New York Attorney General Letitia James and nine other state AGs filed a lawsuit to stop the proposed T-Mobile acquisition of Sprint. The complaint was filed Tuesday in New York federal court in coordination with California, Colorado, the District of Columbia, Maryland, Michigan, Mississippi, Nevada, Virginia, and Wisconsin. In the 45-page document, the AGs allege the combination of two out of four of the largest wireless carriers is anti-competitive.
“When it comes to corporate power, bigger isn’t always better,” James said. She called the deal, “the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”
The deal has won FCC approval. But the Department of Justice staff is said to be against it. Officially, the DOJ has not made a decision, according to Reuters, which noted Sprint Chief Executive Marcelo Claure and his counterpart at T-Mobile, John Legere, met with the DOJ on Monday. The companies have offered to sell prepaid brand Boost Mobile, to reduce the combined company’s market share in the prepaid wireless business, Inside Towers reported.
If approved, “the combined ‘New T-Mobile’ would have a retail market share larger than the two largest Mobile Network operators today, Verizon and AT&T. In some areas, including in the New York City metropolitan area, the combined company’s share of subscribers would exceed 50 percent,” allege the AGs in the court document.
That combined market share would result in an increase in market concentration that, “significantly exceeds the thresholds at which mergers are presumed to violate the antitrust laws. This increased market concentration will result in diminished competition, higher prices, and reduced quality and innovation,” state the AGs.
They also note the potential loss of thousands of jobs if the deal is approved. The Communications Workers of America has said the merger would create a job loss for retail wireless workers, and downward pressure on all wireless workers’ wages. CWA President Chris Shelton called the lawsuit, “a welcome development for American workers and consumers.”
The Rural Wireless Association has opposed the deal, saying nothing in the transaction forces T-Mobile and Sprint to back up their claims to deploy broadband in rural America, Inside Towers reported. Before filing suit, the states gave what they call “significant consideration” to T-Mobile and Sprint’s claims of increased coverage in rural areas. However, they said, T-Mobile has yet to provide plans to build any new cell sites in areas that would not otherwise be served by either T-Mobile or Sprint.
In reaction to the lawsuit filing, RWA General Counsel Carri Bennet praised the move, noting: “The process at the FCC has not been transparent and the FCC appears to be blindly accepting new T-Mobile’s words as truth.”
NTCA–The Rural Broadband Association opposes the deal too, calling out what NTCA CEO Shirley Bloomfield characterizes as “the companies’ speculative and unenforceable promises.” The higher prices would hit rural Americans hard, she notes, adding: “Approval of the merger is antithetical to our country’s focus on 5G deployment and closing the digital divide.”
June 12, 2019