Media Moves

Coverage: Ten states sue T-Mobile-Sprint merger

June 12, 2019

Posted by Irina Slav

New York, California, and another eight states have launched a lawsuit aimed at stopping the planned merger between T-Mobile and Sprint citing competition concerns.

Reuters’ Diane Bartz and David Shepardson had the news:

Ten states led by New York and California filed a lawsuit on Tuesday to stop T-Mobile US Inc’s $26 billion purchase of Sprint Corp, warning that consumer prices will jump due to reduced competition.

The complaint comes as the U.S. Justice Department is close to making a final decision on the merger, which would reduce the number of nationwide wireless carriers to three from four.

The all-Democratic attorneys general from the 10 states, including Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin, say the reduced competition would cost Sprint and T-Mobile subscribers more than $4.5 billion annually, according to the complaint.

Klint Finley from Wired quoted some of the plaintiffs on the motives behind the suit:

“The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country,” New York Attorney General Letitia James said in a statement. “This is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”

According to the suit, T-Mobile plans to decommission a number of Sprint cell sites and hasn’t provided information on plans to expand coverage in areas that are not already covered by T-Mobile and Sprint. A statement from the New York attorney general’s office argues that carriers built 4G networks in a highly competitive market and “continued competition, not concentration, is most likely to spur rapid development of a nationwide 5G network and other innovations.”

In a statement, Carri Bennet, general counsel for the Rural Wireless Association, called the merger “bad for competition, and it is bad for consumers, especially those living in or traveling through rural areas.” She said the FCC’s review of the deal “has not been transparent, and the FCC appears to be blindly accepting New T-Mobile’s words as truth.”

Martin Baccardax from TheStreet.com gave some background and reported the effects of the news on the share price of the two companies:

Sprint shares fell 5.24% by mid-afternoon trading to change hands at $6.69 each, while T-Mobile traded 1.6% lower on the session at $75.44.

Last week a group of U.S. Senators led by Presidential candidate Elizabeth Warren asked the DoJ to disclose whether President Donald Trump, or any of his White House staff, had tried to intervene the Department’s investigation.

“In light of the potential implications of this transaction for American consumers, we write to reiterate that the department’s decisions should be based on an impartial analysis of the facts and the law, and must be entirely free of improper political influence,” the Senators, including Warren, Amy Klobuchar and Cory Booker, wrote in a letter to the DoJ.

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