Today, 10 state attorneys general, led by New York Attorney General Letitia James and California Attorney General Xavier Becerra, announced that they have filed a multi-state lawsuit to stop the proposed T-Mobile/Sprint merger. Plaintiffs include New York, California, Colorado, the District of Columbia, Maryland, Michigan, Mississippi, Nevada, Virginia, and Wisconsin.
Public Knowledge opposes the transaction as a member of the 4Competition Coalition, filed a Petition to Deny with the Federal Communications Commission, and testified against the deal on Capitol Hill. The $26 billion merger would reduce the number of wireless carriers from four to three, which would likely reduce competition and increase costs for consumers.
The following can be attributed to Phillip Berenbroick, Senior Policy Counsel at Public Knowledge:
“Earlier today, 10 state attorneys general filed suit in the U.S. District Court for the Southern District of New York to block the anti-competitive and illegal merger between T-Mobile and Sprint. Today’s legal action is the right decision and will protect consumers across the U.S. and promote competition in the wireless market, as well as the proliferation of competitive next-generation wireless networks.
“After more than a year of review, the unsupported claims T-Mobile and Sprint have made regarding the benefits of their merger have collapsed under close scrutiny from antitrust enforcement officials and the public. The wireless market is already highly concentrated. Permitting T-Mobile and Sprint to merge — reducing the national wireless market to only three competitors — will give the combined firm the market power and incentives to raise prices and coordinate, rather than compete, with AT&T and Verizon.
“Evidence in the public record clearly demonstrates that permitting T-Mobile and Sprint to merge would significantly reduce competition in the wireless market, likely leaving consumers to pay higher prices for lower quality service, less innovation, and less aggressive network deployment. As the complaint emphasizes, the merger will harm all retail wireless subscribers, and these injuries will disproportionately harm pre-paid and low income wireless subscribers. These subscribers are the least likely to be able to bear higher prices and most likely to rely entirely on mobile broadband service for basic connectivity.
“In addition to higher prices, permitting T-Mobile and Sprint to merge would lead to tens of thousands of lost jobs; harm small and rural wireless providers; and eliminate avenues for potential new competitors to enter the wireless market. And, contrary to the claims by the parties, these harms are not offset by any verifiable merger-specific benefits, nor are they addressed by the flimsy and unenforceable conditions proposed by FCC Chairman Ajit Pai. Ironically, today’s action by the state attorneys general is likely to be more effective at promoting wireless competition and affordable service, facilitating deployment of next-generation 5G wireless networks, and closing the digital divide than any FCC action under Chairman Pai.
“This merger is illegal under the antitrust laws and will not serve the public interest. Anyone who relies on their cell phone to communicate with loved ones and participate in our increasingly global, digital, and mobile economy will likely pay more if T-Mobile and Sprint are permitted to merge. The Department of Justice should move quickly, consistent with the recommendation of the Antitrust Division staff, to join these states to block the T-Mobile/Sprint transaction.”
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