SoftBank, the owner of Sprint, is dedicating substantial resources to convince the US business community that greater competition for broadband service will develop in the US if Sprint is allowed to merge with T-Mobile. According to SoftBank’s chairman, Masayoshi Son, this merger would enable the combined company to obtain scope sufficient to compete with AT&T Wireless and Verizon Wireless. This additional competition, SoftBank argues, will cause the development of greater wireless broadband capacity and faster wireless speeds. In turn, this will spur greater demand for wireless services. It will also spur an arms race that will result in greater wirelinebroadband capacity.

Son has taken the unusual step of making this pitch directly to the business community for the purpose of putting pressure on FCC regulators and DOJ antitrust lawyers who are doubtful that a merger between Sprint and T-Mobile will spur such competition. Son’s presentation is simple and infectious. He states how far behind the US is in broadband penetration and speed compared to the rest of the world and says it isn’t good and we can do better. It’s been a long time since we have heard anyone say that the status quo is not good enough. For example, see Reuters‘ Alina Selylukh’s article on Son’s presentation here.

So, what is holding back the regulators from agreeing with Son? One stumbling block is that four carriers sounds more competitive than three. Another problem is that Son already promised vigorous competition when he won approval to buy Sprint. By appearances, T-Mobile has begun to vigorously compete with innovative service plans. That has given opponents a chance to argue that Sprint wants to buy T-Mobile to put an end to an upstart competitor and settle into a comfortable three-way oligopoly with AT&T and Verizon.

What intrigues us is the question of whether Son will get support from the big technology companies in Silicon Valley. It’s clear that Son is very focused on Silicon Valley. Son’s plan to relocate Sprint is already causing concern in Kansas City. Son’s business strategy has always been about more than just connectivity. According to the Wall Street Journal, SoftBank holds a 37% stake in Alibaba which the Journal estimates could be worth US$50 billion assuming that Alibaba will IPO at a valuation around US$150 billion. With this war chest and control over a big part of US wireless connectivity, SoftBank will be a powerful force in Silicon Valley.

It’s now accepted that the US wireless communications industry is essential for Silicon Valley innovators to succeed, as companies like Google, Facebook and Yahoo retool their offerings for mobile. Silicon Valley innovators may view as a plus Son’s moves to deliver more and better wireless broadband. On the other hand, they may view SoftBank’s plan to fold T-Mobile into Sprint as a path to more leverage for SoftBank over innovators in Silicon Valley that depend on the spectrum that SoftBank will control. What’s clear, so far, is that both Washington, D.C. and Silicon Valley will continue to listen carefully to SoftBank and Sprint. It will be interesting to watch SoftBank’s next move.