact price of the in-home broadband service has been redacted from T-Mobile’s filing, although it does say the low price will bring average speeds in excess of 100Mbps to 90% of the country by 2024 – by which time it aims to obtain 9.5m subscribers. In addition, New T-Mobile promises no contract, no equipment charge, no installation charges and no nasty surprises.

Further redacted facts and figures relate to the number of rural households today without an in-home broadband service or choice today, as well as the percentage of rural houses which could be supported by the New T-Mobile Home Internet service by 2024, should the merger get the green light.

Let’s say for argument’s sake the merger is approved and New T-Mobile Home Internet launches officially at the start of next year. That would give it a run rate of about 2.4m broadband subscribers a year in reaching its 9.5m 2024 target. Remember that’s 2.4m homes a year which will most likely have a satellite TV subscription too – so an aggressively priced in-home broadband service all of a sudden becomes a triple pay package capable of disrupting several industries in multiple markets.

So, how will it work? TMO plans to send subscribers a router hooked up to its LTE network, which can be easily installed through an in-app guide through installation. Crucially for routers operating on mobile networks, users must find the prime location for connectivity within a home, something which is usually carried out by a field engineer, so this self-install method will be put to the test.

The New T-Mobile router will eventually be upgraded to the operator’s 5G capabilities after the first 4G LTE pilot, using 2.5 GHz spectrum and 5G compatible hardware, and both the 4G and 5G versions could feature mesh WiFi capabilities. Hardware will be made available to customers of the Home Internet service at no extra charge.

Home Internet is the latest flag being waved by T-Mobile in a series of attempts to butter up the FCC. Back in September, the onus was on 4K resolution, specifically relating to how T-Mobile’s Layer3 TV technology would be capable of delivering 4K content wirelessly nationwide through the combined capacity of New T-Mobile. It promises to use “immense capacity and coverage of New T-Mobile’s 5G network”. T-Mobile may have modern network infrastructure, but both Sprint and T-Mobile have hapless video offerings, which is why the purchase of Layer3 was so important – and is another reason why we believe T-Mobile’s content aggregator strategy could pay off.

It comes as the FCC paused the merger for a third time late last week, citing some as-yet unspecified new information of high significance – and marking the start of a three week investigation. According to Seeking Alpha, FCC Chairman Ajit Pai has met with legal representatives from both T-Mobile and Sprint – halting the countdown on day 122 of 180.